STRATEGIC MANAGEMENT ANALYSIS - Essay Example

?STRATEGIC MANAGEMENT ANALYSIS By Vision, Mission and Stakeholders Better Place is an auto mobile company which intends to challenge the status quo in the rigid internal combustion engine motor vehicle industry. This company has an intention of making the world a favorable place to live in following the increasing level of greenhouse gas emissions. The company seeks to liaise with other automobile companies and revive electric vehicles in Israel. This way, a major network of electric vehicles will be formed (Gilder, 2013, p. 95). Better Place has a mission to exist on which aims at complete elimination of automobiles that use oil. These cars will be friendly to the environment as there will be no toxic fumes production via exhaust pipes. This implies that there will be no threat of gas build up from these cars. Better Place asserts that it is different from other companies in the sense that it works in the view of changing the world by bringing on board the electric vehicles. The vehicles will be cost effective as opposed to cars that are wholly dependent on petrol and diesel. According to statistics, it can be shown that internal combustion vehicles would cost owners an average of $ 0.11-0.12 for every mile cruised. On the other hand, electric cars are estimated to spend $ 0.06-0.08 mile on average (Alt, 2013, p. 6). These statistics fully support the Better place in its assertion that it will make a difference that will impact positively on the lives of Israelites. On the contrary, if Better Place were not there, there would also be unhealthy competition due to the fact that there would be no change in different car models to offer a wide range of choice (Etzion & Struben, 2011, p.8). Also, creativity and innovation would be phased out in automobile industry leaving no opportunity for more choices. Better Place has stakeholders who intend to build long term relationship with for constructive progress of the company. These stakeholders decide on forms of engagement and recording of the outcomes as well as improving the way the organization works (Husted & Allen, 2011, pp. 128). These stakeholders include employees, customers, suppliers and members of the community in Israel. The headquarters in California provide the effective guide in terms of delocalized management in which case the company is able to have well co-ordinated activities in all countries of operations. They are very important in business engagements as they contribute in its growth and development. This relationship is illustrated using a table below whereby employees’ involvement is to improve morale, motivation and creation of dynamic safe environment. Customers on the other hand engage in building reputation helping in building the business (Etzion & Struben, 2011, p.21). Then, government helps the company keep abreast with policy and regulations while the community builds the organization’s reputation. Venture capital investors have the duty to invest more capital into the business so that its financial status is strategically envisioned. Suppliers have a very big role to play in production as the supplies of for example tires keep the company service and goods provision to the market strong and stable. Other utility companies are very important as they either make use of the company products or make relevant supplies of validity. Car manufacturers are of great value because they make the industry have the required supplies of cars and spare parts as much as possible. Low level of Interest High Low Power High source: (Gilder, 2013) Industry Analysis and Scenarios Better place is bound to face various positive and negative scenarios in its course of it business activities. This means that eventualities are expected and the company must device new strategies of fighting its rivals in business activities. In this respect, it should prepare to fight all possible threat that may undermine its progress. This would be achieved by proper incorporation of methods that re reasonable and applicable (Husted & Allen, 2011,p.21). The eventualities as stated put Better Place in a competitive position in the market making it possible for the company operates competitively. The position that it holds and the segment of operation as far as market variables of concern as stipulated in the tables are concerned. In this respect, better Place should embrace Porter’s five forces as an alternative to SWOT analysis. The analysis is based on structure conduct performance as seen in industrial organizations economics (Struben D. E., 2011, p.4). In fact its application has helped many companies realize increased profits which have also contributed to governments stabilizing industries s well. These forces are highly applicable in determination of how to make profit, how to cope with rivalry and the stage of growth of the company. For instance, during the early stages of company‘s growth, the rivalry experienced is considerably low as opposed to later stages of growth. Likewise at this level the business is less likely to experience shake outs in financial and managerial strengths. As the business matures, it faces more threats are faced as more competitors become available and more barriers are also faced before entrance into the market (Watson, 2013, p31). The five forces if well utilized by Better Place are a clear way to help it penetrate into the market with ease. In the work cited by Porter, managers of Better Place must learn to get prepared to face modern form of competition which is direct. As the company becomes established, competition may go beyond the level of the company and at this point clients who may become more aggressive, innovative and creative and start their own business by borrowing ideas from the company and this will be a threat to the company (porter, 2006, p.9). In this respect it is clear that the five forces interrelate. Firstly, the substitute goods and services may win more customers making a company lose its profit since customers will obtain various goods serving the same purpose. Secondly, other companies entering the market may come in with better terms that may lure clients and divert their attention to the new product with an intention of trying it out. Thirdly, customers bargaining power determines what profit the company is bound to make as some clients may have a big bargaining power that may reduce the profit margin (Struben D. E., 2011, p.5). Also suppliers bargaining power is a key determinant of how much profit a company may get because some suppliers may offer goods and services at a reasonably good price and this may make a company make more profit. Finally Better Place should focus on the current competition trend to know the strategy to put in place and fight its competitors. From the foregoing, it can be stated that the position of the business in the market is threatened by the above mentioned terms. If new suppliers come in to the market with better prices and high quality, then it will be possible for the company to lose ground of some of the areas of strength it holds. Resources and Capabilities In any organization, capabilities and resources are the basic fundamental basic units that lay the foundation for coming up with the best competitive advantage. Resources can be tangible or intangible whereby tangible resources include mail lists, equipment and machinery. On the other hand, intangible resources include skills, knowledge about customers, reputation and legal support (Struben D. E., 2011, p.11). As stated, intangible resources are far much important as they determine how well an organization will win customers by fully convincing them to use their products. On the other hand, capability refers to a more complex skill that is applied in an effort to aiding deployment of gathered resources. Capability ensures that proper ways of delivering goods and services to customers are mobilized (Husted & Allen, 2011, p.10). They ensure that clients benefit from value that is profitable and reliable clients are identified so as to get optimal revenue and create a market that is actionable. With these in mind, Better Place should appraise resources and capabilities basically by applying simple method. Some of the methods may include evaluation of its employees to point out any inconvenience that may require rectification. Also this may help in improvement of quality through added skills and introduction of new technology to keep abreast with modern trends in automobile industry. The strength accruing from appraisal is that both the management and employees come on board and work with a projected objective to achieve the organizations goals. Also, points of weakness are addressed to make the required improvements. Changes are also made where necessary and the best performers are rewarded appropriately. Better Place has learnt to exploit strengths by liaising with many companies so that it can distribute its risk .It intends to associate with other companies involved in manufacture of compliment goods and support services. It does not appear as monopoly as it has tried to share its distribution of services by subcontracting some tasks to other companies. Also, there are weaknesses that may derail the company. For instance, there may lack charge stations along highways and this may inconvenience electric car users along the way. Still, there may be a problem in standardization methods of car batteries and infrastructural requirements including lighting fixtures. Finally, superfluous strength may be utilized by this company through grants, donations, subsidies, and loans from the government. This may make it easier for the company to lay a strong foundation as well as having a better competitive advantage over other companies. Business and Corporation Strategy To formulate a good business strategy, Better Place will have to consider strategic theories that are effective in its fight for competitive advantage (Etzion & Struben, 2011, p.21). Cost Leadership strategy should be considered whereby the organization concentrates on low cost competition to make to gain advantage over its opponents by using hidden service as the tool for competition. This is also applicable through charging lesser prices and increasing market share to take advantage of reduced cost. The making of the cars should be based on quality in which case there is no compromise of quality. As a big company, it can capitalize on economies of scale in the market to up its operations as well as keep its customer base satisfied. This strategy will work best because the customers have been able to make economies with their money and therefore would create a credible do with having high quality products at a lesser price (Alt, 2013, p.21). Similarly the company may contemplate segmentation, a process involving subdivision of business into small subsystems that are independent to reach more customers instead of centralized operation system. Cost of production incurred must be put into consideration to avoid overstretching the company’s resources and capability. The company will identify procedures that will publicize use of a structure that is functional. For instance, it can expand its value chain to development of structures to help- fight off the strategies of the competitors in the market. This would be done without jeopardizing its profitability and value in the market in terms of the quality. Secondly, cost factors are very important factors to consider in maintenance of the available market. Consideration of the cost factors will be very important in the market. As has been stated, the industry as a whole fights for price controls in the market. However, this company can work out this by elevating itself to use of economies of scale so that it can have an edge on the use of price. Maintaining quality, the company can develop a generated price mechanism that makes it possible to create a lower price-high quality criterion. Intelinkages between the different criterions would work to make this happen. For instance, the company can create a good supply base in a country that has a good comparative advantage in terms of production. The supplies will be made at a lower price and then sales also adjusted to accommodate the ability of the customers in the market. References Alt, D. E. (2013). Corporate Strategy. Toronto: Anglia Ruskin University. Alt, D. E. (2013). Resources and Capability. Toronto: Anglia Ruskin University. Alt, D. E. (2013). Strategic Management Analysis. Washington: Anglia Ruskin University. Etzion, D., & Struben, J. (2011). Better Place Shifting Paradigms inthe Automotive Industry . Toronto: McGill University. Etzion, D., & Struben, J. (2011). Better Place: Shifting Paradigms in . Toronto: McGill University. Gilder, G. F. (2013). The Israel Test. Washington: Encounter Books. Husted, B. W., & Allen, D. B. (2011). Stakeholder Engagement and Competitive Advantage. London: Cambridge University Press. porter, M. E. (20o6). Cmpetitive Forces. London: Harvard. Struben, D. E. (2011). Better Place Shifting Paradigms in . Toronto: McGill University. Watson, T. J. (2013). Strategic Management Analysis. 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