Strategic Management - Thomas Cook Group - Assignment Example

?STRATEGIC MANAGEMENT QUESTIONS QUESTION ONE Currently, the direction and scope of Thomas Cook Group is one that can be said to be based on product and service innovation. By this, reference is being made to the fact that the company has taken a new direction and scope of business projection that gives emphasis to creating new portfolio based on flexible and trusted products and services (Breiman et al, 2009). What is interesting about this direction and scope that Thomas Cook Group is taking is that the company is basing its intended product and service innovation on feasible feedback that it has gathered from customers based on organized survey. Clearly, this is a move and an initiative that carries so much prospect and hope for the development of competitive advantage over the medium term. It will be noted that competitive advantage is created when a company is able to make its products and services the preferred option for customers within a market where competitors are offering products and services of the same nature or kind (Carter, Daniel and Betty, 2006). For competitive advantage to be achieved, the need for a critical understanding and appreciation of what the customer wants is very important. This is because the customer is always the end user of the product and service that the company offers. With the immediate direction and scope where the company wants to prioritize the interest of customers in product and service innovation, there is every hope that competitive advantage will be created because the company will offer precisely what the customer wants from the hospitality and tourism industry that it is not getting from other competitors. QUESTION TWO The business approach to strategic management is selected as the most suitable framework for Thomas Cook Group to maximize its strategic impact with key stakeholders. This business approach to strategic management framework is however made up of a number of strategic options that makes it very important for the company to be highly critical in its selection of an appropriate strategic. Generally, two strategic approaches namely sociological approach and industrial organizational approach will be identified. Though each of these two approaches will at any point in time help a company in achieving some level of strategic success with its stakeholders, the use of industrial organizational approach is opined as the optimum strategy among the suitable framework that can bring about strategic development with stakeholders. The reason for this point is that in the use of industrial organizational approach, companies are admonished to take up the combined use economic theory and assumptions. Under economic theory, considerations are base for key economic factors such as resource allocation, competitive rivalry and economies of scale. Meanwhile, in the current global economic crunch, these economic factors are very important for the achievement of economic growth and development. This is because based on economic theory, the company will be offered the opportunity to naming its competitive rivalry and know how to rightly allocate its scarce resources in a manner that presents a better competition against the competitor. With reference to assumptions also, Thomas Cook Group will be allowed the use of rationality, profit maximization and self discipline principles to compete (Carter, Daniel and Betty, 2006). QUESTION THREE In the current state of global economic recession within which Thomas Cook Group is forced to compete and growth as a leader in the hospitality and tourism industry, the effective management of resources and competences would be the only remedy to ensure that the company survives the recession. This is because world economic crunch is generally associated with cut downs and limitations in resources and competences. This situation is created because the input into resource availability of companies hardly synchronize with the resource output that the company undertakes (Breiman et al, 2009). With the scarcity therefore, effective management becomes the only way out for the company. In the case of Thomas Cook Group, even though the recession has not created a situation whereby the company would be said to be on a critical verge of collapse, it will still be noted that the rate of growth has not increased at a rate comparable to previous years’ rates (Chen and So, 2002). In order to enhance its strategic options therefore, it is recommended that the company applies resource allocation as an important model of effective management of resources and competences. As far as strategic management is concerned, resource allocation may be seen as a plan devised for the use of limited resources in such a way that aids in the achievement of future goals (Icove, Karl and Vonstorch, 2005). To do this effectively, it is important to have a recognized business unit or project that a company wants to accomplish. In the case of Thomas Cook Group therefore, this project is the need to implement product and service innovation. Using resource allocation, the company will be privileged to using basic allocation decisions contingency mechanisms. QUESTION FOUR Clearly, it is one thing identifying a set of effective strategies and another thing implementing the identified strategies. In strategic management, emphasis has always been given to the implementation of strategic plans as the most effective way to achieve intended results (Icove, Karl and Vonstorch, 2005). In line with this, it is important that Thomas Cook Group will be highly proactive in the implementation of the strategy that has been identified for them. Earlier, the industrial organization approach as a business strategy to strategic management had been identified as an effective way of maximizing resources. In the implementation, it is admonished that the company makes use of what has become known as the Mintzberg's 5 Ps of Strategy. This is an implementation theory that identifies five major aspects of strategic management namely plan, ploy, pattern, position and perspective (Humphrey, 2001). As a matter of fact, what makes the Mintzberg’s 5Ps of strategy a recommended approach to implementing the industrial organizational approach is that it is highly participatory and can therefore help the company implement its strategy though the eyes of its key stakeholders. For example at the plan phase, inputs of key stakeholders can be collected by use of various methodologies such as survey. At the ploy phase, a plot could be made to influence the key stakeholders to buy into the strategy and to give their total support to it. When seen as a pattern, the strategy will be implemented by ensuring that it follows key history and culture of the company to ensure that a constant pattern is achieved. Position refers to the stage of implementation where the company will decide on how it wants to place itself on the global market and finally perspective touches on the inculcation of organizational culture into the proposed strategy. QUESTION 5 In the hospitality and tourism industry is found to be one of the fastest changing industries on the global economic landscape (Icove, Karl and Vonstorch, 2005). Interestingly though, the rate at which individual companies within the industry will be able to stick to their core organizational culture and organizational climate has been said to be very influential in determining the rate of success in a competitive environment. The common reason given to this is that companies that hold on to their organizational culture and organizational climate become better identified with their clients and stakeholders as against companies that readily change their organizational culture and organizational climate. But to maintain its organizational culture and climate, Thomas Cook Group must ensure that it stays coherent with its mission. This is because the organizational culture of the company is directly reflected in its mission and this mission gives the organization an identical external behavior. The question then would be how the company can ensure a coherent mission in an environment of changing business trend. With the nature of its business, it will be suggested that Thomas Cook Group ensures a coherent mission by using what has come to be known in strategic management as single customer gateway. Single customer gateway is a business strategic principle that ensures that a company offers personalized and consistent customer experience to its clients (Chen and So, 2002). The effect that this has on coherent mission is that, because product and services are offered based on a better personnel understanding of the specific needs of customers, what the customer experiences by way of mission is what the customer prescribes for. In effect, the mission will always be coherent with the aspirations of the customer. QUESTION 6 Strategic position has been explained in many different contexts and with different expositions when it comes to the area of strategic management. Generally, the diversity and differences in meanings and explanations idealizes the importance that strategic position holds in strategic management. Generally, the issue of strategic position may be explained with the question of where the company wants to be in the tourism and hospitality market. This is because the tourism and hospitality market has been identified to be one that is highly competitive. In most cases, there are the same numbers of customers within the same size of market, having the option to choose from an ever increasing service provider base. A situation like this, survival on the market becomes by the use of key marketing principles that are backed with corporate reasoning. But how can corporate reasoning take place if the company does not clearly identify and manage its strategic position? In line with this, it is said that Thomas Cook Group must clearly set out its strategic position in terms of the place it wants to take on the tourism and hospitality industry so that the way can be paved for creating competitive advantage for itself. The reason why an effective identification and management of strategic position will lead to the provision of competitive advantage in the medium term is that knowing ones place on the market makes it possible to know the exact kind of people one will be dealing with as customers. In effect, one can easily choose from a variety of marketing mix that brings about the creation of competitive advantage (Hissam and Daniel, 2009). QUESTION 7 Leading up to the next few years, there are several strategic options available for Thomas Cook Group to choose from and implement. Generally, strategic options are classified as anchors of growth that companies use in order to gain firm market competition against their key competitors. In the case of Thomas Cook Group, some of the strategic options available for the company include product/service, customer/market, technology, production capacity, and distribution. Looking at the competencies of growth attached to each of these five major strategic options, it will be suggested for the company to pursue customer/market strategic option. Generally, this strategic option entails targeting a specific customer as an anchor for growth (Humphrey, 2001). Generally, this strategic option is deemed as suitable for harsh economic times such as the global economic crunch currently being experience. Generally, such economic conditions result in a situation whereby customer demand for products and services go down. In effect, the best means to get a customer patronizing one’s products and services is by identifying the customer and approaching the customer. Waiting for customers to approach you in times like this will merely be a dream or fiasco. This is because the supply always exceeds demand and so the customer must be seen as a limited asset (Humphrey, 2001). With the customer/market strategic option, emanating from growth strategy matrix, the company will be forced to improve its marketing department so that accessibility to the customer can be better enhanced. It must be noted here and now that for effective results, the task of the marketing group must not be limited to merely finding the customer but also identifying the needs of the customer and providing them accordingly. QUESTION 8 The effective management of networks, agreements and alliances are very important models for achieving competitive advantage. Generally, the principle here is that it is in times of declined customer patronage that a company needs to build and create its competitive advantage most. This is so as customers become fewer than service providers in terms of rate of service demand. Hitherto, any attempt by the company to compete in such a market on an individualized basis would mean engaging in a management battle against a battalion of forces. To avoid this situation, the usage of network, agreements and alliances become so important so that the competitive force of the company will become strengthened. It has even been said that the use of networks and agreements gives companies better bargaining power when fixing prices for their products and services (Hissam and Daniel, 2009). In effect, Thomas Cook Group ought to identify other business and interest groups that have some level of relation in the kind of service and product it renders. Once this is done, a network can be created basing on the service needs that the networker can provide to also give Thomas Cook Group an advantage on the market. For example when a network is established with a media house, this media house can aid with the promotion and publicity of the company, whiles the media house also finds a way of benefiting from Thomas Cook Group. Meanwhile, promotion and publicity is one of the marketing mixes that ensures that companies achieve enhanced competitive advantage. Cited Works Breiman, L., Friedman, J., Olshen, R., Stone, C.J. Classification and Regression Trees. New York: Wadsworth. 2009. Print. Carter, D., Daniel, R., Betty, S. 2006. “Does fuel hedging make economic sense? The case of the U.S. airline industry”, Financial Management, Vol. 35, No. 1, pp. 53-86. Chen, C. C., So, R. W. 2002, “Exchange rate variability and the riskiness of US multinational firms: evidence form the Asian financial turmoil”, Journal of Multinational Financial Management, Vol. 12, pp. 411-428. Hissam S and Daniel P. “COTS in the Real World: A Case Study in Risk Discovery and Repair.” Carnegie Mellon Software Engineering Institute: Pittsburgh, PA 2009. Print. Humphrey, W. S. Managing the Country Process. Addison-Wesley Publishing Company Inc., 2001. Print. Icove D, Karl S, and Vonstorch W., Country Analysis: A Marketing Strategy Handbook. O’Reilly and Associates, Inc., 2005. Print. Read More