Unit 7 Business Strategy Assignment Sample - Tata Steel
Diploma in Business
Unit Number and Title
Unit 7 Business Strategy - Tata Steel
The Unit 7 Business Strategy Assignment Sample Tata Steel has highlighted the business strategy of the Tata steel of UK. The situation is that Tata steel will going to sell its operation in UK and for that the jobs will be at stake. Based on this situation the report will showcase the process and the techniques that are used to overcome the situation. Evaluation of the strategies is also considered in order to understand the best strategy for Tata steel. Based on that substantive growth is considered to strengthen the operation of Tata steel and this can be possible by considering the additional growth of the other countries.
Task: 1 Report
1.1) Assess how business missions, visions, objectives, goals and core competencies inform strategic planning
Business missions, visions, objectives, goals, core competencies are interrelated with the strategic planning in the following way:
- Mission: As per the mission statement the organization for instance Tata Steel gives emphasis on their performance parameters by creating the value that make the business globally recognized. Apart from that business practices of Tata are followed the principle of business ethics and consider the people as a heart of their business. Thus the strategic planning considers the mission statement by the declaration made by Tata steel for the stakeholders about their business policies and philosophies which will attract them towards the business.
- Vision: The vision of Tata steel considers the enhanced value and corporate citizenship as a benchmark. For fulfilling the mission, vision statement is mainly done. Strategic sales planning can be related with the vision statement by establishing a standard for achieving the mission. The parameters for achieving the mission are being formulated in the vision statement which gives a framework for the strategic planning. (Tata Steel, 2016).
- Business Objectives: The business of Tata Steel in Europe considers five dimensions which are Innovation, customer focus, responsibility, people and operational excellence. Tata Steel considers both the customers and employees in a same level where the safety is the first priority for all. Innovation will attract more customers and modernization in the manufacturing and distribution ensures the operational excellence. Thus the strategic planning involves the steps which are necessary to be followed to reach the goal and business objectives made it possible by ensuring the steps. (Norman, 2016).
- Goal: The goal of the Tata steel is to become a leading steel manufacturer by catering the market like automotive, energy, power and constructions with their steel products. The goal is the important part of the strategic planning which set the target for the organization.
- Core Competencies: Core competencies are the key resources that are required to achieve the business objectives. For Tata Steel innovation, operational efficiency, competent employees, training and development plans, modernization of the facilities periodically by conducting research and development are the core competencies which emerged Tata as a reputed global brand. The strategic planning also considers the ways to achieve the goal and core competencies are the ways to achieve the goal.
Thus we can observe that the strategic planning is interrelated with the mission, vision, objectives, goals, core competencies by ensuring the goals, steps and activities to be performed.
1.2) Analyse the factors that have to be considered when formulating strategic plans.
The analysis of the factors that plays a major role in formulating the strategic plans can be done in the following way:
- Managers: It is the top level management that is responsible for developing a strategic plan for the organisations by considering the business objectives, resource allocation and activities to reach the desired goal. But it is the experience and the skills that are required in the top management while developing a strategic plan for the organisation. Otherwise the strategic plan will not support the goal. (Wheelen, 2010)
- Delegation: When the top management formulate the strategy it is the delegation of duties that is to be shared among the employees based on their experience and specialisation. This will bring productivity in the organisation. But the specialised team is needed to be briefed and trained for giving the performances as per the standard fixed by the top management.
- Targets: Targets are the benchmark which is fixed by the management as a part of a strategic plan in order to achieve the goal. But the target needs to be realistic and achievable which must not de-motivate the employees in their performances.
- Resources: Resources can be the physical, financial or human which are the necessities of a business for achieving the goals. But deficiency in the resources can create a barrier for achieving the targets as per the strategic plans. (Lynch, 2014).
- Time: Time is the important part of a strategic plan. Each and every activities of a strategic plan is fixed with a time period in order to achieve the goal at a right time. But fixing the time without considering the volume of the work activities can decrease the employee’s motivation.
Thus we can observe that each and every factors of a strategic plan have their contribution and also issues which are needed to be overcome to make an effective strategic plan for the organization.
1.3) Evaluate the effectiveness of techniques used when developing strategic business plans.
For evaluating the effectiveness of techniques used in the strategic business plans we need to identify the tools and analyse its application in the following way:
1. BCG Matrix: BCG matrix will help the business to understand its position in the industry they are operating. There are four aspects which are covered by the BCG matrix namely, question mark, stars, cash cows and dogs. These four aspects in the BCG matrix highlights four different picture which we need to analysed. Question mark denotes the introduction of a company where the market share is less with relation to the industry share. Stars are the position where the company has improved their business and they have increased their market share which shows they are in a growth stage. Cash cows are a stage where the growth of the company is high but the industry has become saturated which denotes the maturity. Last is the Dog where the business of the company declines as well as the industry. (Hill, 2012).
But the disadvantage which we can observe from the analysis of a BCG matrix is:
- The high and the low points of the business can be traced in the BCG matrix but when the company will perform in a position that is not so high or low then the BCG matrix will not give a true picture.
- In the BCG matrix only two parameters are taken into considerations which are relative share of a business and industry. But the most important factor profitability is not counted.
2. Mc Kinsey Matrix: In the Mc Kinsey Matrix there are 9 cells where the three aspects of contract law are considered which are high, medium and low. The parameters for analysing the business are industry attractiveness and business unit strength. Industry attractiveness is governed by the factors like market size, market growth rate, profitability of the industry and the level of competition. The business unit strength is governed by market share, brand equity that is the attitude of the people towards the brand etc. (Kotler, 2010).
From the features of a Mc Kinsey matrix it is clear that the business will be analysed from the high, low and medium perspective which is more relevant from the BCG matrix as the matrix ignores the medium parameter.
2.1) Analyse the strategic positioning of TATA steel Europe by carrying out an organisational audit
Organisational Audit is the report which is prepared to determine the asset of the organisation. The capacity, work process, competencies of the human resources, work structure, financial situation etc are considered in the organisational audit for formulating the strategic plan. For conducting the organisational audit different tools are there for instance value chain analysis, SWOT analysis, benchmarking etc. Among all the tools value chain analysis can help to get the actual position of the Tata Steel in the following way:
Value Chain analysis can be divided in two categories which are: (Steiner, 2010),
- Primary Activities: Primary activities as per the value chain analysis are the logistics, operations , marketing, servicing activities of the organisation
- Supported Activities: Supported activities involve the human resource, technology, purchase process as per the value chain analysis.
Technology: Tata steel UK gives emphasis on the innovation part of the company where the services to the customers are given with care and advanced. Up to the minute technology is used in Tata Steel UK for improving the performance and quality of the steel and aluminium. 1000 researchers are working with Tata Steel UK for improving the quality and technology
Inbound and Outbound Logistics: The logistics department of Tata Steel is developed and upgraded to improve the efficiency and cost competitiveness. Best practices are adopted in the Steel plant to enhance the service to the customers by giving emphasis on the supply chain management and delivery facilities.
Human Resources: Tata Steel UK has a diversified workforce based on the personal and professional background. The team are the experts in the steel industry and the workforce are characterised by commitment and hard working. Apprenticeships options are there in Tata Steel for attracting the young talents of Europe.
Marketing: The approach that Tata Steel considers is the marketing oriented where customers are given importance. After sales service is one the important consideration of Tata steel. The service centres are located in the Ireland, UK, Germany, Sweden and Norway which will give assurance to the customers. (Drejer, 2012).
Infrastructure: infrastructure is one of the important considerations where the manufacturing activities are given preference due to the diversified market of Tata in the areas like markets, automotive, power, aerospace etc. For developing the infrastructure 1.5 billion pound are invested in UK to give an edge to the service.
Operation: Considering the operation part Tata Steel can be categorised in two ways which are Ijmuiden and Port Talbot. Apart from the steel plants Tata steel are also managing the rolling mills, coating lines in the Europe. Apart from that sustainability is also maintained in the manufacturing plant which ensured zero harm to the employees and quality products to the customers
2.3) Assess the significance of stakeholder analysis when formulating a new strategy for TATA steel Europe.
Stakeholders are the people or organisations involved in a business directly or indirectly. The management of the organisation needs to understand the stakeholders and their importance. The business decision of the organisations is totally depend on the stakeholder’s influence and power. In these circumstances it is the stakeholders mapping that can address the level of influence towards the business.
The stakeholder’s associated with the Tata steel UK is as follows: (Friedman, 2011).
- Key Players: Key players are having high interest high power. For Tata Steel it is the investors who are investing in the projects in respect of a sound return. To manage them, Executive Committee is there who is chaired by Mr. Hans Fischer. The committee holds a meeting periodically with the investors and ensure them about their investment.
- Latents: High power and less interest can be observed from the latents. They are the customers for which the revenue of the Tata steel is coming. Satisfying their requirements are the major criteria for the organisation. For that Tata steel is driving their business by considering the customers at the heart of their strategy.
- Monitors: Communities can play the role of a monitor where they are given less preference due to the low interest and power in the business. But Tata Steel UK has also given preference to them by creating employment opportunities, maintaining environment friendly equipment for ensuring the safe guard to the environment and community.
- Defenders: Defenders are the employees who have a high interest in the business due to their salary, incentives and bonus. Thus they need to be informed about the situation of the company or the upcoming assignment for making them motivated in order to get a productive performance.
The importance of the stakeholder’s analysis can be accessed from the four dimensions of the stakeholders mapping. (Freeman, 2010)
- For instance if Tata steel wants to design a marketing strategy then it is necessary to understand the influence of the customers and the investors. Customers will buy the products and investors will invest in the manufacturing activities. Thus the importance to identify the stakeholders and carefully managing them can only be possible from the stakeholder’s analysis.
- To establish a working environment in the organisation it is needed to understand the influence of the employees. Thus it is needed to keep them informed about the work process or activities in advance for the sake of motivation.
- For maintaining a long term employee relationship with the suppliers of Tata steel it is needed to establish a positive and professional relationship which will ensure win-win situation for both.
3.1) After formulating a new strategy for TATA steel Europe, analyse the appropriateness of the alternative strategies relating to market entry, substantive growth, limited growth or retrenchment for TATA steel Europe.
The new strategy for Tata steel Europe will be focused on the market development in UK. The scenario of the steel industry is not good in UK due to the cheap availability of the steel products from China. The customers of the steel industry namely the aerospace, construction, power are shifted from Tata which has created a critical situation. As a result Tata wants to close the manufacturing site which will make the employment of the employees at a stake. To overcome the situation it is needed to ensure the customers about the quality of the products from Tata steel UK and other than that Tata has to adopt a strong promotion for growing the confidence of the customers towards Tata. The framework for the market development strategy of Tata steel UK will be based on:
- Focusing the needs of the customers. The customers for Tata are shifting towards the Chinese product due to the price they are offering. In that respect Tata need to ensure about their quality value to the customers
- Innovation and the technology is the part of the strategy where Tata needs to develop the products with comparatively low cost so that they can offer the customers at a reasonable price. For instance the Corus process, himselt process can help in this scenario.
- Integration of the marketing communication is needed to be designed effectively for convincing the customers about the quality of the products in comparison with the Chinese products.
The alternative strategy can be analysed in the following way: (Lymbersky, 2013).
- Market Entry: Market entry is the strategy which ensures new market for the organisation due to the significant growth in that market. But Tata steel has their presence across the globe and it will not be justified for the present situation. Tata steel has to operate their business in UK by taking challenges with the Chinese steel manufacturers. For that market entry is not relevant with the situation.
- Substantive Growth: Substantive growth is the strategy which considers the added growth of the other business units of an organisation. For instance if Tata steel is moving significantly in India then they need to utilise the fund in UK by enhancing the functions effectively in order to get an edge over the Chinese and Brazilian competitors. This strategy can be consider to tackle the decision of Tata steel UK to sell the plant.
- Limited Growth: Limited growth is to stop the growth of some activities in order to maintain the financial health of the organisation. But this strategy is not appropriate for Tata steel to beat the competitors whereas it will give chance to the Chinese competitors for expanding their market in UK.
- Retrenchment: This is strategy when the organisation restricts the output in order to mitigate the risk. But this will not be right for Tata steel UK in this situation. They need to give focus on the promotion part and should continue their manufacturing in order to beat the Chinese rivals.
3.2) Justify the selection of the strategy you proposed in AC 2.4 in terms of suitability, feasibility and acceptability
The objective of the Tata steel is to foster the market of UK effectively. For that the strategy of the substantive growth is needed to be followed to overcome the critical situation. It is clear that Tata steel finds it difficult to cope up with the Chinese competitors and for that they want to sell the plan which will affect the employment opportunities. In this respect substantive growth can help the Tata steel to counter the competition and to ensure the customers about the quality of their products. The strategy can be justifies in the following way:
- Suitability: The net sales or the income of Tata steel in India has increased from 8991 crore to 10, 371 crore approximately. This increased profit can be utilized in the UK plant by making an effective promotion and innovation of their technology which can aware the customers of different industry to consider the steel of Tata. (Tata Steel, 2016).
- Feasibility: The feasibility lies in this strategy as Tata wants to sell their plants for the high competition and cheap resources of China in the steel production. In this respect if Tata can convince the customers based on the quality and the after sales service then it can take the challenge and beat the competition without selling the plant.
- Acceptability: The strategy will be acceptable as Tata has a diversified business and they can adjust the profit from one business to another. If they can adjust the additional growth from one country and carry forward it in UK then the jobs of the employees will be secure and Tata can also achieve the leading position in Europe. Maintaining high quality in the steel manufacturing will also the customers who are dealing with the Chinese manufacturers. At the end of the day it is the value that both the parties will concern.
4.1) Assess the roles and responsibilities of personnel in TATA steel Europe who are charged with the strategy implementation.
The roles and responsibilities of the personnel in Tata steel Europe are very much important to implement the strategic plan in order to get the desired result. The assessment can be done in the way mentioned below:
- Role of top Management: The top management of Tata has to deliver the blue print of the strategy by defining the controlling and coordinating factors. The top management of Tata steel should also consider the global team who will be giving the clear picture about the company in different countries. Based on that the top management will design a plan and communicate to the middle management for the sake of implementing. The top management will prepare a budget and based on that the middle management has to divide the activities for getting the desired result. (Bowhill, 2010).
- Role of Middle Management: The middle management is the connector between the employees at a lower level and the top management. Based on the plan of the top management, the middle management will delegate the duties and responsibilities to the employees and will implement the plan as designed by the top management. The middle management will break the targets on the department wise and communicate the employees for following the same. They will measure the performance and convey the feedback to the employees and also to the top management about the status. The middle management will also have to conduct the training session in order to increase the efficiency level.
- Role of the employees: The employees have to follow the guidelines given by the middle management in order to achieve the targets. The employees have to understand that without making their job at stake, Tata steel has adopted another strategy to counter with the Chinese competitors.
4.2) Analyse the estimated resource requirements for implementing the strategy proposed in AC 2.4.
For implementing the strategy we need to consider certain resources which are as follows:
- Budgetary resources: A budget is needed to be prepared by considering the current expected market returns and specific percentage of the fund from different countries. Estimation then market return and including the certain percentage of the substantive growth in another country can give a clear picture. Based on that allocation of the fund to the promotion and technology will be considered. As the main objective is to counter the competition by not selling the plant and for that a budget to include the working capital of other country is needed. (Bryson, 2011)
- Personnel Resources: One of the major requirements in order to successfully implement the plan. After allocating the fund, the personnel will be responsible to make the plant of UK towards profitability. For that the marketing activities need to be strong for assuring the customers to consider the business with Tata steel UK. R and D team of UK will have to be competent to ensure an effective innovation which will reduce the cost of the manufacturing. Thus motivation towards the employees is needed in order to ensure productive performances.
- Physical Resources: physical resources in the sense after sales service counters will needed to be expanded in Europe to maximize their reach towards the customers. The Chinese manufacturer are taking the customers and in this respect Tata steel have to create a strong brand equity for which the after sales service is needed to be expanded. It will be possible with the substantive growth strategy where the investments will be carried forward from other countries where Tata steel is operating in a sound profit growth. (Proctor, 2014).
- Technology: Technology is the key business driver in this situation. Tata steel needs to ensure technology in their manufacturing sites in order to reduce the operating cost and for that they can compete with the Chinese manufacturers.
4.3) Evaluate the contribution of SMART targets to the achievement of the strategy implementation you proposed in AC 2.4.
The strategy that has been adopted is related with the SMART targets. SMART targets will give a direction and justification for the strategy that has been formulated for enhancing the growth of Tata steel in UK. The objective of the strategy will be to continue the operations in UK but the additional growth will be consider from the other countries where Tata steel is operating at a signifi8cant profitability. This strategy is related with the Substantive growth and the evaluation for the SMART targets will be done in the following way:
- Specific (S): Specific part of the strategy is the continuation of the operations in UK and for that substantive growth is the only way to consider. Tata steel of UK can consider the horizontal integration with other steel plants of UK for maximising the operational efficiency and also to beat the Chinese rivals.
- Measurable (M): The measurable part of the strategy can be the business turnover of the following months after the implementation of the strategy. If the strategy is successful then it will reflect in the sales volume of the quarter and if it is not then it also can be measured. But sometimes it takes time to show the desired result which cannot be measured in the limited time scales. (Harrison, 2002)
- Achievable (A): The strategy is only achievable if the result is positive and supports Tata to with draw their decision of selling of their plant in UK. But achievable is also questionable if the business environment is critical. As the business is depending on the customer’s acceptance of the steel products from Tata than the Chinese manufacturers.
- Realistic (R): Realistic part of the strategy will be the present situation where Tata is facing a critical condition to cope up with the Chinese rivals. Based on that horizontal integration by the substantive growth is the only possible way to overcome the situation.
- Time Bound (T): Time bound is the time scale that has been fixed in the strategy for measuring the development. In case of Tata the forth coming quarter will be the assessing time for measuring the success of the strategic plan. But fixing the time is to be done carefully otherwise monitoring the success will be difficult.
Task 2: Design posters
2.2) Produce an informative poster that presents an environmental audit for TATA Steel Europe
2.4) Produce a creative posterwhich presents new strategy for TATA Steel Europe
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Thus we can conclude that Tata steel can continue its operation in UK without selling the plant. The possibility is the substantive growth where Tata can adopt the horizontal integration with other steel plant in order to compete with the Chinese and Brazilian competitors. The Unit 7 Business Strategy Assignment Sample Tata Steel will showcase the effectiveness of techniques used in the strategic business plans like the BCG matrix, GE matrix. Organisational Audit is also there in the report which is prepared to determine the asset of the organisation. The capacity, work process, competencies of the human resources, work structure, financial situation etc are considered in the organisational audit for formulating the strategic plan is done by considering the Value chain analysis.
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Lymbersky., C. (2013). Market Entry Strategies. Management Laboratory Press
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Proctor, T (2014). Strategic Marketing: An Introduction. Routledge
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The Unit 7 Business Strategy Assignment Sample Tata Steel has highlighted the business strategy of the Tata steel of UK, We are posting Locus units solutions so scholars can explore the our Assignment Help in UK and get review the quality of our work.