Strategy, Business Information and Analysis - Essay Example

Strategy, Business Information and Analysis Introduction The business environment is dynamic and often experience new changes and as such, there is need for companies to assess their performance or operations on a constant basis. This assessment ensures that companies are not left behind in terms of adapting to the new changes in the market. To carry out an assessment of the companies, the management often engages the services of consultants who are looked upon to provide advice on the way forward. In terms of changes in an organization to meet the market demands, there are numerous issues that needs to be considered in improving a company’s performance. Such issues include how a company can incorporate new technology, the leadership style in the company and improving worker engagement. In today’s business world, technology has become a driving force in terms of improving efficiency. Most companies today are forced to adapt to new technology as a way of remaining competitive in the market (Collis & Rukstad 2008, p.86). However, embracing technology comes with its challenges that include training the staff on how to use the technology. Other than technology, the management are also faced with a hurdle in terms of the best leadership style to use in their companies. In some instances, the leadership used in a given company often result in poor performance which in turn affects negatively on a company’s productivity. In addition, worker engagement is also necessary for companies since it is the key to improved performance and productivity. These aforementioned issues are necessary for companies to considered when developing a strategic plan; however, in order to come up with an effective plan, most firms often seek the services of consultant who consider themselves expert in providing professional advice. In a rush to provide a solution, most theorists or consultants often overlook the importance of strategy and how it can be constructed (Collis & Rukstad 2008, p.90). What is strategy? In a given company, a strategy denotes a plan or action taken by the company for purposes of achieving a long-term goal. In designing a plan of action, companies often engage in a complete assessment of the performance or operations to determine areas that need changes. While seeking the services of consultants if vital in terms of developing a strategy for the company, most of these experts often miss the point regarding the ideal direction that a company can take to meet its long-term goals. While most of consultants can agree on what a strategy entails the management of a given company needs to understand that strategic plan within a company denotes a change process that is meant to improve performance and ensure that the company remains competitive in the market (Zenger 2013, p.74). When developing a strategic plan, firms need to consider numerous factors that exist in the market in which they operate. This allows firms to come up with a plan of action that ensures they remain relevant and up to date with the current changes in the market. Further, it is also important for the management to understand that strategy exists at various levels of a firm’s operations and includes corporate, business unit and operational strategy. With regard to the overall purpose of a business entity, strategy plays a role in meeting the stakeholder expectations. Meeting the stakeholder expectation is important in any business entity in that the investors have a greater influence on the business. On the other hand, a plan that focuses on the business unit is necessary to ensure that companies can compete successfully in a given market. In essence, a business unit strategy focuses on making strategic decision regarding product choices, meeting customer demands, remaining competitive and exploring new opportunities (Patanakul & Shenhar 2012, p. 7). With regard to operational strategy, this entails how various sections in a business is organized for purposes of ensuring that corporate and business unit levels operate efficiently. As such, the operational strategy ensures that there is adequate resources that can be utilized optimally by a company. When implementing a strategy, there is often confusion with regard to the necessary step to be taken. This confusion often emerges as a result of lack of consensus regarding the ideal action to take in order to move the company to the next level. The implementation of strategic plan in an organization requires the input of everyone at all levels of the company. Other than management making decisions in a boardroom, coming up with a strategic plan also require the input of other personnel working in the company. This ensures that there is a consensus regarding the plan of action taken to improve performance or operations in a given company. Relying only on the expert advice given by consultant might not necessarily improve an organization’s fortunes. This is because they may lack first-hand experience regarding the nature and operations of a given business entity. This as a result may lead to a poor judgment regarding the way forward for the company. In addition, first-hand experience is important when implementing a strategic plan since such plans are designed depending on what exist in the market and not based on theory, but practicality (Mathur & Kenyon 2008, p.15). Business entities compete with each other for the same market and as such, strategy is needed if a company is to gain a competitive advantage. This means that strategy provides an avenue for companies to come up with plan of action that ensure they become unique from each other. It is such differentiation that ensures that various companies remain competitive in a flooded market where various companies deal in similar products (Yang & Zhu 2012, p.169). Further, strategy is also a tool that companies can use to make contingency plans, which are important in ensuring that a company does not find itself losing business in the near future. The business environment changes constantly and this means that it is important for companies to take mitigation measures earlier to avoid losing profits. In the business environment, number of factors often affects negatively on productivity. For instance, political instability or economic meltdown can affect the productivity of a given company. As such, contingency plan as a strategy ensures that a firm does not suffer significant losses in times of a low demand in the market (Yang & Zhu 2012, p.171). Does strategy matters Companies that do not have a strategy often lag behind in terms of being competitive in the market. This is because they lack a plan of action to ensure that the company remains relevant in a competitive market. In essence, strategy for any business entity matters because it provides direction for the company in terms of where the company wants to be in the near future. In order to realize an efficient plan of operations in a company, there is need for a strategy. This helps the management to come up with important decisions necessary to improve performance and productivity of a company. However, without a strategy, most companies are bound to suffer numerous loses as a result of not conforming to the current changes in the market (Bello & Ivanov 2014, p.51). Planning within an organizational set up is important in terms of ensuring that operations in an organization run smoothly. For instance, implementing a process of change management in a company requires a strategy. This is because, any change in an organization requires the involvement all staff at various levels of the organization. This helps to avoid any conflicts that may arise as a result of a new change in the organization. Where the management effect changes without informing other members often affect negatively on performance and production. This is because other employees may not be happy with the new changes that have been introduced by the change agent. As such, prior to making changes in an organization, strategy plays an important role in ensuring that there is smooth transition within the organization. For instance, when effecting changes in an organization, strategy matters in that it allows the management to come up with a plan of action that ensures the company meets its objectives with regard to the new changes (Bello & Ivanov 2014, p.52). By implementing a plan of action for example, a company’s management can engage in a consultative process with other employees regarding how to effect changes in the company. As a strategy, accommodating the views of other employees in making new changes in the company, help in motivating workers to adapt to the new changes in the company. Further, strategy matters because it assists companies to organize how firms can operate. This includes the type of leadership style that the company can adapt as a way of improving its performance. In any organization, leadership style embraced by the management often plays a role in influence worker engagement and productivity of an organization. For instance, a company that embraces creativity or innovativeness may adopt a democratic style of leadership as a strategy to improve productivity. This type of leadership style will provide employees with space to explore their talent with intent of improving productivity. In addition, workers tend to be motivated when they participate in the decision making process (Bello & Ivanov 2014, p.53). On the other hand, there is stiff competition in the business world and this means that companies have to come up with a strategy that provides an advantage over other companies. This allows business entities to assess their capabilities in the market and come up with a plan to ensure they remain relevant. In a liberalized market, it is common to find a number of businesses dealing in a similar product and this often affects negatively on sales. This is because some companies may offer cheap prices for the same goods or products; thus, most customers may be attracted to the companies that offer affordable prices for products. However, it should be noted that while some companies offer cheap prices for their goods quality also matters. At this point, strategy matters in terms of going for a higher price by improving the quality of a product. In this sense, while companies deal in a similar product, prices may vary because of quality. Quality in this sense is a differentiating strategy where other companies are producing low quality goods that they sell at a cheaper price. This will ensure that customers shift back to similar products that cost more, but offer quality (Parker & Storey 2010, p.208). On another note, strategy matters because it allows companies to come up with mitigation measures for the anticipated risks of doing business. Without a strategy, it is almost impossible to forecast for the unforeseen risk of doing business. While businesses fetch profits, there are also risks that firms needs to mitigate to avoid suffering losses in the future. For example, companies should gain knowledge with regard to the market trend. This allows firms to come up with a plan that ensure they do not suffer a loss when the demand for products is low in the market (Parker & Storey 2010, p.215). In terms of recruiting employees, strategy also matters in that a firm selects those it wants to recruit depending on their main aim. For instance, a company that demands excellence from its employees can adopt a strategy of recruiting highly skilled and experienced workers. On the other hand, a company that has recently joined the market can employ a strategy of going for new graduates in the market with an intention of training them further on the job since the company is still growing and cannot afford to pay highly experienced workers who may eventually shirk because of poor payment. In addition, strategy also matters when it comes to employee retention. The strategy that a firm takes in managing the affairs of the employees also has an influence on performance and productivity. Employers know that the effort of their employees is important in improving performance and productivity. As such, it is important to adopt a strategy that ensures employees are happy with their work environment. This involves providing better pay packages and providing them with other incentives that ensures there is a low employee turnover rate (Parker & Storey 2010, p.217). Strategy also matters when it comes to the need to expand a business since it allows a company to come up with a plan of expanding its business. When making decision regarding the expansion of a business entity, strategy plays a role in considering a number of factors. In essence, a prior plan is needed to ensure that the expansion becomes a success in achieving its main aim. In every activity of a business entity, strategy matters because it provides the management with a blue print on how to implement various plans in a company (Parker & Storey 2010, p.220). How is strategy constructed? Strategy is important to implement in an organization because it ensures that the organization becomes aware of where it stands and where it is headed. Without a strategy, an organization may lack direction or its aim of existence. Prior to implementing a strategy, there is need to assess the organization’s activities to know what type of a plan is required to move the organization forward. For instance, a firm that wants to become competitive in the market needs evaluate itself using tools such as PEST or SWOT analysis. This helps firms to understand the changes in the market, and including the firm’s strengths and limitations. On the same note, such an analysis ensures that a company develops a strategic plan meant that resonates with the market trends and improve on weaknesses (Fletcher & Harris 2013, p.47). On the other hand, a strategy can be constructed or implement by the top management determining what objectives or goals are needed in the company. This helps in deciding on the strategy to be used in each department within the company. It is important for the top management to come up with a plan that is meant to direct various departments in the company and such plan need to reflect on the company’s main objective or goals. Developing a strategy for the company also depends on how the management evaluates the existing practices and procedures in the company. This involves focusing on the areas that are seen to be lagging behind thus; the need for developing efficiency strategies. For instance, a strategy in this sense may involve improving a firm’s resource use. Further, strategy can be constructed for purposes of improving a company’s productivity. This involves ensuring that employees perform their tasks efficiently. In this context, the strategy implemented may involve improving employee morale and offering other incentives meant to enhance worker engagement (Fletcher & Harris 2013, p.51). Strategy can also be constructed during times of managing the change process. This is because the change management process requires a plan in order to achieve its aims. In this regard, strategic plan that is implemented involves one that ensures employees agree with the new changes in the company. In constructing such a strategy, the management needs to look at a number of factors that include cooperation and efficient communication within the departments in an organization. For instance, embracing cooperation as a strategy ensures that the management consults other workers when making new changes in the organization. This allows for consensus because the changes that are made in an organization also have an impact on the workers. Consulting the workers ensures that they become part of the process and contributes towards the new changes, which is important in avoiding conflicts over rushed decisions (Fletcher & Harris 2013, p.62). The construction of a strategy is also required when establishing a winning formula and this is derived by how best a company can satisfy its customers. On the same note, companies that make profit need to ensure that both customers and shareholders are happy and this is why companies have to come up with a strategy to satisfy the needs of customers and the shareholders. In constructing such a strategy, there is a need to identify the company’s customers and shareholders. This involves assessing what the customers require and the role that stakeholders play with regard to the company’s success (Fletcher & Harris 2013, p.65). Through a stakeholder analysis, a company can identify the important needs and preferences prior to developing a strategy for the business. The construction of a strategy in this sense, also require a look at the prevailing trends in the market. This will help to understand the segments existing in the market and how to reach the targeted population in a cost effective manner. Further, strategy development is also necessary when comparing a company’s products with the competitor’s products. This ensures that a company can gain knowledge of the competitor’s competencies and improve on its own competencies (Fletcher & Harris 2013, p.68). Strategy is also necessary when a company is facing a mirage of problems and in this sense, strategy can be constructed by identifying an approach for solving problems that is considered effective. Numerous problems are encountered in an organization and this requires the organization to develop a strategy meant to deal with various issues that may arise. For instance, a firm may face a problem like poor performance from workers. This is a situation that requires a plan to ensure that the morale at work is enhanced. In this respect, it is necessary to develop a strategy that increases worker engagement. This involves implementing a plan that is geared towards listening to the issues affecting employees and coming up with solutions to solve such issues with the aim of improving worker engagement (Fletcher & Harris 2013, p.71). As aforementioned, strategy can be constructed by formulating three basic questions that include where the company is at the present, where it is headed and how to get there. When determining where the company stands at present, strategy implementation is necessary for purposes of looking at the foundational elements such as the company’s mission. By looking at the company’s mission, this help to assess what is happening in the company with the aim of making changes. Strategy construction is also important in establishing the guiding principles for the company. This helps to clarify company’s intention in the market and guide the company’s daily activities. In addition, strategy construction is also necessary in emphasizing a company’s core values that are important in strengthening a firm’s strategic position in the market (Eigenhuis & Djik 2008, p.56). Conversely, in determing where the company is headed, strategy is often implemented to cater for the future prospects of the company. This ensures that a company can plan efficiently for the future and prevents the business from making significant losses because of poor planning. In this sense, strategy is often implemented to ensure that a company realizes a sustainable business prospect. In addition, strategy in this context is constructed to determine the area the company can prosper and where the company is unique compared to competitors. Strategy is also important when presenting the image of the firm to customers and other stakeholders. Presenting a positive image is important in terms of ensuring that a company remains competitive for a longer period of time (Humphreys 2013, p.49). In terms of getting there or remaining relevant in the future, strategic plan is developed to ensure a firm realizes its vision. In realizing the vision, a strategic plan can be development by focusing on factors such as strategic objectives. This involves the important areas in a company or the business that connects the mission and the company’s vision. Further, strategic planning is crucial at this point because having a plan helps in identifying the vital activities that are needed to realize a company’s vision. It is important to develop a strategic plan that is tasked with identifying the company’s strengths and the existing opportunities. Strategic planning is also important when developing short-term goals that are seen as necessary in converting the strategic objectives to meet certain performance targets. On another note, a strategy plan can be developed when a company wants to improve on its efficiency. This involves a plan for instance, to introduce a new technology, policy or a program in the company that is geared at improving productivity. At present, advancement in technology means that, the strategy that a company adopts need to consider R&D capabilities to improve their performance in the market (Kwicien 2014, p.18). Further, strategy development is also a key in managing the finances of an organisation and this involves the establishment of checks and balances. Most firms suffer losses because of poor management of the firm’s resources meant to improve on performance and productivity. However, when the firm implements a plan that emphasizes the need for accountability, this reduces the misuse of funds needed to improve performance and productivity. Strategy can also be constructed to improve communication in the company. In most organizations, the relationship between the management and other staff is often strained. As such, strategic planning is necessary in improving communication between the management and the lower cadre staff. A key strategy in this sense involves the management participating actively in the company’s operations other than taking hands off attitude. This ensures that the management and other staff establishes a working alliance geared at meeting the company’s objectives (Campbell & Alexander 1997, p.48). Conclusion While consultants provide expert advice with regard to strategy implementation in companies, it is also important for the management and other workers to come up with their own initiative geared at improving performance and productivity. The consultants only offer advice, but the effort of changing the prospects of a company depends on the cooperation between the management and workers in implementing new strategies. References Bello, B., & Ivanov, S 2014, ‘Growth strategies for very small organisations: A case study of a very small entrepreneurship’, International Journal of Organizational Innovation, Vol. 6, no. 4, pp. 51-53. 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