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Unit 32 Various Aspects of Business Strategy Assignment
In unit 32 various aspects of business strategy assignment portfolio a detailed discussion is made on weekly topics beginning from week 1 to 9 where various concepts and aspects of business strategy have been explained. In Week 1 the concept of strategy and its significance has been discussed followed by discussion on Strategic Management Plan in Week 2. In week 3, strategic capability has been explained with in-depth analysis on various tools such as value chain, SWOT analysis etc whereas in week 4 aspects of corporate governance have been narrated. In week 5 various strategies like Ansoff, BCG and McKinsey Matrix have been explained whereas in Week 6 Porter’s Diamond and Cage Distance Framework have been examined. In Week 7 strategy methods have been discussed followed by planning ways in Week 8. Finally in Week 9 a self reflection has been provided where all learning and understanding have been projected.
What topics were discussed in class?
The concept of strategy was fundamentalised in the first week. A pre-determined and pre conceived set of ideas directed towards the accomplishment of goals and objectives relative to the company is known as strategy. A sense of direction can be established when there is a sound strategic system in place. (Simerson, 2011) Competitive advantage can be determined along with other factors through the help of a strategy. The Corporate Level of Strategy helps in determining the overall scope of the company. Other main levels of strategy include Business Level Strategy and Operational Strategy. Then the effective difference is established between mission and vision. Vision can be stated as the primary long term goals or objectives of a company that determined what the company wants to be in the future. Mission can be referred to as the small term goals and perspectives that an organisation aspires about. (Kotelnikov, 2016) The collaboration of all the skills, abilities and knowledge of the organisation can be referred to as core competencies. The transformation of issues which are strategic in nature into target oriented entities is known as goals. Objectives are a little different from goals in the sense that they are more specific and are usually a statement that is quantifiable, measurable and realistic.
The strategic management plan is of three main stages. The first step deals with strategy formulation. In this stage most of the strategy planning is done by the top management and/or the lower management, depending on the organisational structure of the company. All the strengths and weaknesses are reviewed and strategy is formulated keeping the various goals and objectives in mind. This is one of the most significant stages as based on the planning that are formulated here; the strategies are implemented in the next two stages. Strategy implementation refers to the stage where the strategies planned and formulated are implemented in this stage with reference of the first stage. After the strategy is implemented, it has to be evaluated whether the implemented strategy has been done so in the best of ways and to the best of results. (Bee, 2013) The external environment of an organisation or a business can be determined by conducting an effective analysis of Porter’s 5 forces or by conducting a PESTEL Analysis of the organisation. The Porter’s 5 forces determine the competitive position and overall strength of the organisation taking into account various factors. The various factors involved with Porter’s 5 forces include the bargaining power of the buyers, bargaining power of the suppliers, threat of new entrant, threat of substitutes and competitor analysis. PESTEL stands for factors that are Political, Economical, Social, Technological, Environmental and Legal in nature. (Brighthubpm, 2012)
Strategic Capability and Competitive advantage are two things that are discussed in brief in the third week. Competitive advantage is the set of attributes that enforces a particular organisation to be considerably ahead of its competitors in the market. Strategic capability can be referred to as the overall efficiency and potential of a set of accumulated strategies that the organisation has designed for itself for future attainment. Previously we saw how the external environment of a company can be carried out. Here we come to know how the internal environment of a particular organisation can be carried out. One of the ways to carry out the internal environment of the company. The Value Chain Analysis is one of the best ways to analyse the internal environment of a company. The Value Chain Analysis plays a huge role in determining all the significant factors of a company which includes activities. The favourable and valuable activities are analysed closely and the less favourable or valuable ones are put up for improvement. The various factors involved in the Value Chain Analysis involve Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales and Service. Inbound logistics can be related as those factors or activities that are concerned with the storing of all the materials that are sourced externally. Operations is a set of functions mainly focusing on the manufacturing unit in a business and the entire hierarchy in case of an organisation concentrating on how the various inputs implemented are resulting into the existing output. Outbound Logistics lay emphasis on how the generated output that includes the finished goods and services are brought to the buyers. Marketing and Sales includes all the advertisements, promotion, publicity and public relation carried out by the company in order to inform, educate and make aware their customers which includes both existing customers and prospective customers. Service is related to all the services and benefits that the customer receives post his purchase of a particular product or service. Mainly customer service and post purchase service can be associated with this as it is important to keep the customers happy even after they have finished purchasing a product or a service so that they can always resort back to the same company or brand for satisfying future demands. Thus it is important to carry out an internal environment analysis of an organisation or a business using the value chain analysis procedure. (George, 2014) An organisational audit can be carried out by effectively conducting a SWOT Analysis of an organisation or business. SWOT stands for strength, weakness, opportunities and threats. The strengths and weaknesses depict all the pros and cons of the internal environment. The threats and analysis depicts the external environment of a business or an organisation. (Mindtools, 2016)
The various aspects of corporate governance, corporate social responsibilities and stakeholders have been discussed in this week. Corporate governance is one of the most popular phenomenon going around in the modern day corporate world. Corporate governance is one of the elements while formulating a strategic plan. One of the most convenient ways to attain corporate governance is by exhibiting incredible corporate social responsibility initiative and performance. Corporate Social Responsibility can be referred to as the set of initiatives taken up by a company or a business in order to promote sustainable development by catering to activities that support the welfare of the community and the business environment . Corporate social responsibility also helps in acquiring a favourable corporate image as people appreciate the social contributions made by the corporate. (Investopedia, 2016) Stakeholders are of two types. External Stakeholders and Internal Stakeholders. Internal stakeholders are those that have an immediate and direct impact on the operations of the company or the business. They include the employees, directors, top management, owner, etc. The external stakeholders include the customers, suppliers, the community, etc. One of the key aspects of this is to keep the external stakeholders happy so that no alternative can be thought of other than resorting to the services of the existing company.
The Power Interest matrix comprises of four dimensions or blocks. The x axis denotes interest and the y axis depicts the power. The four segregations include the following. (Paul & Turner, 2010)
- High power, Interested People: The primary objective should be to satisfy these individuals as they carry a lot of significance for the business or the organisation.
- High Power, Less Interested People: The satisfaction of the individuals should be catered to but not by going over the top and over-burdening them by trying to satisfy them and thus causing boredom as a result.
- Low Power, Interested People: Optimum or adequate information should be provided to these people with constant reassurance at all stages that nothing complex or wrong is anticipated anytime soon.
- Low Power, Less Interested People: Go to the extent of monitoring these people but never make added efforts to provide any satisfaction levels to them.
- Porter’s Generic Strategies depict the following:
- Cost Leadership: Products and services are offered at a cheap or subsidised rate in order to determine considerable competitive advantage.
- Differentiation: This states that a product or a service is enhanced by adding a few elements that make them unique and distinguished from its rivals and competitors.
- Focus: Here, all resources are focused on a particular segment and is highly dependent on the attainment of customer loyalty.
- Ansoff Matrix:The Ansoff Matrix determines the following categories:
- Market Penetration: Where the main objective lies in penetrating the market by invading it and thus as a result enjoying a high degree of market share.
- Market Development: A successful product can be tested for revenue generation in a new market directed to a new segment. This is market development.
- Product Development: Unlike previously, in this case the market or the directed segment remains the same but the product is modified efficiently targeting the satisfaction of the people.
- Diversification: New markets require new products and vice versa and this is how diversification is achieved. (Bachmeier, 2013)
BCG Matrix: The BCG Matrix was first developed in the USA by the Boston Consulting Group long ago. It is a four grid 2 by 2 matrixes that has distinct portrayals on each of the axis. The horizontal axis denotes the relative market share and the vertical axis denotes the relative market growth rate. Business Units are allocated resources depending on the positions exhibited by them. The four cells represent our distinct groups. They are cows, stars, dogs and question marks. (Enz, 2009)
McKinsey Matrix: A lot of things influence the McKinsey matrix like size of the market, demand, rate of growth, etc. This matrix too is one of two axes. Business Strength features on the horizontal axis and industry attractiveness can be established on the vertical axis.
The attention devoted to a particular firm by a product or a service company depends on the demand of the segments. More attention is provided to foreign firms if more demand exists in the foreign locations and vice versa.
The self creation or establishment of sufficient and efficient high skilled resources is known as the different factor conditions
Related & Supportive Industries
The local industries here play a hug role. If they are competitive in nature, firms can determine cost effective inputs
The strategy formulated is a result of all these roadblocks and obstructions being efficiently strategized. (Mindtools, 2016)
Cage Distance Framework: The various ways that trade functions taking into perspective the various trends and patterns it exhibits including information and data on various aspects like capital, funds, deficiencies, etc can be determined in a cage distance framework. The various types of differences that can be administered are economic, geographic, administrative, etc.
- Organic Growth: The process of business expansion can be associated with organic growth. Organic growth relates to the expansion by virtue of an organization expanding independently without acquiring any mergers or acquisitions. Operations dealing with foreign exchange are kept out of consideration. Independent expansion concentrates on factors like expanding the target market, output levels increase, etc. (Angwin, 2016)
- Mergers & Acquisitions: The collaboration of the operations and services of two companies, which effectively forms one accumulated organization or business, is known as a merger. Merger results in a larger customer base and a higher and more efficient manufacturing unit. In an acquisition, one company or business tries and acquires the entire establishment of another company, thus acquiring it buying it and hence has access of a larger customer base as a result of ownership. (Angwin, 2016)
- Strategic Alliance: Between mergers and acquisitions lies the aspect of strategic alliance. In this case two companies or businesses come together and find a basis of mutual agreement to achieve a common set of objectives. Organizations remain independent as no one acquires the other. Equity alliances are formed when one company acquires the stakes of another company but does not acquire the company altogether like in the case of an acquisition. (Angwin, 2016)
Diversification is considered as a corporate strategy in order to enter into a new market or in which the business is not existent in but at the same time aiming to create a new product for the customers.
- Top down Planning: Top down planning relates to the set of strategies and plans formulated as a result of the participation of only the top management of an organization. Top down Planning clearly ideates and objectifies the goals and missions and also the company guidelines are established. The lower management or the employees are not included in this kind of planning. The plans are developed in the top level and then it keeps descending to the lower order. (Lister, 2016)
- Bottom up Planning: In this approach, the development of the plan starts at the lower levels and starts ascending upwards. The plan is determined as a result of all levels of management being a part of it and as a result the chance of missing out on a particular aspect is less. People are more motivated and high on morale as they are able to participate in the process and are often an instance of a sound organizational structure and culture. (Lister, 2016)
- Types of Resources:
- Financial Resources: Credit Lines and cash can be associated with financial resources. Liquid cash and capital are also examples of financial resources.
- Human Resources: The workforce that comprises of staff, employees, managers, superintendents, etc constitutes the human resources.
- Physical resources relate to the five sensory organs and all those entities that are produced by human beings with the objective of making things easier for them to attain.
- Technological resources relate to people, internet, equipments, machineries, processes, etc.
- Managing Conflict: Conflict is bound to arise at workplace as there are various individuals working and difference in opinion and preferences are bound to happen, thus giving rise to conflict at workplace. Conflict can be managed in a lot of ways. First one has to accept the fact that conflict is inevitable. This will help one stay away from it as in his mind he might be anticipating it. Staying high on morale and motivation and being enduring and calm helps in resolving conflict at workplace. An introspective nature also helps in resolving conflict. (Eunson, 2012)
The student needs to choose a interesting and relevant article every week based on the topic discussed and needs to create a commentary for each article
- Article for week 1: This article talks about the aspects of The Trust as a strategy in relevance to attaining the future objectives of BBC. The Trust has the primary objectives that include being the most creative output, lay emphasis on the online operations by being more innovative and aim to serve all sections of audiences which includes all segments. (BBC, 2016)
- Article for week 2: This article depicts the importance of measuring the external environment and the different ways that it can be done has been mentioned in the article. The various kinds of means depicted in this article include SWOT Analysis, PESTLE Analysis and Porter’s Five Forces Analysis. Definitions, examples and templates have also been included. (Arline, 2014)
- Article for week 3: The article for week 3 talks about the various competitive advantages that IBM may possess. IBM is a multinational Information Technology company that is renowned for its restricted payment systems and though it is efficient, it cannot be stated as one of the most popular IT companies among people. On that not, the various advantages that it might enjoy have been discussed in brief. (Forbes, 2016)
- Article for week 4: The article for week 4 talks about the evidence of corporate social responsibility in the world today. Sustainable development is one of the primary targets of every CSR action or initiative and the instances of the prevalence of Corporate Social Responsibility by taking into account the initiatives undertaken by companies like McDonalds, Fosters, Pioneer, etc. (The Guardian, 2016)
- Article for week 5: In this article the various fundamentals of the BCG Matrix has been discussed. The aspects of growth share matrix have been spoken about in this case as a result. The growth share matrix was first developed by the Boston Consulting Group in the early 60’s and ever since the same fundamentals have been followed. The various categories in the four grid matrix include cash cows, dogs, question marks and stars. The conclusions of the analysis have also been included. (Economist, 2016)
- Article for week 6: The article in week 6 deals with the CAGE distance framework and its fundamentals and a little bit of emphasis is also laid on the GLOBE Model of operations. In order to establish the core of the CAGE distance framework, the case of Wal-Mart has been taken for analysis. For further explanation, the operating margin of Wal-Mart for different countries has been considered with reference to the year 2004. As a result, the profitable markets of Wal-Mart were identified. (Ghemawat, 2016)
- Article for week 7: The article for week 7 deals with the aspects of strategic alliances and partnerships. It talks about how the brand and company Hewlett Packard Enterprise overhauled its strategic alliances approach. IT companies are known for their strategic alliances and this article talks about how HP is having the revenue of 53 billion US Dollars and around 250,000 employees which is allowing them to be considered as one of the biggest IT companies. (Moorhead, 2015)
- Article for week 8: The article in week 8 talks about how top bottom planning approach is detrimental when it comes to urban planning. It talks about the approach of the UPA Government of India in the quest to formulate principles for urban planning. (Economic Times, 2015)
The student must create a self-reflection diary where he/she will reflect on what and how he/she has learnt, what challenges the student faced when researching for or creating the portfolio.
The creation of this portfolio has helped me clear most of my concepts regarding the vast topics of strategy and strategy management. First, the various differences between vision, mission, goals, objectives, core competencies, etc have been discussed and then the various corporate strategy levels are spoken about. One of the most important things i have learnt is to conduct the competitor analysis of any business or organisation. The concept of analysis of external and internal environment has also been developed as now I know how to conduct a Porter’s 5 forces analysis and also the Pestle Analysis. I have also learned about the many matrix evaluation that are present. They include stakeholder analysis, the BCG Matrix, the McKinsey Matrix, etc. I have also learnt how an effective SWOT analysis can determine an organisational audit by identifying the strengths, weaknesses, opportunities and threats. The main problems that i had included the findings of a relevant article about each of the topics on the topics discussed in class. Strategy is a huge topic and therefore channelizing the findings to a particular perspective with regards to organisational application. Especially in the case where the week dealt with the study of all the matrixes. Yet, I was eventually successful in relating all the topics to an article and the articles mainly are a part of a newspaper publication or an online magazine or journal. Overall it was fascinating creating this portfolio and now I would like to think that I am updated with the concept of strategic management.
Thus it can be concluded that this portfolio has helped in imparting a thorough knowledge and learning on various aspects of business strategy with practical application to various Articles that were discussed weekly. On the whole it gave a scope to better relate the conceptual learning to evidence based learning. Lastly the reflection has helped to put the entire learning in self understanding form giving a scope to justify self learning.
Angwin, D (2016), In Search of Growth: Choosing Between Organic, M&A, and Strategic Alliance Strategies, [Online], Available at: http://www.financepractitioner.com/mergers-and-acquisitions-best-practice/in-search-of-growth-choosing-between-organic-m-and-a-and-strategic-alliance-strategies?full, Accessed on: 4th July, 2016.
Arline, K (2014), PEST Analysis: Definition, Examples & Templates, [Online], Available at: http://www.businessnewsdaily.com/5512-pest-analysis-definition-examples-templates.html, Accessed on: 4th July, 2016.
Bachmeier, K (2013), Analysis of Marketing Strategy Used by PepsiCo Based on Ansoff's Theory, GRIN Verlag
BBC (2016), Strategy, [Online], Available at: http://www.bbc.co.uk/bbctrust/our_work/strategy/, Accessed on: 4th July, 2016.
Bee, G (2013), Implementing IT Business Strategy in the Construction Industry, IGI Global
Brighthubpm, (2012), Components of a PESTLE Analysis, [Online], Available at: http://www.brighthubpm.com/project-planning/51754-components-of-a-pestle-analysis/, Accessed on: 4th July, 2016.
Economist (2016), Growth Share Matrix, [Online], Available at: http://www.economist.com/node/14299055, Accessed on: 4th July, 2016.
Economic Times (2015), Top-down approach in urban planning not desirable: Venkaiah Naidu, [Online], Available at: http://articles.economictimes.indiatimes.com/2015-02-15/news/59166617_1_smart-cities-new-schemes
consultations, Accessed on: 4th July, 2016