Delivery in day(s): 5
Diploma in Business
Unit Number and Title
Unit 32 Business Strategy
Business strategy is must for every single organization to achieve its objectives. It is plan which is decided by the top management for the good perforce and more profit. Business strategy is the integral part of an organization to find its way to achieve thrives. Without the strategy it becomes impossible to fight in a tough market. Developing a business strategy is one of the ways to have good and successful business. The business strategy has been constructed over to develop the business strategy for the Samsung Company. It has also shown how objectives, aims, goals differ from each other and what are their roles. In the last, assessment has cleared how strategy accomplishes targets of a company by splitting into several strategies. Organizational activities and task work upon internal and external factors which is why organization develop the business strategy else it will be very difficult to control over the market. Business strategy helps the organization to gain the public advantage and intelligence which is needed to run a giant business like Samsung organization.
Strategic planning is a procedure which involves the strategies which are used by the organization to achieve the objectives decided by the company. In order to determine the usage of resources and direction to move are the main factors which are determined by the strategy planning. It incorporates some of the most important components which are must to develop the whole plan. (Montgomery, 2011)
Mission: The main aim of the mission statement is to meet the ends or goals set by the organization. The statement help in identifying the market size of the company and also helps the stakeholders by detailing the execution of the strategies followed by the organization. For example, in case of Samsung the mission statement is “Inspire the world, create the future”. From this mission statement it can be assessed that the organization Samsung wants to satisfy all the customers across the globe by creating superior value in the terms of advanced technology, availability and service quality. With this mission statement, the strategic plan of Samsung will get an aim or desired goal.
Vision: Vision shows the organization future and assists it to form a way for its missions. Generally, visions are long process of future goals of organization.All the steps necessary to achieve the mission statement is the vision. For example the vision statement of Samsung is focused for the period 2020 by integrating employees, industry and partners in a same channel for achieving the mission. Adopting innovation, identifying new territories, providing support to all the employees, assessing the industry requirements are mainly considered in the vision statement of Samsung(Teece, 2010). From this vision statement, strategic planning of Samsung will get the parameters or objectives to initiate the process for achieving the ultimate goal that is to reach at 400 billion dollars in the terms of revenue.
Goals:These are precise targets which an organization decides before implementing any strategy. Goals are the end part of any organization deal or desires. It also involves extensive planning to achieve targets. There are two forms of goals which are:
Short term goal: They help to achieve long term goals as they help the organisation in facing daily challenges, hence keeping the organisation intact. For Samsung the short term goal is to explore new markets to cater and to develop new series in order to attract more customers.
Long term goals-It includes achieving the objectives set by the organisation in order to attain the mission statement of the company. For example, the long term goal of Samsung is to become a leading consumer electronics organisation in the world by having a large customer base.
Objectives:Objectives are the roadmaps that are designed in order to achieve the goal successfully. The main objectives of Samsung are as follows-
Core competencies: Core competencies also help in strategic planning as they act as the real drivers of the competitive nature of the market and also enhances the skills of the employees which benefit the customers. For example, Samsung aims to reduce the operation cost and maximise the profit level in order to achieve the competitive advantage.The utilisation of the resources is given importance at Samsung in order to create a unique value proposition in the market. In this perspective, a strategic plan should be focus on the superior value of the organisation in order to achieve the competitive advantage and high level of brand equity. It has been observed that there lies an interrelation between the strategic planning with mission, vision, objectives, goals, core competencies of the organisation.
Strategic planning is highly crucial for the organization to achieve their desired targets. However, there are some important factors that are attached with the strategic planning which are needed to be checked properly.It is much difficult for the management to pick those factors against the priorities. In case the organization has some incongruities about the priorities and factors, perhaps it will divert the organizational from vision to targets. (Woodcock and Starkey, 2011)
The factors that are needed to be considered while formulating the strategic plans are follows:
As Wittmann and Reuter (2008) said that strategic planning depend on the business situations. With the help of these strategies the organisation maintains its position in the market.(Bharadwaj AND Venkatraman, 2013). Samsung follows the following strategies-
The effectiveness of the techniques used in the strategic planning can be done from the following way:
BCG matrix: it is the matrix which determines the level industry relative share of the industry and the business with the help of four dimensions. Strategic business plans are set by considering the growth rate of the industry and current situation of the business. BCG matrix determines the industry growth rate along with the concerned business share. The four dimensions are question mark, stars, cash cows and dog. The dimension question mark is the position where the business share is low than the industry growth rate. Stars determine the position where the industry growth rate and the business share is rising at an increasing rate. Third is the cash cow which highlights the stagnant growth of the industry but a favourable market share of the concerned business. Last is the dog where the business slows down as well as the industry.
The disadvantages of BCG matrix are:
Mc Kinsey Matrix:It is the matrix which consists of 9 dimensions based on the high, low and medium. Industry attractiveness and the strength of the business unit are considered to determine the position of the business. All the factors like market size, growth rate of the industry, competition level are being considered in this approach. The main strength of this technique is to determine all the possible level of the business while designing the strategic plan. But efficient team of analyst are required to determine the correct financial figures for this matrix.
The management of Samsung can undertake the strategic planning by the techniqueswhich will give more correct figures of the business and the industry. All the techniques have certain advantage and disadvantage which are being discussed. The application of the techniques is only depend on the level of competency of the team.
Internal factors are analysed in the Internal Factors Evaluation Matrix presented below:
Internal Factors Evaluation Matrix for Samsung
Innovative thinking to create high quality,digital products leading to strong loyalty of customers
High price to many products comparing with the competitors
High financial performance, over the last years due to cost reducing strategy
Late venture in operating system licensing
Trend setting design and integration of digital media
Restriction of software usage by hardware platform
Exceptional customer services and 24 hours online sales department
Over dependence for new ideas on top management
Offbeat marketing strategy focus more on smart phone users
Declining ratio of Rand D investments over revenue
Excellent track record in customer services
The competitive profile matrix indicates the company’s competitors and also the strengths, the opportunities and the weaknesses that the organization must consider when formulating its strategy in report with its competitors.
An environmental audit gives an idea and figure in which the company operates or work. PESTL
Stakeholders play an important role in an organization. This is an entity which can be impacted or can impact on the business strategy. These entities can be internal and external employees, government, unions, customers, etc. To assess the significance of the stakeholders towards the organisation Samsung, Stakeholder mapping is needed to be applied where the power and influence level can be determined (Wilson and Gilligan, 2005).
In this stakeholder mapping there are four dimensions which can be related with Samsung in the following way:
From the stakeholders analysis following assessment can be done (Verbeke, 2013):
Strategy is the roadmap that can enhance the organisation to reach the desired target level. The strategy should align the objectives of the business. The new strategy for Samsung will be the Market Penetration and Market Development. Market penetration is the strategy that can increase the market share of Samsung by undertaking certain modifications in the pricing and modification strategy. Market development will assist the organisation Samsung to cater the new target segment with the existing products. For example 30% of the people in UK do not use smart phones but majority of the people access the internet which is around 90%. In these circumstances, Samsung should changes the pricing and promotional strategy to create interest on the mind of the non buying customers of Samsung which can increase the scope of the market share of Samsung in UK. Market development is another growth strategy which can be relate with the non buying customers of smart phones in UK. The sales volume will be increase and there is chance to get high customer’s equity in the business of Samsung.
The appropriateness of alternative strategies are as follows-
Market Entry: Market entry determines a complete new market for the business. Market entry is based on the external factors like the level of competition exists, Government taxation, current taste and preference of the customers, localisation factor etc. Samsung is the global brand and catering to the completely new market will require extensive research in order to successfully operate the business. This strategy will not be appropriate for Samsung currently due to the increase in the investment and also risk is attached.
Substantive growth- the organisation increases or maintains its position in the competitive market with the help of substantive growth. It is divided into horizontal and vertical integration. Under horizontal integration two or more companies are merged together, if we take the example of Samsung C&T and Samsung Engineering merge to increase the construction business. Under vertical integration the company itself becomes its own supplier or distributor or the company moving in the similar type of market with similar technology for example Samsung used to manufacture smart TV later started to manufacture phones. Thus the added growth from the substantive growth strategy can be achieved for Samsung.
Limited Growth strategy- This is strategy which will restricts the growth of Samsung in some business units in order to give focus on other business areas. Sometimes the business organisation follows this strategy to give focus on the specific area for developing the business. This strategy will not be feasible for Samsung at this time due to the intense level of competition that is exist across the globe.
Retrenchment- this strategy comes in force during recession period. It may occur that the company faces from huge failures and losses which in turn the organisation would need to cut down their product prices in order the maintain their position in the market. The restriction in the output of the business for reducing the risk factors is associated with retrenchment. This strategy will also not be feasible and justified for Samsung in the growing market rather than they need to focus on the customers who are shifting to other brands or non-buying customers of Samsung by the techniques like pricing, promotion and product modification which will definitely increase the level of output.
The Samsung has the most critical human resources, which not dug the way to success for Samsung but also choose the best man for competitive world. Moreover, Samsung has analysed that there is very bad demand of employees training skills in order to compete in this ever growing market. The up-gradation of skills and knowledge will make delivery service smooth and will lead to great quality available at company which will help it to gain benefit from the market. The Samsung Company has only one aim to increase the profit of the company without compromising the quality which they offer. The objective of Samsung is to deliver enhanced value to the customers with the innovative products and quality service. Based on this objective, the substantive growth strategy can be useful in order to attract the customers and to increase the business turnover. Currently Samsung is lying behind the Apple in UK and for that reason substantive growth strategy can be useful which will enhancethe scope of utilising the resources in a better way by the added growth. The competition can be encountered along with the increase in the customer base. The justification behind the strategy of Samsung can be done in the following way:
A proper team of various individuals is required in every organisation to work together. The involvement includes planning staff, boards of directors and top management. Their talent and skills help the organisation in the strategic planning of the business. The assessment of the roles and responsibilities can be undertaken from the following way:
Resource allocation is taken care by the management to execute the planned strategy. Resources allocation is totally based upon the company product demand in the market and it only enables resources availability for the company annual objectives planned by the top management. To formulate implementation of the strategy, it is very important to allocate the resources. However, these resources can be different from one organization to another and may have different strategy implementation. And it has been acknowledged that organisation ambience and resources usage decides the requirements of resources. For successfully implementing the strategy the requirements can be analysed in the following way:
Samsung is the leading company in gadgets, mobiles, televisions, etc. and it is renowned all over the world. But to compete with other brand like Sony, they need to implement new strategy. They have to be more competitive, fast and innovative in their technical appliances. Since, this company is being recognized by all the countries; therefore it has maintained their management staff for good performance. They have to change their permanent policy. So that they can plan for the long term and short term goals. The organization need to develop in order to attain their goals, and for that it need to attain SMART targets. SMART stands for specific, measureable, attainable, relevant and time- bound.
At last it can be seen from the assessment that business strategy is essential for good and sustainable growth of the company. After analysing this assessment, business could become easier to run and formulating strategy for future growth. Hereby, it is clear that business strategy turns the business to its success and should be developed with experts and erudite people who are well versed about the market.
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