Strategy Formulation - Essay Example

?StilSim Personnel - Strategy Formulation Naif Al-Hajri Assignment 3 - 2 BSAD 495 - H2FF Section H2FF Roger Kisiel Franklin University April 08, 2011 Strategy Formulation Introduction Strategy formulation follows strategy management, during which it will be decided upon which strategy and actions should be undertaken in order to achieve the set objectives within the organization thusly fulfilling the purpose of said organization. The preparation of strategy formulation lies in the external and internal analyses, which are needed along with documentation of the assignment, objectives, visions and goals. The StilSim Company has founded several strategic opportunities that will be discussed. Firstly, the generic strategy is based upon the identification of methodology in which the company will be competitive within every strategic component of the market place. Aside from a generic strategy, StilSim could employ a corporate level strategy, also known as a grand strategy. This involves a structure of the organization and the supply chain system within the company. By using a corporate level strategy, the company can then decide which areas of the enterprise to pursue and identify its pros and cons. This also allows the company a better understanding of the competitiveness it has in the market. At a corporate level, strategy management is imperative for StilSim, as this is the key point of beginning for corporate financial planning strategies. Following are some options that are available to StilSim to allow them to create a generic strategy that will assist in increasing their market competitiveness: Differentiation. This will attract potential consumers through the differentiation of the offered products and services of StilSim versus its competitors, thus offering consumers clearer choices and gaining their confidence. Cost of Leadership. This will allow StilSim to access and lead the current market by the attraction of new customers due to the lower costs of the offered products and services. Focal Strategy. This will identify marketplace niches and allow it to gain control over it through the provision of unparalleled service and products therein. Beyond generic and corporate strategies, another possibility is a functional strategy. This defines the individual strategy currently being used in every function of the corporation, like product development and human resource strategies. They stem from the primary corporate stratagem in order for the business to achieve a competitive edge in the market place as well as create retail value. Strategy Scorecard A scorecard for strategy is a superior planning and managing arrangement used for the alignment of the corporate activities to the vision and other strategies of the company. This will allow for improvement on external and internal communication and provide the supervision of the companies’ performances versus its strategic objectives. Strategy scorecards focus on learning, growth, business process, finance and customer base. Through the use of a personalized scorecard, StilSim can determine their performance levels and make the necessary improvements. Address of Issues Given that the StilSim Corporation has a plethora of issues that need to be addressed, use of a strategy scorecard would be very beneficial. They can further address the issues of internal, external and rational analyses within the company’s structure. This is aimed at the Capital City office, which is operating at a loss of revenue. This is a disadvantage for StilSim in its competitiveness, and therefore StilSim needs to provide its customers higher value through differentiation and cost leadership in the group. It is also recommended that they improve upon their methodology and structure, i.e., marketing, image and interface. StilSim can increase its efficiency through improved communications throughout the organization as a whole, and ultimately creating a human resources department within the company’s corporate structure. Objectives and Goals It is imperative that StilSim’s senior advisors determine the primary objectives of their company, which should be to maximize profits while ensuring the survival and growth of the company in its future endeavors. For its future intents, they would be well served through the use of low cost objectives with the use of goals that will decide other factors within the company, and those achievements. In order to do this, they would be wise to impart a low cost strategy that includes: Stabilize Pricing Sharing in the Market Penetrating the Market Skimming the Market Revenue Promoting of Product Profit Maximization Rates of Return Targets Strategy for Survival Recommendations It would be in StilSim’s best interests to implement a low cost provider strategy to ensure their success. Through this, they will be able to increase their competitiveness within the market, increase that market share and further stimulate demand for their products and services. Of the strategies provided, I believe that StilSim should employ a low cost strategy. This will enable to company to survive long term and deal with its decrease in profits and increase in expenses. This is the key strategy that StilSim should use if they want to continue in their business ventures, allowing its survival and success. They need to go back to the strategies set forth earlier in this report, using the strategic formula to undertake each of the new objectives that the organization has set forth to best fulfill their purpose and obligation. The company needs to be more prepared through the use of analyses and more accurately and fervently implement their mission, vision, objectives and goals for growth and prosperity. Once StilSim has identified these strategies, they will be able to further grow in the market, thus creating a larger more reliable customer base. StilSim needs to hire a strategic management team to penetrate the market through the attraction of customers through their lower cost and higher quality of products and services offered by them. Also, through differentiating their product line and services, they will be able to take customers from their competition, rendering their competition less worrisome. This will also allow them to give their clientele a clearer idea of what StilSim can offer to them, thus gaining their preference and giving the customers more of a feeling of importance to StilSim. Once StilSim has done this for its customer base, they need to create a new and improved niche market within the company in order to gain control of it. They can do this by providing a higher level of service and products within that niche market, increasing the customer base even more. Although this sounds complex, if StilSim were to create these strategies and use them, they would also be able to extend themselves into the supply chain part of the company to improve their business levels and use it to identify the problems within the company that has plagued them from the start. This will also improve their competitiveness, which is a crucial point for any company that wants to grow and maintain itself in a highly competitive field. Once StilSim has done all of these things, they will see an improvement in their sales, customer base, standing in the marketplace and value as a company. It StilSim will follow these recommendations, although it will take time and be difficult to attain some of them, they will be able to improve every level of the company from the ground up. They can take these strategies and use them to gain the competitive edge that they desperately need in a highly competitive marketplace, improve their products and gain a higher level of status overall. References Abrams, David, Ron Baecker, and Mark Chignell (1998). "Information Archiving with Bookmarks: Personal Web Space Construction and Organization," in Human Factors in Computing Systems. Los Angeles: ACM CHI SIG. Dess, G. G., Lumpkin, G.T., & Eisner, A. B. (2010). Strategic management: Creating Competitive Advantage. (5th). New York, N.Y Gummerus, Johanna, Veronica Liljander, Minna Pura, and Allard van Riel (2004). "Customer Loyalty to Content-Based Web Sites: The Case of an Online Health-Care Service," Journal of Services Marketing, 18 (3), 175-86. Read More