Strategic Business Unit Plan Analysis - Open Office.org - Case Study Example

Strategic Business: Strategic Business Unit Plan Analysis Name: Course: Tutor’s Name: 5th, April, 2010 Strategic Business Unit Strategic business units are sections that form part of the business strategy to achieve the organization’s aims. An organization can have a performance unit, a product unit, a competitive advantage, stakeholders, processes, markets or resources units depending on the organization structure, the market and the aims of the organization (Williamson, Cooke & Jenkins, 2003). Strategic business unit analysis is part of strategic business management analysis. It considers who the consumers of the unit goods and services are, why the customers choose the products in that unit or why the customers are in that unit (what need is met), what the success factors are, what the performance indicators are and their trend and the resources needed to ensure the customers get what they need. It also focuses on how the resources available can help the business unit in assisting the business achieve its aims (Williamson, Cooke & Jenkins, 2003). The aim of a strategic business unit therefore is to help the company achieve its aims. As indicated above, a business unit can be a human resource department, a marketing department or a product unit. In this paper, a marketing department of Open Office.org is considered a strategic business unit and its strategic plan will be analyzed. The analysis will consider the purpose of the strategic plan, the contents in relation to the aim of the organization and whether the plan needs improvement or not. Before the analysis of the plan, it is important to describe the role of a marketing department in an organization which will help in the analysis of the plan. As indicated earlier, a marketing department is part of an organization that helps it achieve its aim. The organization can be divided into several different units depending on the management system and the structure of the organization. The marketing department can also have strategic business units that help the department achieve its aims. The aims of the department in turn help the organization in achieving its aims. The Role of a Marketing Department The central role of a marketing department is to communicate, create and sustain value of an organization. This is done by understanding the needs of the customers in order to provide, quality and satisfying products and services to the customers (Grünig & Kühn, 2005). In order to understand the consumer needs and provide them with what they want in the products and services, a lot has to be done. Market research has to be done, a branding strategy has to be developed, and communication has to be done through a variety of channels and so many others (Obringer, 2010 & Grünig & Kühn, 2005). Planning is also one of the steps needed to ensure that the customers are satisfied. Ensuring customer satisfaction is not the only aim of the marketing department. The organization may have other aims for example, expanding to different regions apart from the current region that the organization may be operating in. In this case, the marketing department has to plan on how to market their products to the regions that the organization aims to expand to (Obringer, 2010). The other role of a marketing department is to assist the organization in maintaining a competitive advantage. The department’s management has to consider the company’s other people’s input (Obringer, 2010). The Role of Open Office.org Marketing Department As Depicted by the Strategic Marketing plan Considering the role of a marketing department, the plan has outlined how it assists Open Office.org in achieving the aim of sustainability and maintaining a competitive advantage. The strategic marketing plan has outlined a disruptive strategy that the company plans to use to get customers not yet taken by its competitors and those considered unattractive to other competitors (Open Office.org, 2005). This increases the market share of the organization and places the organization at a strategic position to compete with the market leaders such as Microsoft (Open Office.org, 2005). Another role that the plan has covered is the target on customers. The strategic plan has explained a detailed market research on the community, the competitors and the market. It has also analyzed the market and provided recommendations based on the market situation. The plan has a PESTEL analysis and SWOT analysis (Open Office.org, 2005). This has enabled identification of the strengths, weaknesses, threats and opportunities which have been used to outline recommendations on what the marketing department should do. All the information about the recommendations can be found in the case study (Open Office.org, 2005). The Open Office.org Strategic Marketing Plan Strategic Plan Structure and Contents Strategic management process requires planning which involves determination of the mission, the objectives, situation analysis, strategy formulation, implementation and control (NetMBA, 2007). The mission of the organization is the reason for the organization’s existence. In the case study (the strategic plan presented as the case study), the mission of the plan is clearly stated. The mission is to analyze the current market for office productivity suites, the major players in the market and the trends that will influence the market in the future. This means that the mission is to identify the situation of the market currently and for future development (Open Office.org, 2005). Objectives: The objectives are the goals that a business unit sets to achieve. In the Open Office.org case, the plan explains its usage goals and its objectives. The usage goals are; that Open Office.org should be the product of choice in the community for office software users (Open Office.org, 2005). That Open Office.org, be a product in different languages. Other objectives described in the plan are; marketing objectives which include; The product should be in available in different languages with a target of more than 10% of the people using That the product should be readily available to the local computer users (90%), with a charge rate lower than an hour’s local average wages. The product achieving global brand awareness That every general purpose Linux should have Open Office.org as the component (Open Office.org, 2005). Situation Analysis in the Strategic Plan: Situation Analysis has been done by the use of two models of analysis. In the strategic plan, there is PESTEL analysis which gives the organization or the marketing department the information necessary about the external environment of the company considering their product and SWOT analysis which shows the strengths, weaknesses, opportunities and threats to the organization (Open Office.org, 2005). Apart from the two models, a detailed market research has been done and documented in the plan showing the community that the organization serves, the competitors, the market and the product characteristics. All these information are important in the determination of the organization’s position in the market, the performance of the organization, its position considering competition and the market share. The information is also important for the department’s formulation of any strategy for example, the Open Office.org strategic marketing plan has identified a strategy that if implemented, can make the company have at least 40% of the market of office suites (Open Office.org, 2005). Strategy Formulation: Strategies are aimed at achieving any objectives that a department or an organization sets. With above described objectives, the following strategic proposals are described in the plan as ways of ensuring they are met: Community: To first establish or select a community governing body that will help the community to govern and deliver the other Open Office.org proposals. Product: To build a strong brand name by reviewing the Open Office.org brand name in relation to rebranded COTS variants (the AOL, Novell office and Star Office), encouraging software producers that use Open Office.org codebase to display the Open Office.org style of branding and to leverage strong brands if available for Open Office.org reinforcement (Open Office.org, 2005). To develop the brand values improve brand quality and develop the product considering the future requirements of consumers and the market situation To seek support from the community and develop an appropriate package of Open Office.org suite (Open Office.org, 2005) The price: to develop appropriate pricing strategies considering the standards met, the resources used and the value of the product in relation to its contribution to the community. Promotion: To develop appropriate product promotion strategies Distribution: To develop proper distribution strategies. Implementation and Control: Implementation process according to the plan has been assigned to the members of the project each with different responsibilities. The members include; Project leads, marketing contacts and marketing project observers. The project leads own the process of strategic marketing plan creation and maintenance of the plan. The project contacts help in the creation of the project and also promotion, local market intelligence and translation. The observers are considered full participants of the project activities for example online activities and marketing discussions (Open Office.org, 2005). Porter’s Five Forces Analysis Porter’s five forces are; buyer power, supplier power, threat of substitutes, threats of new entrants and rivalry among the competitors (Quick MBA, 2007). Open Office.org has several competitors but the major competitor and a rival is Microsoft Inc. According to the plan, there is rivalry between the two companies in terms of market share. An example is in the case of pricing of the products. The plan has indicated that they have a problem with the competitor (Microsoft office), which has had knocking campaigns against open source and implemented a lower pricing strategy as a way to maintain their competitive position and reduce the market share of Open Office.org (Open Office.org, 2005). It is indicated however that the Open Office.org will target those customers that have not been captured by Microsoft and other competitors so that their market share is improved. Open Office.org has two substitute products that can replace some of its products for example the single function office products (single spreadsheet products that ay replace its spreadsheet) and alternatives to desktop office suites (Open Office.org, 2005). These offer competition as well. There are no threats of new entry according to the plan but based on the current world developing technology, the threat of new entry may be counted as a disadvantage to the organization. The future market of the organization has also been analyzed and no threat of new entries has been discovered. The company has moderate buyer power. This is shown by the market share that the company owns (40%) but it has plans to increase the market share in the future. The people need these software and currently there are only two companies (Open Office.org and Microsoft Office) providing such a product (office suite) (Open Office.org, 2005). There is no information about supplier power of the company. Additionally, Open Office suite is a combination of spreadsheet, word processor and presentation packages built out of the limitations of computing technologies. The company therefore is the sole producer of the software. Recommendation Currently, based on the above analysis, the company is not in a good position considering the substitute products, the competitors, the rivalry that exists between it and the leading provider of office suite. The strategies developed to ensure the company remains in the market however are good enough to maintain their market share and strategic position in the market. The plan also has strategies for the future which means irrespective of the rivalry, competition and substitutes, the company is able to fight on and remain a strong competitor. The structure of the plan is also in order. As described by NetMBA, a strategic management plan should have a mission, objectives, situation analysis, strategy formulation, implementation and control. It has also shown how it fulfils its functions to the organization. References Grünig, R and Kühn, R., 2005, Process-Based Strategic Planning, 3rd Ed., New York, US: Springer. NetMBA.com., 2007, Strategic Management: The Strategic Planning Process, Retrieved on 4th, May, 2010 from: http://www.netmba.com/strategy/process/. Obringer, A. L., 2010, How Marketing Plans Work: Marketing Department Role, Retrieved on 4th, May, 2010, http://money.howstuffworks.com/marketing-plan3.htm Open Office.org, (2005), Strategic Marketing Plan 2010, Retrieved on 1st, May, 2010 from: http://www.google.co.ke/search?q=Springer&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a Quick MBA, (2007), Porter's Five Forces: A Model for Industry Analysis Retrieved on 4th, May, 2010 from: http://www.quickmba.com/strategy/porter.shtml. Williamson, D., Cooke, P. and Jenkins, W., 2003, Strategic Management and Business Analysis, Oxford, UK: Butterworth-Heinemann. Read More