Strategic Planning and Control - Assignment Example

Reflective Learning Log BY YOU YOUR SCHOOL INFO HERE HERE YOUR TABLE OF CONTENTS HERE Learning Log The teacher told us to start play a game named CESIM on the Internet in the second week. The teacher required four students as a team was equivalent to one corporation. In the CESIM, USA, Asia and Europe are the three areas and what we need to do is to operate the corporation well and win the competition. However, I had never used the CESIM before and I think it was too difficult for me to operate it. Therefore I asked teacher for help. Fortunately, the teacher explained to me carefully. She said if your company want to win you should know how to control your company’s production at first. Secondly, you need to realise how to purchases technology and design license. Finally, you must understand how to compare the results between our team and other teams, how to post the final decisions to the CESIM as well. After listening to the teachers explanations, I began to find a way to use CESIM. At the same time, I started to write down some notes about the steps to use the CESIM. After this lecture, I had a preliminary understanding on CESIM. I had a simple plan about how I should do in the first round in the game as well. Combined with the teacher said and I learned before, I thought the most important thing were to increase the production and adjusted the price to the appropriate areas. Although this game is virtual，on the one hand, it helped to practice our skills to use a suitable strategy and control our company. On the other hand, let us know much more about the accounting knowledge, for example we had known the relationship between the demand and supply through the game. Learning Log #2 The teacher explored growth strategies for businesses, focusing on what a business can do when a market has reached the maturity stage, in order to stay competitive. I learned about the different models that can be used in order to understand what factors would pose risks or opportunities for a business operating in a mature market. At first, the teacher proposed the TOWS Matrix which seemed to be a very simplistic method of examining the firm’s position. I assumed that a competent strategic manager would already understand the firm’s basic competencies and infrastructure without having to conduct such an analysis. However, to build better acceptance of this model, I tried applying it to a real-world organisation, Sony, which was struggling against competition in such a market. Through building a thorough TOWS Matrix for this company, I discovered some issues that I would not have originally considered. I conducted small-scale marketing research on Sony’s market and found that the firm’s main strength is a very recognised global brand. Its main weakness was a centralised, top-down culture built on strict Japanese values. The firm’s largest threat was competitive rivalry. I discovered that the business had posted massive financial losses in 2011 and 2012. What I learned was the ability to apply a theoretical model to a real-world situation, which forces a different type of thinking. I would have originally thought Sony should seek a market penetration strategy to try to win customers from competition. However, the TOWS provided a foundation to recognise more viable opportunities founded on strengths and threats. For example, market research found that Sony would be best to reposition its existing products for new markets, with an emphasis on new promotional strategies. The company needs to change its positioning from quality focus to focus on the end user to build lifestyle connections. Learning Statement I have learned that strategic analysis is critical to understand evolving market conditions in order to build an internal business model capable of achieving competitive advantages. The internal characteristics of a firm must be aligned with evolving external market conditions in order for a business to find success in strategic management. Business literature often reinforces that customers are the most important constituent for a business. For example, a respected model of strategy, the Five Forces Model, asserts that buyer power in a market is a significant risk to a business. Under this model, buyer power consists of the ability of buyers to force price reductions on products produced by a business (Thompson, Gamble and Strickland 2005; Porter 1987). For a business that operates in a very saturated competitive market where there are many sellers and limited buyer segments, buyer power is high. It reduces the switching costs for selecting competitors and customers could defect to competing products that offer a lower price without having to pay opportunity costs for this decision. High buyer power would have many implications for a business at the internal level. For example, the company may have to invest more resources into the customer service function along the value chain to better satisfy consumers and retain their business. Market analysis might also uncover that the firm must align itself to build a cost leadership strategy, using better cost management systems and lean production strategies so as to prevent the firm from raising prices on its products. Whilst theory might seem to show the importance of internal structure as a means of competitive advantage, I have learned that it is the external market conditions that dictate how a firm operates internally. Therefore, what I learned was the effectiveness and importance of conducting market research and using different theoretical models, such as the TOWS Matrix and Porter’s Five Forces, to determine how a business can respond in order to remain competitive. In the CESIM business simulation, the opportunity to look at costs of production, marketing, financing and demand ratios gave me knowledge of how budgeting is directly related to the external market conditions. This simulation showed how internal operations must be adjusted in the face of fluctuating market conditions in order to ensure that all aspects of the value chain are aligned with providing customers perceived value. A fundamental learning that I gained through the module was the importance of the cost-benefit analysis when considering budgeting in order to determine whether long-term gains for a new strategy or internal restructuring will be worth the investment to restructure the firm’s operations to better suit market demands and expectations. This learning also created better soft skills, especially in terms of teamwork, communication and conflict management. During group-working sessions, the group each brainstormed different ideas and concepts that could enhance a business’ competitive position. I did not, in all instances, agree with the different team member ideas and strategies which created a type of emotional resistance where I would not listen to future suggestions. As a result, the group ran behind on deadlines for achieving a task and many team members wanted to work independently rather than have disputes about strategic direction. Stover (2004) maintains that in order to come up with innovative solutions at a business, effective interaction with others is absolutely critical. Self-reflection taught me that I have a high level of self-efficacy, faith in my ability to achieve goals and find solutions to problems independently. By working with group members and forced to communicate ideas to achieve a task, I learned how to break down this strong faith in my own competencies and be more flexible to listening to ideas. I believe that in the future, as a business manager, critical self-examination of my over-confidence in my own talents and knowledge will facilitate a more team-focused organisation that can be innovative and respond more rapidly to external market conditions with new strategies. Group working that got behind on deadlines for the task associated with conflict and poor communication was a product of my own stubbornness and self-esteem. However, I learned that in a real-world business environment that relies on change, this trait could be a large problem. Therefore, it was through being forced to come up with new strategic options in a group context that I was able to consider how to be adaptable and accommodating toward others’ ideas. Business literature constantly states that if employees are controlled and decision-making is not shared horizontally, it will reduce their commitment and motivation, which will impact a firm’s ability to create productive outputs and lose important talents with high turnover rates (Proctor 2014; Madjar, Oldham and Pratt 2002). In a business, I will rely on employee ideas and talents and, through this module, I learned about emotional intelligence. I have also learned that a firm’s internal competencies are critical to develop growth strategies, gaining competitive advantage and aligning a firm to achieve overall market success. Chwolka and Raith (2011) states that many businesses fail as a result of management not having a full understanding of problems with their current business models. Deming (2002) also states that failure of an organisation is directly related to management with 85 percent of all statistical variations directly caused by management incompetency. How does this related to my learning? A major competency of an internal manager is to be able to evaluate and synthesise information related to production statistics, financial data and performance data to come up with internal strategies that will better respond to problems. This course taught me a great deal of information about how to be a more effective manager that understands quantitative investigations of important statistical information in order to better structure operations and other value-chain related activities to correct problems. For instance, the CESIM simulation forced me to examine the relationships between budget, finance and operations with a focus on scientific methods to correct structural flaws in the business model. I had not, prior to the course, been very competent in making analyses of mathematical information. In fact, I had always disliked this process of statistical examination. The course, however, gave such models as the TOWS Matrix and discussed the importance of quality to achieve market success. True firm weaknesses, I have learned, are not just present in a firm in terms of qualitative problems (such as human motivation or customer service), but can be found statistically in productivity, operational processes and in resource allocations. The CESIM simulation software built some very valuable skills related to statistical investigation and how to align these findings with internal restructuring to control costs and improve output quality and productivity. As a future manager, I believe that new insights into how to synthesise numerical information and statistical charts will be highly critical to strategic success for the organisation. Management competency is being able to read financial accounting and other statistical information will clearly determine whether a firm achieves competitive advantages. I also recognise that many firms are publicly traded and must illustrate to shareholders that the firm is maximising resources and revenues. This is often expressed in annual reports and other quarterly financial releases. This course forced me to examine various organisational reports and construct professional written information in a capacity I had previously been unfamiliar with. The educator demanded professionalism in our written work and applied these criticisms to real-world environments in order for the student to consider what stakeholders in the firm will expect from competent management. I now have a practical understanding of what constitutes effective report-writing in a professional context, including structure, language, and obedience to industry presentation standards. As a future manager, I will be required to produce such reports and this course was valuable in providing a foundation for these skills. This is an internal competency that will be demanded in an organisation where communication with external stakeholders and shareholders is an obligation. The course also provided me with strategic analyses competencies, especially as it relates to fully understanding external economic conditions. The PESTLE model and the Five Forces Model provided a foundation for understanding the inter-relationship between micro and macro-level factors that will impact a business, pose opportunities, or become substantial risks. Through these macro and micro-level analyses, it gives a snapshot of what the business is facing that will determine the foundation for new strategy developments. For example, I learned that a business faces threats of substitutes, such as a television producer being concerned about mobile smartphones that provide programming content. Prior to the course, I would not have considered that substitute products could cause problems with revenue growth. Ansoff’s Matrix supported this, in an environment where substitute products might cause growth problems. Therefore, having knowledge that, as a future business manager, I could diversify to combat substitutes will be a very important competency. In such a situation, I could restructure to manufacturing mobile devices capable of programming delivery to offset substitute risks. It cannot be stressed enough that the course improved my managerial competency as a strategic leader. Time management was enhanced by being able to reconcile conflict (especially as it related to high self-efficacy) and work toward a better communications model. I came to realise, through experience in group working and in analysis of best practices studies in strategic management, that a strategic leader that does not use horizontal communications strategies will not provide an environment that is motivated and gain commitment as well as loyalty from important internal human capital. For any business, this would reduce creativity and, in an environment where many products have limited life cycles, this could seriously impact revenues on products that are reaching a decline stage. These teachings show that internal competencies, especially at the management level, are directly related to organisational success or failure. Through analysis of important statistics, working in collaborative groups, dealing with conflict, and considering the importance of external market analysis, I am more equipped to be a competent strategic manager. I have learned that genuine effectiveness as a strategic manager involves multi-level learning in a dynamic business environment requiring change and organisational culture unity. References Chwolka, A. and Raith, M. (2011). The value of a business plan before start up: a decision theoretical perspective, Journal of Business Venturing, 27(3), pp.385-398. Deming, W.E. (2002). Chapter Six, in J. Beckford (ed.), Quality: an introduction. London: Routledge. Madjar, N., Oldham, G.R. and Pratt, M.G. (2002). There’s no place like home? The contribution of work and non-work sources of creativity support to employees’ creative performance, Academy of Management Journal, 45, pp.757-767. Porter, M. E. (1987), From competitive advantage to corporate strategy, Harvard Business Review, 65(3), pp. 43-59. Proctor, T. (2014). Creative problem solving for managers: developing skills for decision-making and innovation, 4th edn. Abingdon: Routledge. Stover, M. (2004): Making Tacit Knowledge explicit, in: Reference Services Review, 32 (2), 164-173. Thompson, A., Gamble, J. and Strickland, A. (2005). Strategy: winning in the marketplace, 2nd edn. McGraw Hill. Appendix A: TOWS Matrix Source: Manize, N. SWOT Analysis: how to reboot your life with the SWOT Matrix. [online] Available at: http://realswotanalysis.blogspot.com/2010/10/swot-analysis-how-to-reboot-your-life.html (accessed 22 December 2014). The TOWS Matrix identifies strengths, weaknesses, opportunities and threats that impact potential and existing business direction. It provides a framework for determining strategies that could impact strategy developments, such as capitalising on strengths to take advantage of opportunities. However, one must understand whether any weaknesses or threats could cause problems with exploiting opportunities. It has been fundamental for my understanding about what factors, internal and external, will determine strategic development. Appendix B: Ansoff Matrix Source: Research-Methodology.net. (2014). Ansoff Growth Matrix. [online] Available at: http://research-methodology.net/ansoff-growth-matrix/ (accessed 23 December 2014). This matrix gives distinct strategies that drive growth in a mature market. Market penetration is growth achieved through existing products for existing markets to increase market share. Market development is seeking new market opportunities using existing products. Product development is creating new products for existing markets for growth purposes. Diversification is offering new products in new markets. HERE ARE SOME IDEAS FOR YOUR APPENDICES Porter’s Five Forces Model Feedback from your group peers More discussion about CESIM simulation Pasted models from Total Quality Management – Can find them on Wikipedia, including Pareto Charts and Statistical Process Control. Your own personal reflections Read More