Key Areas of Strategic Management - QANTA, Facebook, Fortes Cue, Australian Supermarket - Coursework Example

Name: Professor: Course: Date: COMMENTARY ON THE AREAS OF STRATEGIC MANAGEMENT INTRODUCTION Strategic planning is a process that involves setting and making analysis of long-term goals and objectives of an organization or business. Strategic planning is done effectively and efficiently through the process of analyzing and studying what is known as SWOT analysis. This process and analysis involves the study of the strengths or pillars of the business organization and also the weakness are drawbacks that the business organization experiences. This study also involves analyzing the opportunities and the treats that the business organization is exposed to. All these analysis aids the successful strategic planning in the organization. Strategic management involves the study and analysis that managers undertake in order to achieve the best and success in their organizations. The summary below expounds on the key areas of strategic management in the six case studies provided. Summary of the six case studies Case Study 1 Facebook adopted two of the Whittington’s theories of strategy. From case one it is very clear that Facebook adopted the Evolutionary and processual theories of strategy. The Evolutionary theory of strategy emphasizes on the differences in the behaviors of the companies the mechanisms they use to select their markets. Here is clear that the performance of the company is associated to the combination between forces in the selection of markets and processes that come with positive feedback. When Facebook was developed in 2004 at the Harvard University, the neighboring colleges like the application. At that time it was known as TheFacebook. After a while a lot of people were learning about the application. This contributed to the widespread of the application to various people in the world. Through the positive feedback from the users Facebook therefore gained popularity and therefore got popular in the world (Collins and Montgomery 1998, pp 75). Case Study 2 Corporate social responsibility is a very important issue both for the stakeholder management and the company at large. It governs issues to do with ethics, economic performance and improvement of the living standards of the workers. The kind of corporate social responsibility depicted by QANTA is very unfair. The management has greatly over years failed to take corporate responsibility. The first instance is whereby the engineers in the company go for strike for about 3 months. This is basically due to lack of job satisfaction. QANTA’s management must put in place all measures necessary to ensure all stakeholders are satisfied with their jobs. QUANTA’S have depicted clear picture of transnational strategy. This strategy is a part of global strategy but the company majors on a specific nation of choice. Quanta’s has majored in Asia. They have established a full-service airline based in Asia. This service is under a new brand. This means that they analyzed various factors and realized the need for this change. This kind of business strategy is aimed at maximizing profits on the selected areas. It was a good and smart move for Quanta’s especially with the new brand (Birkinshaw 2004). Case Study 3 The first source of competitive advantage to Fortes Cue is the fact that they have a very highly skilled manager. Forrest is experienced and well averse and networked in issues pertaining politics and financial matters. To have such a qualified manager in a company is great advantage. The company is located in Pilbara region. This region has an awesome and conducive environment for mining and investment. The company has been in good relationship with the local communities here. This has translated to best and encouraging performance by the company of the years (Collins and Montgomery 1998, pp 75). Case Study 4 The following macro environmental factors affect Australian supermarket: reduced consumer sentiment, changing age and demographic populations, societal values and technological developments. Consumer sentiments and disposable change affects the performance of the supermarket. These are external factors that cannot be controlled. When the age and the population change it also affects the supermarket both negatively or positively. The society now days are turning to healthy consumption. A good example here is the use of natural ingredients rather than artificial ones. Technology also is a very common external factor. Advancements in technology affect the business either positively or negatively (Abrams 2003 pp404). Case study 5 This study deals with India’s cup of tea. From the study we are introduced to the history of the tea plant. The plant was first found in the year 1823 as a wild plant in eastern parts of India. The study still takes us through the way the plant was embraced. The Indians began creating plantations and estates for the tea. This plantations and estates created job employment for several people. Tea also was a source of profits when it was sold to the British markets. India is among the best producer and exporter of tea. Other countries that the study has shown as the best include China, Kenya and Sri Lanka. In 1954 a Tea Board of India was established under the parliament act to govern all the issues concerning the product and related services (Collins and Montgomery 1998, pp 75). Case study 6 This case study is about Michael Hill born in New Zealand. At the first he worked in a jewelry shop for 23 years. An incident of fire occurred in some time in he was work. Due to the fact that he had experience and passion in jewelry business, he came up with an idea of opening up his own jewelry business. Within 30 years Michael Hill International was a very big company. This is because Michael Hill had experience and great passion in this jewelry business (Birkinshaw 2004). Porter's five forces analysis focused on Australia super market & India's tea 1. Treat of entry Where there is good investment and minimal barriers to entry make it attractive for entrants. Australian supermarket was attractive to the other foreigners who were interested in the groceries and food stuff business. This is evident through the fact that a German supermarket and an American merchandiser got access to the market of Australia. This is a clearly indication that the Australian market place was attractive to the competitors (Coulter 2002). India’s Tea is also a very good investment. India is where tea plant originated widely in the year 1823. A lot of people have invested greatly on the cash crop. That is why in India we have a lot of tea plantations and estates. This investment of tea has really improved the economy. India is among the best tea producer of tea in the world. This investment therefore is good and attracts a lot of competitors. That is why we have china, Kenya and Sri Lanka being other best producers and exporters of the crop (Aaker 1984 pp70). 2. Power of buyers In the case of the Australian supermarkets, Coles and Woolworths are the major retail supermarkets of interest. The power of buyers is analyzed through how the consumers purchase goods and services from the supermarket and how power is exercised over suppliers. Due to the fact that Australian supermarkets have been performing very well, it clear that it has good power of buyers. Whenever they purchase from the suppliers the consumers who are the customers buy the products. India’s tea has also depicted a very good power of buyers. The growers of the tea sell their product to the factories in the country. The factories therefore process it and sell back to the customers to use them. Other tea produced is exported to the foreign markets such as Britain. This is a clear indication of good power of buyers (Collins and Montgomery 1998, pp 75). 3. Power of suppliers Over thirty years Australian food chain has experienced various changes. There has been great challenge especially on the food and grocery business. Great dominance of the supermarket over international and local suppliers has created a lot of heated concerns. For the India’s tea the supplies of the tea are the growers and the estate. They supply the tea to the industry for processing and others for exporting to international markets. Analysis indicated that there is no big issue here. 4. Treat of substitutes Coles, Woolworths and Aldi supermarkets are experiencing minimal treats from substitutes. This is because they have majored on grocery and food stuffs and the customers are much aware about it. Customers therefore usually prefer buying from the supermarket rather than any other place. They are sure that will not miss what the need (Dess and Miller 1993 pp 25). There is no treat of substitutes for tea in India. Tea is a product of its own. 5. Rivalry between established competitor There is a lot of competition in the Australian supermarkets. Other supermarkets come up to the market with various ways of getting more competitive. The supermarkets therefore compete for customers. The most common way or tactic for the supermarkets to survive the competitive market is to reduce prices. Prices therefore do vary from one supermarket to another. India’s tea also experience stiff competition. At the beginning India was the bet producer and exporter of tea. After some period china devised various ways of outshining them. Until now China is the best producer of tea in the world. Kenya and Sri Lanka also tops the list (Baye 2000pp 77). Corporate governance Corporate governance is composed of rules and regulations, procedures and practice that directs and controls the company. It involves satisfying the needs of all the stakeholders involved in the company either directly or indirectly. Such stakeholders are inclusive of the customers, the society, the government and the investors among many other people involved. Corporate social responsibility involves assessing the effects that the company has on the environment and the people in the society. It also involves taking responsibility of the actions and impacts that result from the company (Dess and Miller 1993 pp 26). Fortes cue’s board of directors is structured in a hierarchical manner. Forrest is the chief executive officer and chairman of the company. His deputy is known as Herb Elliot. The CEO is the most influential individual in the company. He makes passes most of the crucial decisions in the company. The rest under him including the deputy chairman must obey. The reputation of the corporate governance of this company is very high. They have ensured that all the stakeholders are satisfied. Some of the ways they have proved this include: partnering with other agencies to ensure environmental conservation and also the fact that they have involved the local community in their company. They have involved the community through vocational training and also providing them with employment opportunities (Ball and McCullog 1996). Corporate social responsibility is a very important issue both for the stakeholder management and the company at large. It governs issues to do with ethics, economic performance and improvement of the living standards of the workers. The kind of corporate social responsibility depicted by QANTA is very unfair. The management has greatly over years failed to take corporate responsibility. The first instance is whereby the engineers in the company go for strike for about 3 months. This is basically due to lack of job satisfaction. QANTA’s management must put in place all measures necessary to ensure all stakeholders are satisfied with their jobs However, the greatest milestone occurred in the 31st October of 2011. The CEO of the company reaches a crucial point of locking out all the workers. She cited reasons such as industrial actions contributing to the major losses that the company was experiencing. This action depicted a very unfair and careless way of addressing issues in relation to corporate social responsibility (Conley and Galeson 1998 pp 470). Fortes Cue therefore has depicted very impressive corporate governance. QANTA’s corporate governance is not impressive at all. This is due to the reasons clarified above (Dess and Miller 1993pp 26). PESTEL Analysis PESTEL is an abbreviation for Political, Economic, Social, Technological, Environmental and Legal factors affecting the business. Political factors show the extent to which the government can influence the business. This includes polies of tax and tariffs of trade and even fiscal policies. Fortes cue company experienced tax issue.This is seen when the government introduces carbon tax and MRRT. Forrest goes public to ridicule this move citing that it was designed inappropriately and is meant to misuse the big performing companies (Smith and Walsh 1978). Economic factors have impact directly to the company affected. For example in QANTA’s business there was high prices of fuel. This led to the big losses the company incurred. When prices of products and services shoot the customers are affected. Social factors include population, demographics and even culture. This is shown very well in the Fortes cue company. The company through the management of CEO Forrest intermingles with the population and culture of the Pilbara people. The company ends up creating job opportunities and training to them (Lynch 2006 pp 68). Technological factors include innovations and developments. Technological advancements is shown at the Australian supermarkets. There were other competitors who were using highly technologically advanced mechanisms to outshine them. For example in the case study we are informed of the virtual supermarkets. This technological advancement was employed in order to increase the competitive advantage. Environmental factors are the ones influencing the surrounding of the business. Fortes cue is a good example of company where environmental factors are highly considered. In this case of Fortes cue we see the company partnering with other agencies to come up with ways of conserving the environment (Conley and Galeson 1998 pp 470). Legal factors affect every business. It can be internal or external for the company. An example of internal legal factor is when QANTA was outsourcing employees. They had to do follow internal legal procedures for doing this. Facebook, Fortes cue, QANTA, India’s tea, Australian supermarkets and Michael Hill International all have legal procedures and regulations to adhere to (Dess and Miller 1993 pp 26). Business Strategy A business strategy majors on the actions that a company takes in order to gain competitive advantage. The world is full of competitions and companies which will not implement appropriate survival tactics will be outshined. Facebook embraced globalization inorder to remain competitive. This is a process that involves close integration and exchange between different nations and the whole world at large. The main benefit that Facebook got through globalization is the gain or access to larger markets. Facebook users are all spread across cities, villages, nations and around the globe. Facebook therefore is secured of its customers. This means that the profits they generate are also secured At the begging the QANTA was experiencing huge losses. These losses were attributed to various environmental and other factors such as escalating prices of fuel. It was emergent for the company to devise ways of resolving this negative issues. Emergent strategy helped the company to regain from losses gradually. It was emergent for Quanta’s to come up with innovative operational tactics to reduce global financial crisis. They also introduced a new brand in Asia in order to remain competitive (Collins 1995 pp 40). There are several goals and values that have been set for the company in order to remain competitive. Fortes cue company majored on exploration in Australia. The company has set up a team to work on explorations. They are determined to add up to 1 billion tons of iron cores annually. This working together as a team to achieve a common goal is what has translated to best performance. The company also has laid a very good foundation of relationship with the local community. The company has greatly contributed to the successful investments in the community through the housing construction, vocational training and employment programs. They have also partnered with various agencies to ensure environmental conservation. All these combination has contributed greatly to the success of the company (Smith and Walsh 1978). The entry of ALDI and Costco into the Australian supermarket industry does not pose any major treat to Coles and Woolworths. Coles and Woolworths already have the advantage of large market access and customer acceptance. The competition will be rising with time but Coles and Woolworths are already conversant with the customer needs and preferences. This is a clear indication that Australian supermarkets had embraced good business strategies (Ansoff 1979 pp 68). Mintzberg's 5 P's for strategy 1. Strategy as a plan It involves putting in place good measure for actions. From the case studies Facebook had a clear plan to embrace globalization in order to remain competitive and get access to wider markets (Sadler 2003). 2. Strategy as a ploy This includes measure to outshine the opponents. Australian supermarkets majored on food and groceries in order to outshine competitors. They frequently reduced prices in order for the to gain competitive advantage in the market (Dess and Miller 1993 pp 25). 3. Strategy as a pattern This include stream of the action that the company undertakes. For the case of India’s tea, they created tea plantations and estate to maximize on the production. This in turn translated to huge profits and in come to the employees (Collins 1995 pp 40). 4. Strategy as a position This is the strategy mainly in reference to the company’s environment. For the case of Fortes Cue Company, they involved various tactics which were beneficial to them and the surrounding. For instance they introduced vocational training to the local community. They also created employment opportunities for them (Coyle 2000 pp 306). 5. Strategy as a perspective This strategy involves sharing of the companies perceptions to the stakeholders. QANTA for example realized the need to create a full airline in Asia. This was a strategy that included changing of the brand name in order to rebuild the company (Buzzel and Gale 1987). Emergent and intended strategy Emergent strategies are strategies or actions that are not planned for by the organization. These strategies do normally create a lot of effects on the organization. An example of an emergent strategy in the case studies is in the QANTA’s. When the CEO realizes the company is running on huge losses, she decides to lock out all the workers. This happened on 31st October 2011. This was a big shock and blow to the employees and the world at large. None of them expected that to happen. Emergent strategies mainly do have negative impacts. An example in this case QANTA employees lacked income due to the strategy Intended strategies are planned by the organization and are genuine. In the Forte cue company the organization plans and partners with an agency regarding issues of environmental concerns. They also plan to create vocational training to the people of Pilbara region. These actions were well planned for the benefit and the success of the organization (Kourdi 2003 pp 107). As I conclude it is now very clear that the six case studies have elaborated the core areas of strategic management. The case studies elaborate various strategies that different organizations has approached in order to achieve their set goals and objectives successfully. The management of various organizations such has Facebook, QANTA and Fortes cue have differently approached strategic management for the success of their organizations. Other companies even have gone to the extent of involving emergent strategies to ensure that their organizations perform as expected. References Collis, D. J. & Montgomery, C. A. 1998. Creating corporate advantage. Harvard Business Review, 76(3):71–83; Saatchi & Saatchi. 2001. Saatchi & Saatchi Corporate website: www.saatchi.com. Seeger, J. 1984. Reversing the images of BCG’s growth share matrix. Strategic Management Journal, 5(1):93–97. Buzzell, R. D. & Gale, B. T. 1987. The PIMS principles: Linking strategy to performance. New York: Free Press. Miller, A. & Dess, G. G. Strategic Management. 2nd ed. New York: McGraw-Hill. Collis, D. J. 1995. 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