Business Strategy Assignment Help
Contents
Part 1- The Strategic Planning Process
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2
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1.1 Effect of mission statement, goals and objectives on strategic planning
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1.2 Key factors to be assessed for strategic planning
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1.3 Techniques used to develop strategic planning
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2.3 Importance of stakeholder analysis for new strategy formation
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4.1 Importance of personnel in strategy implementation
| 4 |
Part- 2 Report on strategic plan for Mark Lambert
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| 2.1 Organizational audit for Solitaire and Co | 10 |
2.2 Environmental audit for the company
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11
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3.1 Competitive marketing entry strategies
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| 2.4 & 3.2 new strategy for Solitaire and Co | 13 |
4.2 Estimated resource requirement for the proposed strategy
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4 .3 Evaluation of SMART targets for the achievement of the proposed strategy
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References
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Part 1- The Strategic Planning Process
1.1 Effect of mission statement, goals and objectives on strategic planning.
Strategy means firm's plan of action. Mission and vision statement work as foundation for laying down organizational objectives. Mission is the statement of purpose of an organization. Strategic planning is done to achieve the mission. Vision gives a direction to achieve the mission. Strategic planning is done so that in the longer term organization achieves its mission by fulfilling its vision. Goal is a specific short term target. Objective is a measure of change to achieve a goal. Increase mobile subscriber base by 5000 can be a goal of Vodafone. Increasing
1.1 Effect of mission statement, goals and objectives on strategic planning.
Strategy means firm's plan of action. Mission and vision statement work as foundation for laying down organizational objectives. Mission is the statement of purpose of an organization. Strategic planning is done to achieve the mission. Vision gives a direction to achieve the mission. Strategic planning is done so that in the longer term organization achieves its mission by fulfilling its vision. Goal is a specific short term target. Objective is a measure of change to achieve a goal. Increase mobile subscriber base by 5000 can be a goal of Vodafone. Increasing
25% of it by December 2014 can be an objective. (Hill & Jones, 2012). Hence vision and mission give the directional input to the firm while goals and objectives are ways to achieve the same
1.2 Key factors to be assessed for strategic planning
Factors which need to be assessed while making a strategic plan-
When to plan- company has to understand when planning is needed. Planning may be needed at new product development stage, new production facility procurement stage or at new market entry stage. For example Vodafone while launching there 4G technology data plans did lot of planning on the marketing strategy.
Who should be involved- The Company has to decide who all to involve in a particular plan that's how many managers, workers, stakeholders or directors to be involved in each plan.
Role of planning- The role of planning has to be clear. For example if planning aims at increasing sales it should be focused on marketing strategy.
Targets- targets are smaller aims which are to be fulfilled in the short run in order to achieve the bigger objectives. Targets have to be clear so that plan moves in proper direction (Bamford
When to plan- company has to understand when planning is needed. Planning may be needed at new product development stage, new production facility procurement stage or at new market entry stage. For example Vodafone while launching there 4G technology data plans did lot of planning on the marketing strategy.
Who should be involved- The Company has to decide who all to involve in a particular plan that's how many managers, workers, stakeholders or directors to be involved in each plan.
Role of planning- The role of planning has to be clear. For example if planning aims at increasing sales it should be focused on marketing strategy.
Targets- targets are smaller aims which are to be fulfilled in the short run in order to achieve the bigger objectives. Targets have to be clear so that plan moves in proper direction (Bamford
&West, 2012). Planning has to be done talent into consideration all the factors as all of them contribute in one way or another.
1.3 Techniques used to develop strategic planning.
BCG Growth-share Matrix- BCG matrix classifies a company's business units into four categories bases on its market growth and market share.
1.3 Techniques used to develop strategic planning.
BCG Growth-share Matrix- BCG matrix classifies a company's business units into four categories bases on its market growth and market share.
Dog- Low market share and low growth rate. A declining product can be termed as dog. E.g. Diet Coke
Question mark- Products having high growth rate, with high cash consumption but low market
share and less cash generation. E.g. Coca-Cola's Fanta brand
Stars- These products have high market share and high growth rate. Star has a potential of
Question mark- Products having high growth rate, with high cash consumption but low market
share and less cash generation. E.g. Coca-Cola's Fanta brand
Stars- These products have high market share and high growth rate. Star has a potential of
becoming a market leader. E.g. Samsung's galaxy smartphone
Cash cow- The market leader of a mature market, this product generates more cash than it
Cash cow- The market leader of a mature market, this product generates more cash than it
consumes. It has high market share and low growth. E.g. Coca-Cola's black cola
For example we can say the
Through this analysis company can foresee which of its question marks and stars have potential
of becoming a cash cow.
Directional Policy Matrix- Is a frame work which categorizes a firm's business activities on the basis of its market position and market attractiveness. The analysis is performed on the basis of ability of each product area to achieve the firm's objectives. Firm needs to identify factors which determine market attractiveness and business strength. Products lines, segments or business units are classified on basis of these factors as having high, low or medium market attractiveness and business strength. On this basis a firm decides whether to invest, divest, harvest or grow (Ansoff, 2007).
For example we can say the
Through this analysis company can foresee which of its question marks and stars have potential
of becoming a cash cow.
Directional Policy Matrix- Is a frame work which categorizes a firm's business activities on the basis of its market position and market attractiveness. The analysis is performed on the basis of ability of each product area to achieve the firm's objectives. Firm needs to identify factors which determine market attractiveness and business strength. Products lines, segments or business units are classified on basis of these factors as having high, low or medium market attractiveness and business strength. On this basis a firm decides whether to invest, divest, harvest or grow (Ansoff, 2007).
There are a few more techniques like strategic position and business evaluation matric (SPACE) and profit impact of marketing strategy (PIMS). BCG matrix is one of the best techniques as it gives a quick and simple analysis of the opportunity available.
2.3 Importance of stakeholder analysis for new strategy formation
Stakeholders' analysis is a review of impact of stakeholders like suppliers, customers, employee, shareholders and investors on business.
Stakeholders mapping is done in order to understand the orientation of different stakeholders and to develop better working relationship and trust with them. For Example doe a new product launch stakeholder's like customers and employees are very important.
Stakeholder's grid is a technique of mapping the impact of stakeholders on the firm.
Impact/influence grid- This grid helps understand which stakeholder has maximum impact or influence over a project.
High impact, high influence stakeholders- Such stakeholders should be given full attention. Low Influence, high impact stakeholders- These need to be kept informed.
High influence, low impact- These stakeholders need to be kept satisfied.
Low influence, low impact- These stakeholders need to be monitored closely.
The stakeholders in each category differ from project to project and are subject to change (Hill & Jones, 2012). Stakeholders are the key people who matter to a company hence knowing which stakeholders are more important is essential for smooth functioning.
4.1 Importance of personnel in strategy implementation.
Employees or personnel are crucial for successful implementation of any strategy. Sales targets are achieved by the workforce on the field. A committed sales force will be able to influence the customer to a great extent. For successful delegation of work the work is distributed into targets which each employee has to achieve within a stipulated time. Many companies like Vodafone distribute geographical area between their employees and assign area based targets. These targets help the employee keep his job in perspective. Also the entire project is divided in to reams and each team is given a target to achieve. The team leader then divides this target between members of the team. While dividing the target the leader should keep in mind role of individual as well as the team in order to achieve it. Every employee has different capability and capacity hence company cannot expect same amount of target achievement by all. Benchmark target is the
desired level of target which should be achieved by an employee. These targets may change at different levels in the organization (Hussey, 2007). At the end of the day it's the employee who produces and promotes the product for the company hence they are very important to company's growth.
Conclusion- A well-defined strategic planning process can help the organization in achieving its objectives in an effective and timely way.
Presentation
Srraregic
..Planning J>rocess
D Strategic planning is an organized process of defining goals, objectives, mission and vision of the firm.
D It also includes analyzing core competencies, formulating strategies and controlling and monitoring these strategies (Bamford &West,
2012).
Mission, Vision , Goals and Objectives
Mission, Vision , Goals and Objectives
D Mission statement is the statement of purpose of an organization.
D Vision gives a direction to achieve the mission
D Goal is a specific short term target serving a specified purpose for the bigger achievement of the mission. Objective is a measure of change to achieve a goal (Ansoff, 2007).
D When to plan- A company has to understand when in the production or sales process planning is needed.
D Who should be involved- The Company has to decide who all to involve in a particular plan
D Impact on managers- Company has to assess what impact a particular plan is having on managers. Is a particular
plan motivating managers or not (Bamford &West, 2012).
Techniques of Strategic Planning
Techniques of Strategic Planning
- BCG Growth-share Matrix (Ansoff, 2007).
The BCG Matrix
Relative Market Share Position in the Industry
Hi;;J.. +20
Industry Sales Growth Rate (Percent)
!l,lediU>n O
Hi;;ll
1.0
Me.cliUJft Low
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.50 0.0
Low -20
Techniques of Strategic Planning
- Directional Policy Matrix
Olt is a frame work which categorizes a firm's business activities on the basis of its market position and market attractiveness.
O On the basis of market attractiveness and strength the firm can decide if it should invest, divest, harvest or grove {Hill & Jones, 2012).
Importance of stakeholder analysis
O Stakeholders' analysis is a review of impact of stakeholders like suppliers, customers, employee, shareholders and investors on business.
O Stakeholders mapping is done in order to understand the importance of different stakeholders.
D Stakeholder's grid is a technique of mapping the impact of stakeholders on the firm (Hill & Jones, 2012).
Impact/influence grid-
DHigh impact, high influence stakeholders- Such stakeholders should be given full attention.
DLow Influence, high impact stakeholders- These need to be kept informed.
DHigh influence, low impact-These stakeholders need to be kept satisfied.
DLow influence, low impact- These stakeholders need to be monitored closely (Hill & Jones, 2012).
Importance of personnel in strategy implementation
O Employees or personnel are crucial for successful implementation of any strategy.
O Sales targets are achieved by the workforce on the field. Their role is of great importance.
O Work force is greatly needed at the stage of selling the concept and communicating it to the customer (Hussey, 2007).
References
- Ansoff, I., (2007) Strategic Management. New Jersy: Palgrave Macmillan.
- Bamford, C. E. & West, P. G., (2012) Strategic Management : value creation, sustainability, and performance. New York: Cengage Learning.
- Hill, C. & Jones, G., (2009) Strategic Management Theory: An Integrated Approach. New York: Cengage Learning.
- Hill, C. & Jones, G., (2012) Strategic Management: An lntegratedApproach. New York: Cengage Learning.
- Hussey, D. E., (2007) Strategic Management: From
Theory to Implementation. New Jersy : Taylor & Francis.
Part- 2 Report on strategic plan for Mark Lambert
To
Managing Director
Solitaire and Co
Dear Sir,
2.1 Organizational audit for Solitaire and Co
Organizational audit is a systematic, periodic and comprehensive evaluation of a company's environment, strategies, objectives and activities to find out areas of improvement. There are various ways to conduct it
Benchmarking- Benchmarking is comparing own performance with industry best practices.(Henry, 2011). Solitaire and Co is known for its quality chocolates but if the company wants to diversify into non organic confectionaries in Europe it needs to upgrade its machinery, distribution network and supply chain to match industry standards.
SWOT Analysis- SWOT is a method of analyzing the external and internal environment of the company. Strengths and weaknesses are internal while threats and opportunities come from outside environment
Strength- Quality organic range product is a major strength
Weakness- No experience of selling in Europe and outdated machinery which is 30 years old is weaknesses.
Opportunity- Huge market in Europe is a big opportunity. Single European market can give huge sales and profits to the country
Threats- UK membership of EU is in doubt which could land the company in trouble.
Value chain analysis- Value chain analysis is an analysis of how the company adds value to a raw material and converts it into something the customer is ready to pay for. It involves inbound logistics, operations and outbound logistics (Bamford & West, 2012). Solitaire and Co aims at diversifying its range of product into inorganic confectionaries for this it will have to change its inbound logistic facilities. It plans to build new premises for production and get new machinery
to replace the outdated one. It also plans to tie up with distributers and agents in various EU
countries.
2.2 Environmentalaudit for the company
PESTLE Analysis- This is an analysis of external factors affecting an organization
Political Factors- EU has massive food tax regime which needs evaluation if relocation is the aim
Economic Factors- If the company diversifies to Europe it will be impacted by industry growth rate, inflation rate and trends in business cycles affecting Europe
Social Factors-For its relocation to mainland Europe it has to understand the social-cultural dynamics.
Technological factors- The Company plans to shift to inorganic ingredients for which it plans to procure new machinery.
Environmental factors-Company will have to adhere to EU norms of waste disposal, recycling of waste and minimum C02 emission (European Union, 2014).
Legal Factors-the Company would have to abide by EU legal directives like the equity pay directive, workplace distribution directive and racial discrimination directives
Barriers to Entry
- "me and cost of en
- Knowledg,;
- Economies. cf scal
- Cost eovantaces
- echnology
- Barriers
Suppliers
- Numl:s-r of suppliers
- Size of suppliers
- Switching costs
- Unique service/product
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- Ability to substitute
Substitutes
Substitutes
- Substitute performance
- Cost of switching
- Buyer willingness
Buyers
- Number of customers
- Buying volumes
- Drffereniiation
- Price elasticity
- Incentives
- Brand identity
- Switching costs
Competitive Rivalry
- Number of ccrncettors
- Exit barriers
- Niche. quality
- Differentiation
- Switching costs
- Industry concentration
- Diversity of competitors
Figure 1: Source: Hill & Jones (2012)
Competition among existing firms- Competition in chocolate industry is intense. There are many established players like Nestle, Ferrero group and Lindt (CAOBISCO, 2014).
Bargaining Power of suppliers- As the company will need to tie up with new agents bargaining power will be high initially.
Bargaining power of the customer- Due to many choices their bargaining power will be initially high.
Threat of new entrains- As EU is one market there are low entry barriers but capital required for establishing the plant is high hence threat of new entrain is moderate
Threat of substitutes - Various cooking flavors like vanilla and lemon area substitute to chocolates but, most people love chocolates hence threat of substitute products is low.
3.1 Competitive markeitng entry strategies
Organic growth - Organic growth is a growth in company's business due to growth in its own business rather than by purchasing another business. Solitaire and Co wants to expand its existing business to mainland Europe by opening up a new plant there. Hence it is following organic growth strategy.
Growth by merger or acquisition- As there are many companies already in this industry in mainland Europe a strategy of purchasing or merging into an existing firm can also be adopted. Strategy of merger or acquisition of with another company can give advantage on technological and marketing grounds. Company will have to spend lesser on innovations and branding
Strategic Alliance- Strategic alliance is an entry strategy in which two firms agree upon certain pre decided objectives. Alliance can be for partnership of distribution channel, production facility or technology Solitaire and Co can go into a strategic alliance with existing firms in order to gain access to the European markets.
Franchising- Franchising is a strategy of leasing out for a specific period of time a company's business model and brand name. A firm goes into an agreement with a local agent and he can sell in the name of the company. There are certain clauses on maintenance of ambiance, employee standards etc. which the agent has to keep uniform .. As Solitaire and Co is a successful chocolate
brand in UK so it can use this method as an entry strategy.
2.4 & 3.2 new strategy for Solitaire and Co
A company can choose various strategies. Few of them are-
Horizontal and vertical integration- horizontal integration is partnership, merger, acquisition or alliance with a similar firm. Vertical integration is taking over suppliers'.
Related and unrelated diversification- going into new markets with similar business is related divarication while starting a new business is unrelated diversification
The An off matrix Market penetration- It is the strategy of increasing market share of a firm in its existing market.
Product development-It is the strategy of developing new product for existing market.
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Market development- It is the strategy of developing new market for existing product lines. The product may get minor modification.
Diversification- It is the strategy of setting up new business venture m new markets with diversifies product
Market development strategy is suggested for Solitaire and Co for venturing into Europe. Lambert finest is a good brand name in UK the company should use the same to launch the product in Europe. This wills help the company to use its goodwill in a positive manner. Goodwill will help it in positive positioning. It can also market itself in a way that customers perceive it as an old brand coming to Europe. Market development strategy entails expansion with new uses or new users. The company will have to find new users through new geographical segmentation in Europe. Market development strategy targets new customers hence company will be better able to position its new inorganic content chocolate. Company is planning to tie up with new agents, vendors and distributers in this case also market development strategy is more suitable
4.2 Estimated resource requirement for the proposed strategy.
Any new strategy requires resources to reach the implementation stage Major resources which are needed are-
Finance- financial strength is very important because any new venture costs a lot of money. The Company is planning to venture into Europe. It would require finance for setting up plant and machinery, vendor and supplier payments, employees' payment, marketing cost, payment of taxes and tariffs etc. For this purpose the company is planning to become a public limited company to raise funds,
Human Resources- It is the workforce who actually creates the product and sells it hence good human resource planning is essential for successful strategy implementation. The company plans to relocate and open a new factory in Europe. For this the company requires skilled workforce managers, supervisors, marketing and sales staff and other administrative staff. It can transfer its
existing employees to Europe and also recruit from local population.
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Material- Material requirement should be analyzed in detail while implementing the strategy The Company would need to procure the raw material required to produce the chocolates. It would also need to buy new machines as existing ones are 30 years old. For this company should forge partnerships with suppliers
Time- Plan should always be time bound otherwise it will never be achieved Company plans to achieve a sizable amount of marker share in terms of sales within the next five years.
4.3 Evaluation of SMART targets for the achievement of the proposed strategy
A strategy can be successful if its operational, corporate and individual targets are met in a specific, measureable, achievable, realistic and time bound (SMART) way Through the use of marker development strategy the objectives of the firm can be given a direction. SMART targets can help achieve the strategic objectives in a fruitful manner
Specific- market development strategy of developing new market for existing products through specific corporate targets like establishing a factory in Europe, arrangements and tie ups with vendors and specific operational targets like purchasing new machinery
Measurable- The targets should always be quantifiable so that they can be measures. For example in the current situation targets can be measures on number of machines purchased or
area of the factory premises or sales volumes.
Achievable- target should always be achievable. Under market development Strategy Company should be able to achieve its target of setting up new factory and buying new machines.
Realistic- target should be always realistic. The targets of Solitaire and Co of becoming a public limited company, new factory, new machines and distributer tie ups are very realistic
Time bound- timely target achievement is a key to success of strategic planning; Solitaire and Co has put a time limit of five years to achieve its targets.
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