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Diploma in Business
Unit Number and Title
Unit 32 Business Strategy
To attain organizational goals and objectives business strategy is very important. To increase performance and efficiency of organization a clear understanding of strategic planning is crucial. Before starting any business vision, mission, objectives and core competence are necessary factors which should be analysed. To develop business strategy SWOT and PESTEL analysis should be done. This assessment is based on developing business strategy for business consulting firm; the organization chosen for this assessment is ABC Consultancy.Business consultant organizations provide professional or expert advice in areas such as marketing, finance, engineering, etc. This assessment comprised of major tasks such as mission, vision of chosen organization, formulating of strategic plans, SWOT and PESTEL analysis, significance of stakeholders and implantation of strategy in organization (Steiner. 2010).
Mission – Before building any organization mission statement is very important. To meet expectations of stakeholders and describing how organizations run their business mission statement is crucial. For example, a business consulting firm’s mission statement include:
Vision–The vision statement outlines organizational future planning or areas where it wants to operate or what targets it wants to achieve within specific period. Primary purpose of business consulting firm is to deliver exceptional financial, tax and consulting services to clients. Organization’s primary purpose is to provide high quality financial products.
Objectives–The main objectives would include:
Goals–It can be described as target to achieve within specific time. Goals are conceptual planning to achieve targets. For development and growth of organization effective goals planning is necessary. For business consulting main goals involve:
Core competence – To compete in market with their competitors organizations require unique skills, resources and activities that cannot be copied by their competitors. In attaining competitive advantage core competencies are very effective. To attain organizational goals and objectives encouraging staff members and motivating them for effective and quality services to clients. Therefore a being a business consulting firm our organization needs to develop unique skills and activities to gain confidence of client (Campbell, et. al., 2011).
There are various factors and issues need to be considered during the process of develop a suitable strategy for a business. There are following factors should be taken into consideration with the formulation to ensure successful implementation of strategic plans:
There various techniques or methods used for strategic planning of an organization. Each and every technique has some advantages and disadvantages also. These techniques can be described as:
Space analysis - It is an analytical technique used in strategic planning and management. SPACE stands for Strategic Position and Action Evaluation. This technique analyses industry strength, financial strength, competitive advantage and environmental stability of the company. Factors that determine industry strength include: ability to make profit, develop new products and further development. Financial strength include: inventory turnover, capital requirement, etc. Market share, customer loyalty, etc. involve competitive advantage. Environmental stability include: inflation rate, price range of competitive products, etc. (Helms, et al. 2010).
Directional Policy matrices: It is framework used by organizations to determine the preferred segments for their products and services. By analysing directional policy matrices organizations can easily understand the direction for future investment. It is basically variation of Boston Matrix but it provides more details and clearer generic strategies for SBUs (Strategic business units).
PIMs (Profit Impact of Market Share)
It is a long-term and complete study of performance of strategic business units. PIM database is basically a collection of statistically documented experiences derived from number of business, developed to understand what kind of strategies work best in what kinds of business environment . In order to highlight relationship between business key strategies and results PIM is very effective tool.
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It is an effective tool used by organizations in developing strategic plan for mission and goal achievement. SWOT analysis is done to examining particular organization’s strengths, weakness, opportunities and threats in business environment. ABC Consultancyfirm’s SWOT analysis can be explained as:
Strength – In order to achieve organizational goals and objectives it is important to evaluate the strengths for further development and growth. The ABC Consultancyfirm provides valuable services to its clients and used effective business model to achieve goals and objectives. Strengths of ABCConsultancyfirm involve:
Weakness – To improve performance and efficiency of organization, areas of weakness should be identified. In order to design and implement strategies and policies organizations need to evaluate both strength and weakness. ABC Consultancy firm weakness identified as:
Opportunities – For development and growth of organization it is important to capitalize on opportunities. ABC Consultancy firm has focused on opportunities to increase business and also used modern technology for developing effective business model.
Threats – organizations have to face competition from other market players and they are also concerned about customer satisfaction. Possible threats for ABC Consultancy firm involve:
To monitor and evaluating micro-environmental factors that influence progress and development, organizations have used PESTEL analysis tool. Political, economic, social, technological and environmental factors are measured through PESTEL analysis. It can be explained as:
Stakeholder analysis – For any organization stakeholders are crucial and basically there are two types of stakeholders: internal and external stakeholders. Internal stakeholders for ABC Consultancyfirm involve employees, shareholders and management team. Clients, government, society and financial institutions are the external stakeholders for ABC Consultancyfirm. Stakeholder holder analysis can also be done as:
Direct stakeholders – Customers, employees, shareholders, etc. are the direct stakeholders because they are involved in day-to-day activities of business.
Indirect stakeholders – Individuals or organizations that do not have role in daily activities of business are indirect stakeholders. Government, associated groups, etc. are indirect stakeholders (Kalyani, et al, 2011).
Stakeholders mapping – It is management tool utilized by companies to identify stakeholders’ interest, their involvement and categories in which they fall. For project analysis stakeholders maps are effective tools. Stakeholders mapping can be done in four phases:
The market entry strategy can be defined as the planned method of establishment and management of business in a new target market. These strategies can be strategic alliance, licensing, franchising, mergers, acquisitions and organic growth. The ABC Consultancy needs to expand its presence in global market and for that the market entry strategy of ABC Consultancy must be franchising and strategic alliance model. In this strategy, company can easily build an effective platform in order to get knowledge of foreign markets. The strategy chosen for the firm can also help in the substantive growth of the ABC Consultancy firm as there are many possible strategies are potentially present. These strategies include horizontal integration, vertical integration, related and unrelated diversification. ABC can choose for horizontal integration as it can integrate with local foreign market easily with its own services and brand name (Bhardwaj, et al, 2013).
In the case of limited growth, the four basic strategies of ABC Consultancy can be focused and chosen, which are market penetration, market development, product development and innovation. ABC Consultancy can look after the product development and innovation strategy for limited growth context. The company can work over new product or service which can be provided by the organization such as consultancy for recruitment of human resources, these kinds of services are always preferred by the consumers as they require guidance on these services on a regular basis. Also, ABC needs to focus on getting an innovative approach for their marketing strategies which can reduce their man power in marketing and use their employees in other useful tasks. ABC Consultancies can look for internet marketing tools as applying innovative approach in the organization. Further, ABC Consultancy needs to utilize disinvestment plan in order to include retrenchment. This will directly help the company in order to get financial steadiness in the business. The disinvestment strategy will improve liquidation for the firm (Verbeke, 2013).
The Future strategy for ABC Consultancy can be proposed as development of brand image and getting a strong market image in urban market. ABC Consultancy provides its services to other business organizations regarding financial, taxation and other economic consulting services. The target market of the company is in urban areas. Thus, company needs to focus into the urban market and penetrate into new urban areas with developing new service portfolio. The company can build innovative strategies such as supping with economic as well as recruitment services for their clients. This will directly help the firm in getting a strong market image and brand build up. Further ABC Consultancy can use other growth schemes for future market development such as strategic alliances with smaller local consultancies and recruitment firms. This will help company to grow in the market with a steady pace. ABC Consultancy needs to focus over the feedbacks of their clients and work in order to amend its services. The key to success in a service providing business is to satisfy the clients and customers completely with the service quality of the company (Reich, et al, 2013).
This report has successfully explored the business strategy of ABC Consultancy. The report depicts the understanding of process of strategic planning in the company. Secondly, the strategic positioning of the organization has been explained briefly in the market with environmental audit and stakeholder analysis of the company. The strategic evaluation of ABC Consultancy is demonstrated with alternative strategies of market entry, growth, limited growth and retrenchment for the company. And finally a future strategy has been explained with recommendations according to the consultancy firm (Oestreicher, and Zalmanson, 2012).
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