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Unit 7 Business Strategy Assignment Tata Steels
In unit 7 business strategy assignment tata steels report a study of an Indian company “Tata steels” has been done. The company is founded in 1868 which is the oldest and largest in the private sector companies of India. The company is trading in various sectors like steel, cars and trucks, chemicals and IT solutions. The company is planning to expand its business overseas and for make it successful there must be strategic planning and decision making. Without marketing planning it becomes tough to manage all the activities in the company. There are many factors which influence the strategic planning and there are many techniques to can be used for strategic planning in the company which are explained in the study. The advantages and disadvantages of strategic planning are also defined in the following report. All the elements related to strategic planning like planning, formulation, execution, evaluation and any changes are explained with their reasons. This study is beneficial for the effective running of the Tata steel UK.
Introduction: In the report we will study about the requirements and criteria to develop and grow the Tata group UK. The company adopts the strategic management for assuring the growth and maintain stability in the company. As in the company is planning to enter in the African and Asian markets there must be an appropriate plan to introduce the company’s projects in these markets. In this report we will study the process of strategic planning and its relevance. The evaluation is also important to effective running of the company and its new projects. So we will study about the evaluation techniques of strategic planning in the Tata group UK (Matthews & Matthews et. al 2013).
1.1 In your report, briefly define the following terms; visions, missions, objectives, goals, core competencies. Assess how these notions inform strategic planning for a business.
In the present business environment any company need to adopt the strategic planning to execute its activities effectively and efficiently. Strategic management is the process of making strategic decisions by analysing different alternatives available in the market. Strategic planning provides a map for the execution of the activities and manage them in a better manner as in every decision related to that activity is taken effectively.There are many factors and terminologies which influence the strategic planning process and must be considered while taking any strategic decision.
- Vision: Visions are futuristic terminology which defines the approach where the company wants to be in the future. Visions are depended on the long term goals and perspectives of company toward its growth in the future. Visions are treated as inspirational tool for the company and motivate the employees to achieve them effectively and are very important to be considered while making strategic planning and decisions.Vision of the Tata group UK is to building collaborative relationships in the company with the customers, employees and all related parties that can create success and developing the activities to increase the portion of the corporate social responsibility
- Mission: A business or organization cannot be established without a mission statement. Mission statement can be described as a terminology which defines the main reason or aim of running a business. It explains why the business is established. Mission is the method to achieve the vision statement of any organisation.In the process of strategic planning and decision making mission statement must be considered as in it explains how the activities are executed and how to handle the customers and their demands. The mission statement of Tata group UK is to maintain the traditional Indian values in the activities of the company and showing care and responsibility towards the community and innovative and responsive solutions to meet the requirement of customers.
- Objectives: Objectives are the short term plans to be achieved in a defined time period by the organisation. They are targets of the organisation which are man and activity orientated. Strategic planning is highly influenced by the objectives of the organisation. Objectives are the path to achieve the goals so strategic planning is done by considering that path. In Tata group UK the objective of company is to provide high quality in its products and services, meeting the client requirements by innovative and responsive solutions (Spee & Jarzabkowski et. al 2011).
- Core competencies: Core competencies give competitive advantage to organisation over its competitors in the market. These are the special features developed by any business which cannot be copied by any other organisation. Like miniaturisation by the company Sony in its products. In the process of strategic planning these core competencies must be considered as in benefits from these special features must be taken. In the Tata group UK the core competency is the brand Tata which explains the Indian Values in the corporate’s trading activities.
- Conclusion: So now we can conclude that these all terminologies play an important role in the strategic planning process and influence by their attributes.
1.2. Analyse factors that Tata Steel UK and yourself, as the strategic manager would need to consider planning and formulating strategic plans. In this part of your report, consider some of the key issues and problems there are with respect to strategic planning. Include at least three factors associated with Strategic Planning.
The strategic planning process is the initial stage of strategic management in organization and helps to take strategic decisions after analysis of options.The strategic planning process should consider some factors while executing the process. While developing the process there must be considered the internal and external factors of any organisation which make impact on the planning process. This can be done by SWOT analysis which defines the strength, weakness, opportunities and threats of the business. This also helps to manage the risk. For environmental scanning there must be considered PESTAL analysis, which explains the macro environment and makes impact on the strategic planning process (Pasqui & Fedeli et.al 2016).
The problem emerged in the strategic management process can be diversified in internal, external and business level problems which can be identified by doing internal and external analysis.The internal analysis can identify the problem related to human resource, organisational structure and culture, leadership style and motivational techniques. External analysis can identify the problems relating economic changes, technological changes, legal and social changes. The problems can be emerged in the process are as follows.
- Resistance to change can be a problem to develop a strategic plan which is an internal problem of human resource.
- Threat of any break down in the economy of the country can be identified by external analysis.
- Lack of funds is a problem in the strategic planning process and can be identified by the internal analysis (Pasqui & Fedeli et.al 2016).
1.3. Define and evaluate the appropriateness of the effectiveness of any two strategic planning techniques used in strategic planning.
This model is developed by Bruce Henderson in early 1970’s. The model is based on the importance of the product portfolio creation which includes both high growth and low growth products in generation of cash. The technique concentrates on the assumption that the higher the market share, higher the cash generation. Increased market share leads the company towards the competitive advantage over its competitors by developing cost advantage. There are four categories in this model which are as follows (Zarza & Luque et.al 2012).
- Dogs- Low market share and low growth rate.
- Question Marks- high growth and low market share.
- Stars- High growth and high market share.
- Cash cows- Low growth and high market share.
Stakeholder mapping- Stakeholders are the key persons in any organisation. By analysing the stakeholders we can evaluate the effectiveness and usefulness of strategic planning process. By this technique the stakeholders are categorised and diversified according to their interests and attributes. There are four steps involved in the process of stakeholder mapping (Zarza & Luque et.al 2012).
- Define or identify the stakeholders.
- Analysing them by their influence on the strategic planning.
- Plan to manage them by communicating with them.
- Engage them with the activities.
Conclusion: So we can conclude that there are many factors which influence the strategic management process in different manner. And evaluation of different techniques of strategic planning is studies.
2.1 /2.2 In your document, analyse the strategic positioning of Tata Steel UK by carrying out an internal audit using SWOT. As a development of your analysis, carry out an external audit using PESTEL as this will support your proposal.
In the strategic planning process importance of environmental scanning is very important. Internal and external environment helps to manage the risk and identifies all the factors influencing the strategic planning process. For effective positioning of Tata Steel UK internal audit must be done by SWOT analysis which explains the strength, weakness, opportunities and threats in the organisation. Tata Steel UK has a brand corporate identity of Tata Group as strong backing. The company is still maintaining the Indian values in its trading and activities in all over the world. The company is excellent in achieving economies of scale. There is effective research and development procedure in the company. The company is highly decentralised which increases the level of performance of the employees. And the company is highly considering the welfare and benefit of the society. Weakness of the company is there is lack of core competencies which is affecting the efficiency. Opportunities are introducing new technologies and collaborating with the public entities. And threats of the company are loss of profit and jobs of workers and closure (Bhaskar & Zhang et. al 2012).
For the external or macro environment scanning PESTEL analysis is done to analyse those factors which can influence the strategic planning process. PESTAL analysis defines the political, economic, socio- cultural, technological, environmental, and legal factors which are important to be considered in the process of strategic planning process. Political factors for the Tata steel UK are the government of the countries and their stability as in the company has acquisitions in different countries. Economic factors for the company can be defined as the changes in the economy of the country and business phases of any economy like recession in the UK have influenced the company badly. Socio- cultural factors are the perspective of the company towards the society and its welfare which is positive of the company. Technological factors in the company are the soundness of the company in technological aspect the company is effectively trading as the largest manufacturer and trader of steel. Environmental factors in the company are to manage the harmful gases and waste away from harming the environment. The company is collaborating with others to reduce the co2 emerging from the manufacturing process of steel. Legal factors are the laws and regulations to be followed by the company of the country (Bhaskar & Zhang et. al 2012).
2.3. Define the term stakeholder in your proposal and then assess the importance of stakeholder analysis with respect to Tata Steel UK and its formulation of a new strategy.
Stakeholders are one of the key persons in an organisation which can be individual, company, firm, and group. They have interest in the every activity of the organisation and can affect the organisations growth decisions related to the policies, culture, structure and objectives of the company. They can be creditors, shareholders, directors etc. (Howard & Ebooks Corporation et. al 2012).
Not all the stakeholders are same and equal.Stakeholder analysis is the process to help in categorised stakeholders according to their influencing level and attributes. Stakeholder analysis is done to complete the process of stakeholder mapping. We can diversify the stakeholders in the following.
- Primary stakeholders- These stakeholders have a direct impact may be positive or negative of the activities of organisation.
- Secondary stakeholders- these are intermediates stakeholders and have an indirect impact of organisational activities.
The stakeholder analyses helps to identify the problems of the stakeholders related to introduction of new project and plan. Interest conflicts can be solved by identifying them. An overall study of stakeholder and their attributes can be done by this analysis. In Tata steel UK stakeholder analysis will be resulted in effective tool for identifying the perspective of the stakeholders for the implementation of the new strategy (Yang & Jin et. al 2014).
2.4 Create and present a new strategy for Tata Steel UK.
For creating a new strategy in the Tata Steel UK which is a big India brand we will focus on the factors which can affect the strategy in positive or negative manner. The present situation of the company is good and there are many opportunities which can be utilised by the company in future to accelerate its growth like adopting and implementing new technologies for smooth running of activities, collaboration with the public entities, and expanding its acquisition in Africa and Asia. For taking benefit of these opportunities there must be created a strategy for ensuring the effectiveness (Tovstiga, G. 2013).
Factors which influence the implementation of the strategy must be identified. This can be done by scanning the internal and external environment. Internal environment includes the impact of human resources , organisational structure and culture etc. internal scanning can be done by the SWOT analyses.For identifying the factors influencing from macro environment external scanning is done by the techniques like PESTEL analysis, PEST analysis. Stakeholder analysis must be done to take their perception and resolve their conflicts related to the new proposal and creation of strategy.The process of formulation of strategy must be followed which includes setting objectives then environmental scanning and setting targets and analysis of options and select the most suitable strategy (Tovstiga, G. 2013).
3.1 Suggest two alternatives strategies and analyse the appropriateness of these strategies. In this section of your proposal, analyses two of the following; market entry, organic growth, growth by merger, acquisition, strategic alliances, substantive growth, limited growth and retrenchment strategies.
Every strategy has different attributes relating to different stages and aspects. We will study two different strategies and their appropriateness in different perspectives like entry in market, organic, substantive and limited growth, and merger, strategic alliance and retrenchment (Wahyudi, I. 2014).
Market entry strategy:
- Organic growth strategy: In this strategy growth of the company remains constant as in the way it was in the beginning. This is a stable growth strategy.
- Growth by merger: In this strategy the organisation chooses to merge and collaborate with other organisation. Both organisations combine together and remain and act as one single entity. This strategy is very helpful to increase the market share as in the customers are also combined by the process of merger.
- Acquisition: Acquisition is the strategy in which one company acquires other organisation by purchasing full ownership of that company.This helps to overtake the market shares and customers of that company.
This is a strategy of market entry in which two organisations come in a contract to share their assets and work as integrated company. These alliances are useful to enter in a foreign market by utilising the brand name and market positioning of other company (Wahyudi, I. 2014).
Michael Porters five forces model is an effective tool to analyse the effective strategy for market entry.In this analysis there are five forces or factors which define the growth and competitive situation in the market of any organisation.These five factors are as follows.
- Threat of new entry- Time and cost of entry, economies of scale, legal and regulation complexity, barriers to entry.
- Supplier’s bargaining power- Number of suppliers, service differentiation, availability of substitutes, cost of transfer.
- Buyer’s bargaining power- Number of customers, stability in the prices, pricing strategies, availability of substitutes and low cost of changing.
- Competitive rivalry- Competitors strength in the market, customerretention and loyalty,quality and price differentiation, and switching cost.
- Threat of substitute- Availability of substitute andcost of switching (George & Kabir 2012).
- Related and unrelated diversification- when a company makes diversification which is related to the existing product line of the company then it is a related diversification. In case the company make diversification which is unrelated to the product line of the company is known as unrelated diversification.
- Horizontal and vertical integration- When different companies at same stage involved for doing business in same or different industries, it is known as horizontal integration. And in case the companies involved in different stage of production in same or different industry there emerges vertical integration (George & Kabir 2012).
Limited growth- Limited growth includes strategies like market penetration, market development, and product development.
- Turnaround strategy- This strategy is useful for strengthening financial position of company by resolving any financial crisis in the company. And transforms organisation from underperforming toprofitable company.
- Liquidation strategy- This is the last stage of the company’s life cycle in which the company closes down by selling its assets and paying its creditors (Kumar & Books24x7 et. al 2012).
3.2 In your proposal, inform the board of your selection in 2.4 and provide justification for this selection.
Tata Steel UK is a big brand name and effectively working all around the world. The company is efficiently satisfying customers by providing high quality products and services, meeting the demands of the customers, maintaining innovative and responsive behaviour in the activities of the company. As a strategic manager of the company we will make a new strategy for market development to expand the reach and market share of the company. This strategy will help expand the company in the African and Asian markets. Company can choose effective strategy for market entry by analysing the strategies by different tools and techniques like porters five forces model which defines overall situation of the market. SWOT and PESTEL analysis are also useful for analysing the internal and external environment making impact on the new proposal.After successfully enter in a market company should make strategies to increase the growth of the company by development of products and markets (Tangpong& Li et. al 2015).
In this report we have studies about the effective selection and implementation of strategies in organisation. The impact of these strategies on the growth of the company is also explained in this study. Importance of different analysis of environment in appropriate selection of strategy in organisation is effectively defined in this report. SWOT and PESTEL analysis are the techniques of analysis of internal and external environment.As a strategic manager of the Tata Steel UK we have designed a new strategy for the further development of company in the future.And justification for the implementation of new strategy is givento the board of the company.
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