Strategic Management Process - Assignment Example

Strategic Management Activity 1a Strategic management refers to a goal oriented management where a firm’s mission and planned achievements are set out clearly and all the management process are designed toward reaching the firm’s overall goals Activity 1b Direction refers to the course of action taken by an organization in realization of its strategy or goals Scope refers to the extent to which a firm activities can go in pursuit of the set goals and objectives Advantage refers to any opportunity or circumstances that are likely to favor the organization’s activities Resources refer to any productive or economic factors that are necessary to achieve a given outcome (organizational goals). Markets refers to the targeted consumers of the organization’s products and services Stakeholders refer to all individuals, groups or organizations that can be affected or can affect an organization actions or decisions. Activity 1c Encouraged the used of operational strategy Encouraged the use of management by objectives Activity 1d Retail supermarket Drake supermarkets- this is one of the largest grocery retailer in Australia, the supermarket also operates consulting services, liquor store and several news agencies. Some of the products offered by Drake supermarkets include health and organic food offerings, a wide range of prepared meals, and full meal packages. Major competitors include Flemings supermarkets and Thomas Dux Grocer supermarkets. Motor vehicle manufacturing industry Ford Motor Company of Australia Ltd- this company manufactures, distributes, and imports small to medium size vehicles, sports, luxury, and four wheel drive vehicles. There are only two models that are manufactured in Australia i.e. Ford Territory and Falcon which are also exported in small quantities to South Africa, New Zealand and other countries. Some of the major competitors include Volvo Group Australia, and GM Holden. Activity 1e Five things that can affect or influence the strategic direction of the company Resources Stakeholders Technology Leadership Government policies. Activity 1f Activity 2a One of the political factor that has affected or can affect a business in Australia or overseas is the changes in government More often than not changes in government leads to changes in policies and attitudes towards different businesses mainly foreign ones. The new government may decide to encourage business activities by offering attractive opportunities or discourage business activities by imposing restrictions such as quotas. Activity 2b One economic factor that has affected or can affect a business in Australia or overseas is the demand and supply. Demand and supply are the two critical factors that affect the operations of any business. Demand refers to the ability of a consumer to buy a given commodity and supply is the ability of the business to provide for the demand of the consumers. Activity 2c One of the social cultural factor that has affected or can affect a business in Australia or overseas is the cultural heritage/values. This sometimes determines the demand of a particular commodity produced by a business in a given region. Also some community customs may favor or hinder the demands of certain goods. Activity 2d One of the technology factor that has affected or can affect a business in Australia or overseas is automation. Adoption of automation in a given business affects its operations in a very big way. Automation improves the quality of goods manufactured and increases the company product output. However, automation also leads to some challenges in business like how to restructure the management to accommodate the technology. Activity 4b Strengths, Weaknesses, Opportunities, and Threats (SWOT) refers to an analysis tool used for auditing an organization and its environment. Strengths and weaknesses refers to the internal factors while opportunity and threats refers to the external factors. The following examples represent SWOT in different companies Wal-Mart Strengths Has a powerful retail brand that has reputation for convenience, wide range of products, and value for money It has grown a lot over the recent years and also experienced a global expansion Strong competence in information technology use for supporting its international logistics systems A well thought/ focused strategy. Weaknesses Being the world’s largest grocery retailer some areas are exposed due to its huge span of control Since it sells products across many sectors Wal-Mart may lack flexibility that some of its more focused competitors have It’s a global company but has its presence in only a few countries worldwide. Opportunities There is an opportunity of expanding the business in many more countries like India, and China It can merge with other global retailers that focus on certain markets like Europe The new locations offers Wal-Mart an opportunity to exploit market development Wal-Mart can still continue with its present strategy of super centers. Threats It is a target of competition both locally and internationally being a number one retailer. Since it operates globally, it is exposed to political problems existing in different countries Increased price competition due to low manufacturing costs of the consumer products Starbucks Strengths It’s a profitable organization which had an earning of over $600 million in 2004 and also generated revenue of over $5000 million during the same year. It is a global coffee brand with a reputation of fine products and services. It is a one of the respected employers that value its workforce. Strong ethical values and mission Weaknesses They have a reputation of new product development and creativity but this may not be sustainable for a long time Most of its businesses are concentrated around one area which is very risky. They are dependent on retail coffee which gives them a competitive advantage; this may make it hard for them to diversify in other sectors Opportunities Possibility of new products and services that can be retailed in cafes Opportunity of expanding its operations to other markets such as India Opportunity of co-branding with other different manufacturers of drink and food. Franchising the brand to other manufacturers of goods and services has a potential too Threats There is a possibility of another type of beverage to replace coffee in future Increased cost of coffee and dairy products Presence of many competitors and copy cat brands. Nike Strengths It’s a competitive organization It has no factories which makes it a lean organization Strong at research and development of new innovative products It is a global brand that’s instantly recognizable anywhere in the world. Weaknesses Small range of sports products hence the business rely heavily on the income got from footwear market. This may make the business vulnerable in case the market share diminishes Price sensitivity of the retail sector Opportunities Product development offers them many opportunities Opportunity to develop other products like jewellery, sportswear, and sunglasses Strong international brand recognition which means that the business can be developed globally Threats Exposure to international nature of trade since it buy and sell using different currencies The market for sport shoes is very competitive Competitive nature of the retail sector Bharti Airtel Strengths Large customer base over (65 million customers) Strategic alliance with strong stakeholders like Nokia and Sony Ericsson Wide coverage (entire Indian nation network) Weaknesses Outsourcing cellular telephone experts during start up has always put them at a disadvantage. Lack of their own towers in the beginning Lack of any real emerging market when the Indian market becomes saturated. Opportunities The company is in possession of a customized Google search engine that can enhance broadband services to all its customers Viewed as a key strategic player in the Indian market Joint venture with Vodafone Essar and Idea Cellular will open up so many opportunitie for the business Threats Poor relationship between Airtel and Vodafone The company may be targeted by other telecommunication players wishing to move into Indian market Activity 4c Personal SWOT analysis Strengths I have excellent analytical skills- have the ability to analyze different scenarios critically Articulate- can easily communicate my ideas very well Organizational skills- I am organized in my work Ambitious- always committed to achieve the set goals Balanced work life perspective- I always balance my activities, work and recreational activities Weaknesses Impatient- I have problems explaining something to those who are slow in grasping some concepts Perfectionist- I am so attentive to details that sometimes make me not see the ‘bigger picture’ Poor in technical subjects -I don’t like subjects mainly dealing with calculations Strong urge to get things fast done hence ignoring the fact that we all have different skills and abilities Opportunities Many resources in the internet to improve my knowledge in calculations. To enhance my ability in managing the need to complete tasks quickly Improvement in the way I look at tasks by avoiding to be so attentive to details Opportunity to exploit my organizational and project management skill Threats Lack of better understanding to technical subjects limits some of my potential in project management Increased demand for an individual who can handle different tasks in an organization may be a threat in future Being a perfectionist sometimes make me not meet my targets Activity 5a Competitive analysis Competitive analysis refers to the assessment of the strengths and weaknesses of an organization potential competitors It is important for a company to analyze its competitors to understand their competitive advantages/disadvantages relative to those competitors. to analyze its competitors a company need to do the following: understand who the competitors are; the threats they pose; their objectives; their profile; their weaknesses and strengths; how they can respond to the changes done by the company The information/data collected about competitors is used in strategic management. Activity 5b Activity 6a Mission statement is a very important to any organization as it tells the purpose for existence. It guides on how the activities in an organization without which a company cannot realize its goals. Employees on the other hand play a pivotal role in ensuring that the goal set are achieved, it is imperative therefore that they understand the mission statement fully. Employees are only cynical about the mission statement if their needs are not addressed adequately. Using mission statement to inform external stakeholders will lead to the downfall of the organization. Activity 6b Mission statement is used to define the organization purpose and its primary goals while the value statement defines the organization’s principles, basic philosophy and ideals A company may consider rewriting its mission statement so that it accommodate the views of all the stakeholders and set a clear direction of what the company want to achieve. Most employees know about their company mission statement but cannot remember what it says because in most cases, their needs are not adequately met and also they lack an understanding of why mission statement is important. STRATEGIC ANALYSIS REPORT OF VIRGIN BLUE AIRLINE. Part A 1a. Virgin Blue Airline now known as Virgin Australia Airline is the second largest airline in Australia. This airline is based in Bowen Hill, Brisbane, Queensland Australia and was co-founded in the year 2000 by former Virgin Blue CEO, Brett Godfrey, and British businessman Sir Richard Branson. During inception, the airline had just two aircrafts that were operating on a single route. On the collapse of Ansett Australia in 2001, the airline found itself catapulted to the second position among Australian airline. Currently the airline has grown to an airline group that includes Polynesian Blue and Pacific Blue flying to eight international 23 Australian destinations. The Polynesian Blue airline that is a joint venture between Virgin Blue and Samoan Government operates flights to and from Apia and Auckland while the Pacific Blue operates flights within Pacific Island and trans-Tasman. Some of the alliances that exist with this airline include that with United Airline, Emirates, Malaysia Airline, Hawaiian Airways, Thai Airways, and Regional Express Airline. Major competitors of Virgin Blue airline include, British Airways, Jetstar Airlines, SkyWest Airlines, Tiger Airlines, Qantas Airways, and Regional Express Airlines (OZ Aviation, 2011) b. Virgin Blue Airline serves 28 cities in Australia with its hub being Brisbane Airport. It operates two business units, a commercial passenger commuter service, and package delivery service using A fleet of Embraers and Boeings. Currently the company has 75 commercial jets and 3 freight planes. The company carries over 15 million passengers yearly. Virgin Blue Airline market is mostly the Australian market that accounts for 80% of the business. This business is around the major cities among them being Adelaide, Sydney, Canberra, Melbourne, and Brisbane. Figure: Route diagram of Virgin Blue Airline (Airline Route Maps. COM, 2011). Virgin Blue Airline PEST Analysis (political, economic, social, &technology issues affecting the company) In order to identify and understand some the different environmental factors that affects Virgin Blue airline and its marketing activities it is important that PEST analysis be conducted. Currently some of the political and legal factors affecting the airline include the government desire to maintain domestic market completion and to deregulate aviation industry. Economic factors affecting the company include flight security since the events of 11 September, increased fuel cost and increased competition. Social cultural factors affecting the business include tight labor market and industrialization and technology that has raised the education levels that means it is easy to get qualified personnel. Finally, advancement in technology has made it possible to have large airplanes that can enable the company achieve better economies of scale (Australian Airline Industry, 2011). Virgin Blue Airline SWOT analysis Strengths Being the second largest airline in Australia means that the company enjoys a large customer base. A strong brand name (Virgin Blue) which is international recognized means that the company attracts a wide range of customers from all over the world. Its ability to operate low cost airlines in the market hence accommodating different customer needs They are one of the most on-time airline in Australia which is a plus to the business Its high strategic innovation that has kept the business competitive amidst the stiff competition in the industry. Weaknesses It is not an Australian owned airline which means it faces some challenges that locally owned airlines do not face Financial weakness of the company that is not good for business. There are records showing that the company has recorded negative cash flow in the last few years Opportunities Currently the passenger traffic in Australia has been increasing at a very faster rate than the capacity, this means that there is an opportunity for Virgin Blue Airline to expand its business to cater for this increase There is a lot of opportunity too in the cargo movement business, in July 2011 the total cargo movement in Australia increased by 1.9% to reach 41,800 tonnes. This means that the company can dedicate some of its resources to expand the cargo movement business Formation of alliances means a lot to this business and there exist some opportunities to form alliances with some big airlines like the Delta airlines. Such opportunities should be exploited. There is a potential for the business to connect many of the major cities in the world that would bring so many other opportunities. Threats Stiff competition from other airlines such as Jet star that are offering low cost tickets too The rise in fuel cost has become a real threat in this business. For the last couple of years the amount of revenue has been declining and among the reasons, why this has been happening is due to fuel cost. The weakening of the economy in the country has been affecting the business so much. This is because the deterioration of the economy means weak airline profits. The financial performance of the airline industry is dependent on how healthy the world economies are. Lack of proper airport infrastructure in Australia is straining the business, it is already evident that there are many constraints during peak periods and this is expected to increase as the aviation market in the country grows. Due to hard economic times, the business has not been doing very well in the last few years. The weak economy results to weak airline profit. It is expected that the net post tax profit in airline industry to go down from $16 billion achieved in 2010 to $ 6.9 billion. Part B VIRGIN BLUE AIRLINE Mission statement To be the most preferred airline that is profitable and where people would love to fly. Value statements provide a work environment where customers are treated with respect and dignity Embracing diversity in all our operations Applying high standards of excellence in customer service delivery Creating enthusiastically satisfied customers by catering for their diverse needs at all times. Strategic objectives Focusing on the business leisure markets Improved effectiveness and efficiency in our operation Focusing on consistent delivery of the basics in this industry Key strategies Formation of alliances with major airlines to target as many customers as possible Increased flight routes covering major cities in the world. References Australian Airline Industry (2011). Competitive Analysis. Retrieved from http://www.slideshare.net/lovebaby193/competitve-analysis-presentation Airline Route Maps. COM (2011). Route diagram. Retrieved from http://www.airlineroutemaps.com/Oceania/Virgin_Blue.shtml OZ Aviation (2011). Brief History of Virgin Blue Airline. Retrieved from http://www.ozaviation.com.au/CurrentAirlines/VirginBlue/VirginBlue.html Read More