Business Strategy Planning for Competitive Success - Essay Example

Business: Assessment Author’s name Institutional affiliation Business: assessment Introduction Business strategy is vital to any corporation because it enables an organization to achieve its fundamental objectives and goals. In simple terms, it shows organization directions to achieve their objectives and more so without a proper business strategy, it becomes very difficult to compete with other organizations in the market. Establishing an organization's strategy is one of the most important prerequisites of management. However, having a business strategy is no guarantee for success. By this, it means that, many corporations face tough situations that are beyond their responsibility. Therefore, activities and performance of an organization depend entirely on either external or internal factors. It is this reason that makes business strategy a key element of management otherwise the organization is more likely to lose momentum. Business strategy enlightens the business management. Therefore, business structure helps to establish a structure that gives an organization a competitive edge (Bryson, 2011). Strategic planning process terminologies Strategic planning Strategic planning is a business strategy that determines the company’s framework, resource allocation and directions that enable it achieve its desired objectives. Additionally, in order to establish the organization's direction, it is important to study and evaluate the current situation of an organization and the future of the organization as well (Holston, 2011). Therefore, it is very vital to assess the components of strategic planning without which strategic planning process will be incomplete. Mission By definition, it is the primary fundamental aim of an organization. Additionally, it describes the reasons why the company exists in the first place and its primary focus in attaining its vision (Holston, 2011). Furthermore, a proper stipulated mission statement motivates the workers to work as a team towards the organization's vision. However, a mission statement must be formulated in line with the organization’s operations. Vision A vision is universally acknowledged as an outline of an organization that shows what and where it pictures itself in the future within a particular time frame. Normally, they are formulated basing on the organization’s long-term objectives and goals, as well as future operations. Owing to the long-term objectives, a visionary statement is very inspirational in any organization (Holston, 2011). Goals By definition, the goal is believed to be something that human beings crave for, it is a specific target or rather an end result. Additionally, it is the primary step towards target achievement of any organization. Therefore, a goal is a target and to some extent; it is the actual contextual planning prior to target achievement (Holston, 2011). Objectives It is a clear fact that most individuals tend to confuse objectives and goals by generalizing them as equal when in real sense they are different. By definition, an objective is characteristic that measures the progress that is indeed required by an organization so as to reach a particular goal whereas a goal encompasses the details of the end result. In other words, the objective is the procedure that is required to achieve goals (Holston, 2011). Core competencies It is an important success factor of organization. In other words, they give an act of competitiveness over other competitors. Additionally, a company may only penetrate the market with ease if they have a well-stipulated competitiveness. For example, the core competencies of an insurance organization are claim processing, customer service, customer acquisitions underwriting. Therefore, core competencies are a very necessary attribute in achieving organizational success due to its role in a cross-sectional process of a business (Sekhar, (n.d.). Factors that are considered when formulating a strategic plan As stated earlier, strategic planning is a critical prerequisite towards achieving organization’s set goals and ambitions because it provides directions for achieving them. However, there are several issues and factors that must be strictly analyzed in terms of time and their value to the organization. Additionally, the management of an organization may find it hard to choose the most appropriate issues as far as priorities are concerned due to disagreements in decision making among management members. In simple terms, in case of incongruities about issues and priorities, then the possibility of shifting to the company’s vision and targets is high (Sekhar, (n.d.).. But in case of disagreement, it is critical that they identify critical options and critical issues. Critical options can be identified in the following ways: The first is that the board and staff members can scrutinize both external and internal environment and chose the issues that are deemed strategic and affect the organization greatly. Additionally, the management should prioritize the issues in terms of importance, negative or positive effects and so on. Furthermore, these issues may comprise of a vast collection of other issues such as the future demands, future customers, and the location of future operations of the organization and with whom will the organization collaborate with. Another way of solving the difference in opinion between management is establishing a planning group which will scan and scrutinize the company’s environment and determine the issues surrounding the organization and then prioritize them according to feasibility, importance and timing. Additionally, there will exist some strategic issues during the planning process. The set of strategic issues that will appear first will be given the priority. Therefore, the committee board members will analyze and evaluate their strategic planning process depending on the priorities (Business insider ,2015). Effectiveness of planning techniques There are different planning techniques. The first planning technique is the SWOT analysis technique that analyzes the strength, opportunities, weaknesses and threats of an organization. The second technique is the PEST analysis that is employed to analyze the political, technological, socio-cultural issues and economic issues. The STEER analysis is the third techniques that are used to analyze technological, socio-cultural, ecological, economic and regulatory factors (Sekhar, n.d.). Another technique that is employed in strategic planning is the EPISTLE, which analyzes political, environment, informatics, and technological, social, economic and legal issues. Therefore, all of the above techniques are important in analyzing and identifying vital strategic planning issues. For successful strategic implementation, a leader is necessary to transform the vision of the organization among the workers successfully and sustainability. He must possess the ability to manage changes that occur in an organization (Barksdale & Lund 2006).A leader can be evaluated using a pyramid system. A pyramid system is important because; it enables the management team to identify what they want to accomplish and establish a more specific vision which motivates other workers. Additionally, It helps the leader to understand organization’s stakeholders and foster regular communication with them. Furthermore, a Pyramid system helps the leader to manage various forms of support and decline those facts which go against the change system. A pyramid system functions as shown below - Subway organizational audit Subway is a renowned food franchise globally and within the previous two years they have overtaken McDonalds. Additionally, their profitability levels are not as high as McDonalds due to the limited number of outlets. Furthermore, Subway possesses a rich base of customers who are permanent and loyal (Barksdale & Lund 2006). Initially, the subway was operating in USA alone but it expanded all over to European countries and now they are a global industry. Moreover, it is a better place to have organic foods that are getting famous each and every day Subway boasts of a unique and large brand name among its consumers due to its unique foods, availability, and quality of service. Their current supply chain, internal conditions, financial status, economic and their overall operation is particular of high quality. Additionally, they are governed by their vision of providing better and high-quality food products to all its consumers. Furthermore, they invest highly in product development. Subway ensures high food quality globally, and it may be differentiated depending on the culture, origin and the place. Over 70% of its outlets are franchised by the previous consumers of Subway. They become enticed by the food and goes ahead to establish outlets (Business insider ,2015). By so saying, it means that, its workers have a good working relationship with their supervisors who are in turn relating well with the overall monitoring authority. The executive owners of Subway organization offer training to managers regularly and if there are any alterations in missions and vision, all the branches are made aware immediately and provide ample support where necessary. In summary, All the outlets managers spread the objectives and goals among their workers and all the employees are encouraged to corporate so as to attain the goals of the organization and as a result, the Subway corporation is still expanding at intensive rates (Business insider ,2015). Environmental Audit for Subway Subway uses PESTLE analysis to analyze and evaluate its environment .PEST analysis deals with the political, environment, informatics, and technological, social, economic and legal issues. In simple terms, Subways operation is affected by external factors like political and legal factors that affected Subway currently. Some of the political and legal factors affecting Subway include; Health and safety act postulated by the government about modified food and animal rights campaigns postulated by social organizations, hamper the day to day operation of Subway. Nevertheless, apart from these hindrances, Subways enjoys a number of Economic advantages (Kerzner, 2001). For instance, it does not need a lot of money to establish an outlet and it is a win-win situation kind of business because the franchisees and franchisors can share branding image and reputation for expansion of the business. Subway also possesses high competitiveness such as expanding the market for a sandwich, perceived quality, and good supply chain and brand loyalty from its consumers (Business insider, 2015). Subway also benefit from the Social factors in the environment. To explain further, as a result of the intensive nature of individual work, they depend highly on fast foods that serve as a direct opportunity for Subway as an organization. Additionally, Subway food products have low-fat content, high-quality food products that are good for health, and they also provide multiple vegetarian products (Business insider, 2015). Owing to food products, current research has postulated that, many individuals prefer salads and sandwiches to high-fat foods. By so saying, it means that, many individuals are cultivating a culture of healthy practices and as a result they prefer low-fat foods. In terms of technological factors, Subway has a great future perspective. By so saying it means that they are spending highly in food products development as well as reducing the contamination of food. Additionally, due to the environmental pollution that is witnessed every day, it is challenging to provide fresh food products to its consumers. In the future, the environmental organizations will restrict the killings of animals and fish that will be an enormous challenge to subway organization (Business insider, 2015). Therefore, Subway needs to invent a fresher way of providing fresh food products to its consumers. Significance of stakeholder analysis in strategic planning Stakeholder analysis embeds the attitude and zeal of stakeholders toward the organizations goals and objectives. Additionally, stakeholder can be performed once yearly or on a regular basis. Stakeholders are classified as; Primary stakeholders who are affected directly by the actions of the organization. The second classification is the secondary stakeholders that are intermediates, and the actions of the organization affect them indirectly. Key stakeholders have intensive influence and eloquent importance to the organization. Additionally, the main reason behind stakeholder analysis is to establish closer cooperation between the stakeholders and the project team. Possible alternatives planning strategies associated with limited growth, substantive growth or retrenchment. Limited growth Some of the key alternatives to limited growth are as follows; the first is market penetration that is done either accidentally or deliberately either to establish a market share or a consolidation form to protect the consumer base (Kerzner,2001). Market development is another alternative; it entails setting up new shares of opportunities with different consumers in international markets. Substantive growth Vertical integration is the first alternative to substantive growth. It involves linking up with another organization in the same line of business. Related diversification which means that; transferring into a location that possess similar technology and marketing strategies is another alternative (Kerzner, 2001). Retrenchment An alternative to retrenchment is starting with ideas and opinions of consolidating either lined to refer to de investment of non-core values of the business or as a turnaround basis for an organization experiencing hardships. Additionally, this is achieved through mergers and takeovers, organic growth and acquisition (Kerzner, 2001). Future strategy for Subway The main objectives that are governing subway are maintaining a strong and positive growth each quarter and hence achieving a steady improvement in market penetration. Additionally, it possesses ample data and information about the product market and understands the characteristics of the most profitable customer. Owing to this information, it enables the management to evaluate and understand the consumer’s specific needs, how they are served and how the company can communicate regularly with them. To grow their market, Subway employs positioning and targeting strategies and marketing segmentation (Kerzner, 2001). Therefore, in order to succeed, it is recommended that they continue establishing their brand based on freshness platform. Furthermore, they should improve and establish more partnerships with other organizations so as to solve the challenges relating to the environment and supply chains. Moreover, communicating their positioning through advertisements will help establish make Subway chain part and parcel of customers consideration set. Another strategy in addition to that is that, using the in-school curriculum to position and establish kid’s meals by instilling proper habits of eating as well as fitness levels. Roles and responsibilities of strategic implementation personnel A company’s success in implementing a strategy depends on the human resource issue in the strategy. Additionally, strategic implementers realize that human resource comprises of two sections. The first is that, Human Resource consideration needs management to think critically about the communication needs of an organization. By so saying, it means that those responsible for a particular task must fully understand the task (Kerzner, 2001). The second is that, the managers should have ample knowledge about the consequences the new strategy will impact on their human resource. Therefore, the management has an ample task of determining whether to permit the time for employees to grow via experience, hire new workers or to introduce training. The required resources in implementing a new strategy for subway In order for the subway to implement their profit increase strategy as a result of changing technology, tastes and preferences and attitudes of the customers; they will require some resources. Additionally, resource allocation is a vital management attribute that makes it possible for executing a strategy. Owing to resources allocation, all corporations possess at least four forms of resources that are essential to achieving their objectives namely; financial resources, human resources, physical resources and technological resource (Holston, 2011). A number of resources hinder effective resource allocation, and they include; emphasis on short runs monetary criteria, overprotection of resources, politics in the organization and reluctance to face risks (Business insider ,2015). Nothing is more damaging to organizational success than and strategic management as compared to resources allocated inconsistently with major priorities established by approved yearly objectives. Additional, under the corporate stage, there is always lack of systematic thinking on allocation of resources because the executives always possess more work than they can manage (Holston, 2011). Swot analysis of subway Better and great choice of healthier meals, promotional and marketing strategies, great brand name and a better level of subs customization are some of the strengths of Subway franchise. Additionally, some of the weaknesses that Subway experience include; cheap look of the outlets interior design, high number of employees, services offered are not consistent as the number of stores increases and finally, there is overstepping by the franchises management (Holston, 2011).. Some of the opportunities Subway enjoys include; the growing demand for franchise foods, increasing demand of take-away foods and establishment of drive-thru. However, it experiences threats as well which includes; the ever changing tastes and trends towards the eating habits, growing number of domestic fast foods stores and growing number of lawsuits stipulated against subway. Contribution of SMART targets to strategy implementation achievement in subway As much as Subway boasts of a great brand name, its profit index is not as much as the net revenues of MacDonald’s. Therefore, they have stipulated a strategy giving more emphasize on long term objectives and goals then it will split them according to priority. However, the success factors of any organizations revolve around the short term targets and goals. By so saying it means that, if short-term targets are attained, long term will be arrived at automatically (Simerson, 2011). In the case of subway, for instance, they want to increase their consumer base around the world within a period of 10 years. The first thing subway has to so is to establish the market palace, potential market, and potential customers and it is then that they will demarcate their goals per year. Additional, in order to expand their business, they have to expand their customer base as well (Abraham, 2012). Moreover, they will have to scrutinize their customers on a regular basis so as to assess any changes in tastes and preferences. Therefore, dividing the organization down into manageable targets and timescales will permit the management to review and analyze the techniques and approaches that work better for their organization. Conclusion Therefore, business structure helps to establish a structure that gives an organization a competitive edge. Additionally, the achievements of any organization depend entirely on the strategic plan that has been put in place. Moreover, the commercial organization aims to grow and increase their net profits. Owing to net revenue increase, organizations should be able to employ proper strategic management tools to analyze and evaluate their internal and external environment. References ABRAHAM, S. C. (2012). Strategic planning: a practical guide for competitive success. London, Emerald Group Publ. BARKSDALE, S., & LUND, T. (2006). 10 steps to successful strategic planning. Alexandria, VA, ASTD Press. BRYSON, J. M. (2011). Strategic planning for public and nonprofit organizations a guide to strengthening and sustaining organizational achievement. San Francisco, CA, Jossey-Bass, a Wiley Imprint. http://site.ebrary.com/id/10483249. Business insider, (2015).Here is what it costs to open a Subway restaurant. Retrieved from : http://www.businessinsider.com/what-it-costs-to-open-a-subway-2015-3 HOLSTON, D. (2011). The strategic designer tools and techniques for managing the design process. Cincinnati, Ohio, HOW Books. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&A N=417800. KERZNER, H. (2001). Strategic Planning for Project Management Using a Project Management Maturity Model. New York, John Wiley & Sons. http://www.123library.org/book_details/?id=9127. SEKHAR, G. V. S. (n.d.). Business policy and strategic management. [S.l.], I K International Publi. SIMERSON, B. K. (2011). Strategic planning: a practical guide to strategy formulation and execution. 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