Strategic Management Practices in Retail Firms - Article Example

Running Head: Strategic management practices in retail firms By Name: Institution: Module: Instructor: Date: 1. What is strategic management? Strategic management or planning involves structured initiatives aimed at producing fundamental actions and decisions which serves to guide and shape an organization in terms of its endeavors and how to achieve them through future focus. In this effort, strategic management defines the organisations’ vision, mission, goals, values, objectives, responsibilities and roles, timelines, etc. This process called strategic due to its involvement in preparation of the best means of responses to eventual circumstances within its working environment. The responses focus on strategies regardless of whether the events occurring are known in advance or not. The reason is to appropriately tackle emerging hostile and dynamic environments. Strategic management thus means having visionary organization's objectives, resources, and incorporation of both into responsive readiness to working conditions dynamisms. Strategic management is as well useful in supporting strategic thinking for best management practices such as efficiency and effective in an organization. Strategic management can be categorized programmatic, organizational, and functional strategies. The categories are only differentiated based on the specificity of focus. For example, organizational strategy is geared toward planning avenues for development such as earned income, collaborations, selection of businesses, Joint ventures or mergers, etc. on the other hand, programmatic strategy outlines management, development and delivery programs. Functional strategies in an organization aims at articulating administrative management which supports requirements impacting on the effectiveness and efficiency of organization such as designing a financial system that caters for accurate information based on cash accrual techniques. 2. How do strategic differ from other managers Strategic management differs from other management functions based on its key role which emphasizes on ‘assumed’ environment. While other management such as administrative, human resource and other being concerned with usual functions in the organization system. Strategic management is focused towards development of plans that steers the organization in achieving intended goals either short term or long term. The assumption is that current or existing knowledge about future conditions provides sufficient information for implementing change in the organization in the face of dynamic business in future. 3. What kind of roles do strategic managers play Strategic managers in an organization are competent and reflective leaders who play crucial roles in modeling core organisational competencies. They have capacity of recognizing and integrating core business values from daily operations into strategically organized and informative skills training to equip staff at all levels in anticipation of future organizational challenges. In this regard, strategic managers assume definitive and strong influence on the breadth and depth of company business operations. The unique qualities and roles played by strategic managers stem from their competence and attributes which foster working relations with other employees. This is because, poor relationships often lead to negative impact on workers competence eventually resulting to customer satisfaction, declining spirals in morale, and ultimately on the organization success. Therefore, strategic managers play essential roles of leadership and are committed to stewardship of company vision. 4. What kind of support do they need Strategic managers require empowerment, positive, encouragement, trust, nurturing, confidence, and mutual respect for their initiatives in order for the organization to realize it set goals. 5. What do we mean by the strategic environment If and an organization’s running is not effective or the staff are not handling their duties efficiently, it is the outlook of the organization to blame and not the staff. When new policies, disposals, re-location, acquisitions, targets are introduced, environments and systems also change. 6. The value of information to the strategic environment The environment in which business operate requires valuable information and channels for information flow for purposes of strategic planning, for example statistical analysis information is needed in determination of market or industry attractiveness with insights on company profitability. In this way it supports decision making on market entry or exit mode in a specified segment. Information is also necessary in comparing the effects of competitive forces on the company and to other competitors. 7. The Five Forces Model of the strategic environment put forward by Porter In line with company or product operation environment, Michael Porter proposed five forces aimed at analyzing market competitiveness. According Porter's five forces model five key aspects which threaten performance or entry are analyzed based on the power of suppliers, power of buyers, competitive rivalry, and presence of substitutes (see Table 1). Table 1 Porter's market forces analysis   New Entrants   Suppliers Industry competitors and extent of rivalry Buyers   Substitutes   Porter’s model expects corporate strategies set towards attainment of opportunities as well as confronting competitive threats impacted by external environment. This means the company competitive strategy is expected to master industry structures and the ensuing dynamisms. 8. Avoiding conflict Implementing change management requires attentive planning and most important is to involve and consult with those who will be impacted by the changes. Change cannot be forced on people otherwise difficulties will arise. However, change If you force change on people normally problems arise. Change has to be measurable, achievable and realistic. Those affected will cope well if change is properly managed and understood. There is no doubt change can be worrying and the manager’s should be in a position to allay any fears. When developing style and techniques in positive management, McGregor's XY Theory is very useful. The theory outlines modalities for organizational development, motivation and culture management. There exist diverse techniques on conflict and how to manage it. The Logical Conflict Management Approach; This approach assumes that people are able and do consciously prepare themselves mentally how to handle precise conflict when it arises. Compromise, power-based, collaboration or avoidance are some of the concepts for handling conflict that are advanced by this approach. 9. Strategic Information Strategic information is the technique applied in transferring information within departments in an organization is analyzed through mapping information flows. Though this process in itself is uncomplicated it can be used to determine short and long-term budgeting. Mapping of information flows makes it possible to define competition and rank clients for subsequent reference in an information resource center (IRC). When implemented information flows sift inconsequential or irrelevant material so that only very important information is available. The result is closer ties with key stakeholders and better perception of the company. 10. Tactical Information There are three succeeding levels namely, tactical, strategic and operational which are applied in Business intelligence (BI) in an organization. In industry publications tactical business intelligence is referred to as analytical or traditional. The intelligence tools are used to analyze trends in business often comparing sales or expenses performance of a previous period. On the other hand strategic intelligence utilizes established management tools such as Balanced Scorecard or Six Sigma to be used management and executives, often in with a formal management methodology. This level often referred as performance management (PM) is highly favoured by business executives. 11. Operational Information Information is delivered to the business point where the information is used to perform specific functions by operational business intelligence. To illustrate, when customer calls a travel agent inquiring about flights, the customer care attendant will retrieve needed information from the computer real time (see figure 1) Figure 1 Structured Information strategies (Source: http://www.information-management.com/news/1055164-1.html). 12. Business content of Information (why, what and how) 13. Strategic Alignment Strategic alignment in management covers the aspects of organisational change in a fast paced, dynamic times characterized by continuity or discontinuity. Strategic alignment is critical in people/organization/technology or strategy/structure/systems for various reasons which predispose a degree of management influence and thinking higher compared to other individual management practices. This calls for strategic alignment to organizational mission statement. This involves sharing of knowledge or skills, resources, and coordination of activities across all programs should be divested. If the is need some programs can be terminated in order to improve core competencies and services to give clients and programs better effective, efficient agencies, or aggressively compete with less efficient or effective programs. 14. Strategic Position, choices and action Organisational excellence, according to Pearl S. Buck, the American author of The Good Earth, claimed “Excellence is one word that offers greatest secret in work with joy, knowing how some things are done is enjoyable”. Leadership in organizations offers direction, on strategic position of products through well-defined and articulated mission vision, and goals. Organizational vision should be shared at all levels through proper communication. Organizational actions and choices must be geared towards boosting employee morale as long term company viability. Workers competency through technical skills and knowledge is translated into total quality of services and products. Therefore an organization with skilled and competent employees is able to strategically position itself above competition. Actions applied in reinforcement and support and reinforce of developing core competencies in organizations are mostly based on relationship-based. This include 1. having a timely and clear feedback and communication ,2 defining direction and goals of the company and work unit, 3 reinforcing and defining clear lines of responsibility, authority, and accountability,4 recognizing and rewarding positive performance and addressing negativity or in capabilities, 5 identification of knowledge gaps followed by provision of focused, personalized training, 6 decreasing unrealistic anxieties and fears regarding job security, 7 encouraging specific skills and knowledge development in all core dimensions, and 8 allowing employees to familiarize to acquired competencies by rehearsals. 15. Organisational competencies Competence in an organization is envisaged in it competitive positioning. This means the organization competitive position seeks to addresses levels by which it has a greater potential and capability in funding programmes as well as serving its client base. Competency in organization starts from workers satisfaction, thus recognition of workers morale within an organization directly impacts on their level of satisfaction and indirectly to customer’s satisfaction degree which is a measure of company's ultimate profitability. Competence in leadership, promotes core values necessary for workforce development across the organization. This raises existence of success opportunities, positive long-term company outlook, customer retention rates and ultimate successful organizational performance. Organizational competence stems from empowerment strategies which enhance interpersonal and individual effectiveness and leadership. There are eight core competencies which should be incorporated to enhance higher competence in an organization, this include; interpersonal effectiveness, technical competency, personal mastery, creativity, systems thinking, customer service, recognition of organizational stewardship, and adaptability and flexibility. 16. Organisational culture Culture in an organization is a rather complex aspect that collectively defines the organizational environment. Positive and strong relationships between and among employees and leaders continuously evolve in organizations, being reinforced by common focus on occupational and personal competence resulting to adherence to organizational culture by employees. This facet initiates platform for reciprocity among employees in partnership with leaders through ownership sharing of and commitment to the organisational mission, vision, and goals. The most probable outcome is improvement in organizational competence, loyalty and worker satisfaction, thus improved delivery of quality services far beyond the expectations of customer's. 17. Competitive advantage As discussed earlier, leadership quality positively alters issues in a company such as culture or environment, resources and Processes which largely reflects to nature of interventions strategies which model core competitive advantages for the organization. This are achieved through integration of the core competencies across the organization. 18. Porter’s Four Generic Business Strategies The attractiveness of an organization is the primary determinant its profitability within the industry it operates. Similarly, an important secondary determinant is its industry position. Optimally positioning results to superior returns and it does not matter about the industry profitability scale. Leveraging of a firm’s strengths is what defines its position within the sector. However, Michael Porter argued that strengths of a firm can be divided into two headings; differentiation and cost advantage. Application of the two strengths results to either narrow or broad company scope, as defined by the following three generic strategies; differentiation, cost leadership, and focus. The strategies are commonly applicable in business at the unit level and are known as generic strategies since they are not industry or company dependent as shown (see figure 1) Figure 2 Illustration of Porter's Generic strategies 19. Knowledge and competitive advantage Delivery of correct information to the right people at the correct time in order to facilitate correct actions is what is known as knowledge management. Knowledge in an organization is defined by level of innovations. The sequence defining this cycle is data, information, knowledge, innovation consecutively. Therefore to have a competitive advantage, a firm adopts innovation or differentiation strategies in its service or product design to built unique attributes that will have greater appeal to customers in terms of value or perception compared to those of competitors. The addition of value through uniqueness or differentiation allows the company to charge a premium price. The higher price is intended to cover for extra costs incurred in the process. Subsequently, unique attributes of the product or service prompts suppliers to increase their prices thus the firm passes the costs along to its customers due to lack of substitute products availability. Success of firms adopting such strategies invests greatly in 1. Creative and highly skilled product development team, 2 Access to leading scientific research, 3. Corporate reputation for quality and innovation, and 4 Strong sales team with the ability to successfully communicate the perceived strengths of the product. However, there exists risks associated product differentiation strategy such as changes in customer tastes and competitors limitations. 20. Communicating Strategy Those who implement strategic plans must understand the concept properly otherwise the strategy will fail. Building relationships via communication strategies must consider culture and language constraints. It recognizes a close relationship between society and business practice and treats this communication as equal to other management strategies. This concept comes in two phases: There is the initiation and sustaining phases that is interpersonal level at the start of a business and the impersonal level to maintain public confidence. To succeed in whichever management, the strategic adopted by a team efficient communication strategy is an important requirement. The success is not in communication strategy itself but how companies utilize their business communication strategies that give them an edge. When formulating or adopting other business management strategies by communication strategy should be given equal consideration. Professionals and the academic world strongly advise that it should be the first item on the agenda when it comes to business strategies. When developing a communication strategy look at the over all picture. A consideration of vision or mission statement should be done during formulation with set objectives. The company should recognize that communication strategies are not static. They are bound to change with time and needed adjustments done accordingly. Measuring results against objectives will help the company understand what needs to be done at any time. Use feed back mechanism to evaluate performance and make needed adjustments. The second phase is to understand chosen Communication Channels. Identify any shortcomings in the available channels, for instance very large files will take ages to open if your organization is accessing internet through dial-up connection. All communication should use appropriate channel, for instance use Video conferencing large strategic requirement while and office memo can circulate any changes in policy. Depending on communication needs multiple channels could be sourced to handle different functions. You are now at the third phase; suitable Packaging Technique. The communication strategy should be in the language understood by the end-user. This will be useful in executing the strategy. Resistance by the employees to the strategy will be minimal for they will appreciate the management’s efforts. Effective communication tool will foster desired cooperate and image. Acceptance of the strategy by the employees is fundamental to morale. They are proud of each communication and feel part and parcel of the entire process. However, some organizations fail to appreciate the part played by end-users considering them the weak link in the communication chain. This attitude only weakens the resolve since it does not offer challenge or opportunity for improving skills. Low performers should not be left out. They should be trained and challenged to do better. 21. Competitive Intelligence Competitive intelligence in an organization is characterized by certain basic features like benchmarking and market research. However, batter competitive intelligence extends beyond simple research through attempts to provide solutions to specific critical issues that could negatively impact on organization performance. Therefore, competitive intelligence is not far different from strategic management. Though it is basically limited on market competition such as 1 capability of one competitor to excel and capture a large market share, 2 Identification of competitor’s new products launches, development level, and successes, 3 finding core competencies of competitor specific competitors, and 4 how the firm can respond to competition through various formulations such as business acquisition, re-location, or establishment of brand marketing to increase presence. 22. Kotter’s Model The concept of how to manage change is discussed in John Kotter's esteemed books 'Leading Change' (1995) and 'The Heart of Change' (2002). The phases conform to a principle discussed by Kotter regarding how people relate to change; the ability to sense, see and accept. We can sum-up Kotter’s change model in eight steps: a) Create a sense of urgency – make people realize they must have real and appropriate objectives. b) Put together the leading lineup – select a team with correct combination of skills and committed to the success of the enterprise. b) Formulate appropriate vision – allow the selected group to formulate a straightforward strategy and vision statement. The aim is to harness emotional and other skills needed to effectively deliver service. C) Communicate for buy-in - Engage all and sundry. Use language that is simple and easy to understand. Avoid formality. Technology should be is a slave and not the master.d) Empower action – deal with distractions and obstacles that impede progress. Let the leading team give support at the same time give commendation for work well done. e) Create short-term wins - establish intermediate, short-term goals and then help the employees to achieve them. Do not move to another goal before accomplishing the present one. f) Don't let up - remind them why they need to be enthusiastic, show them how to improve at their own level. Encourage them by highlighting their part in what has been achieved so far and what still ahead. g) Make change stick – Through promotion, new change leaders and recruitment strengthen acceptance of change. Integrate change in company. 23. The human approach to change People need any drastic change communicated to time in time. This may include re-locations, policies, new structures, targets, disposals, acquisitions, etc. This timely communication will foster validating and acceptance of the new systems and environments. For example, people have difficulty accepting change of understanding new ideas in place of their age-old traditions. Therefore, it is important to candidly inform the people early of coming changes. New methods, ideas, policies, approaches, systems etc can be effectively handled in workshops. To deal with negative feelings among staff it may be appropriate to conduct staff surveys. Let them express themselves privately and then to instill confidence the finding should be acted upon Managers should be empowered by continuous training in order to improve ability as trainers and facilitators. Managers are the agents of the change process and are not merely task masters issuing orders from above. Change cannot be forced on people – managers, leaders and executives need to allow room for individual growth. This should be done in a spirit of compassion and tolerance and offering needed support. The conduct of the management and their leadership style is of greater importance that any formal policy. It is the good attitude that creates trust of the employees. It is possible to loss very good workers if change is not well managed according to these outlined ideas. 24. Satir’s model It is impossible for inspiration to occur in a vacuum. However excellent ideas bud from other excellent ideas and propagated in to even more excellent ideas. Hence, there is always a lower rank or chaotic condition which can the be transformed into excellent situations. However, transformation can only occur if control or limiting factors are “let’s go” paving way for invention of new “things” which in business are service or products from internal manifestation individual or organisational conscious reality assemblage. Subsequently, the conscious assemblage can be released, or “let it go”, to attain intended outcome in the chain. This robust model is built from Virginia Satir Change Model which draws focus systems of people or individuals. Thus systems or people may react to chaos in various different ways for example through random behavior engagement, stability seeking at any cost, attempts to revert to initial behavior pattern, seeking means, sweeping silver bullet solutions, anything, that will re-establish semblance of normalcy (see figure 3). Figure 2 Satir's Change model This can be described in the following stages: Stage 1 Late status quo which describes a system that is fairly stable in which the occurrences are familiar, predictable, and comfortable. Stage 2 defines introduction of a disturbance or foreign element. This can be either internally generated or inspired due to desire to improve. Odds are that the unexpected, unwanted, or mandated change within the system or organization or people may try various strategies to neutralize effects of the alien element. Alternatively, system/people may expel or reject the foreign element, ignore it, apply delaying tactics, or encapsulate the foreign element to assume “normal” avenues of solving things, or attempt to find a scapegoat to attack and blame. Stage 3 results to Chaos if the introduced foreign element or those backing it sufficiently instill power or persistent to initiate critical mass of discomfort, resulting to chaotic organization, Stage 4 Transforming Idea, this is an out-of-the-box transforming idea that alters a system out of chaos occasionally just for a short while through sudden awareness, inspiration, or understanding of new possibilities. Stage 5 this is the integration stage, when the system enters practical or integration, beginning to establish new possibilities. At this stage in firms’ people is able to learn and apply new work or tool as per the new tasks or process within a new structure. This stage is usually marked by reduction in productivity, and outcomes are unpredictable. Stage 6 the New Status Quo, this is when benefits from the new system start being realized after integration. Later resulting to a new status quo where the idea becomes a normal state of affairs. 25. The Kubler-Ross model People have been known to undergo the five stages of grief model anger, bargaining denial, depression and acceptance in circumstances that do not involve death. In fact, it is noted that the trauma of being forcibly relocated, laid off or punished, financial woes and bankruptcy, disability and injury, divorce, is similar to the trauma associated with the death. Though initially designed to help grieving people come to terms with the situation, Kübler-Ross's five stages of grief model has been adapted in other situations that need similar insight and understanding in order to adjust to changed circumstances regardless of source of trauma. The success of this concept has made the writers ideas gain popularity and acceptance among peers. Just as Maslow is widely known for his motivational theory; Elisabeth Kübler-Ross’ theory on grief has become the standard textbook favored by counselors and others involved in emotional trauma management. Others who occupy the same hall of fame are Gardner with his multiple intelligence theory and Kolb with his concept on learning styles (see Table 2). Five stages of grief - Elisabeth Kübler-Ross EKR stage Interpretation 1 - Anger At times we can control our reaction when confronted by anger from a grieving person if we understand what is happening to them. This is because the grief stricken can be angry with themselves and those around them. l upset can be angry with themselves, and/or with others, especially those close to them. 2 - Denial For some the loss is difficult to accept. Denial is a mental process that simply denies existence of facts and occurrence. It cushions the person from the stark reality. Sometimes the traumatic situations can safely be ignored and disappear with time. However, some stressful situations like death cannot wish away. 3 - Depression This stage is reached when the finality of the situation begin to sink in. Although depression may hold different things to different people it is however, an emotional way of coping with natural feelings of regret, sadness, uncertainty and, fear, , etc. 4 - Bargaining When confronted with traumatic challenge people traditionally bargain with their God/s for reversal of circumstances. The same occurs when faced with divorce or break-up. One of the party will try to bargain for a resumption of the relationship even if of a lesser nature. This reaction does not work well especially when someone has lost a loved one in death. 5 - Acceptance When someone has finally come to terms with the unpleasant situation he becomes resigned to it. A patient on the death bed may reach this stage earlier than his family members, who maybe on other stages of grief such denial. However, how this stage is handled differs from one individual to another. References Barwise, P. & Meehan, S. (2004). Simply Better, Harvard Business School Press, Boston. Porter, M. E. (n.d). Competitive Strategy: Techniques for Analyzing Industries and Competitors Hambrick, D. & Fredrickson, J. (2001). ‘Are You Sure You Have a Strategy?’ Academy of Management Executive, 35 (4): pp. 48-60. Henczel, S. (2001). The Information Audit: A Practical Guide. Munchen, Saur. Kaplan, R.S. & Norton, D.P. (2001). ‘Building a Strategy Focused Organisation,’ Ivey Business Journal, (May-June): 12-19. Kim, E., Nam, D. & Stimpert, J.L. (2004). The applicability of Porter's generic strategies in the digital age: Assumptions, conjectures, and suggestions, Journal of Management, 30(5):569-589. Lucier, C. E. & Torsilieri, J. D. 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