PR and Strategic Management - Essay Example

PR and Strategic Management Introduction PR and Strategic Management are two sides of the same coin with the major difference being in their approach; Strategy is believed to be the policy made at the top that percolates downward and PR runs from bottom upwards. In fact, both of them end up end up being tools for decision making. “In public sector strategy puts to use all assets of an organisation including human resources to maximise the social needs of an organisation (Thomson). On the other hand PR places high value on three interrelated 3Ms-Material, Machines and Material to reach the corporate objectives (Lord Satchi quoted by Thomson.” Thus it is necessary for us to interpret strategy and PR as efforts to promote the working of an organisation, which includes sacrificing the unnecessary and using to full-advantage, the available resources. The dichotomy of views occurs in the private and public sector organisations, where the goals of a company are defined separately in terms of sheer competitiveness of the former and ability to deliver in the latter; the choice of ideals again resting on the middle level managers. Both PR and Strategy again rest upon the choices made by men in aptly using the money, material in a mechanised environment. If one of these variables is disturbed it can weigh heavy on the organisation thus rendering it unserviceable and not effective to serve its cause. (Thomson) However, the difference between the two concepts being too small they can be discerned as operating at crosses purposes. Strategy is supposed to be the internalisation of market functions of competitiveness into the system to make it more effective with a lean environment and PR a home-grown idea to make it achieve its objectives efficiently through successful implementation of small aims unit wise. Only when the company fares well in a competitive environment that the strategy is said to be successfully implemented. It is ostensible affairs with all divisions and hierarchical order putting to use the best of their abilities to achieve the goals of have an organisation that have been described at the top and are percolated downwards. There is hardly a scope of ’ifs’ and ‘buts.’ However it shouldn’t be construed that strategy hardly takes care to ascertain its own capabilities, resources and manpower. Rather on the hand it may entail ‘sacrifices’ for achievement of its higher objectives that may not be discernible at all levels of hierarchy. Since PR gets its feed from externalities and works in a bottom upwards mode it is not seen with the scepticism of strategy. PR and Strategic planning converge in the organisation to create a ‘strategic-fit’ where there is a ‘proper-fit’. This in terms of management practitioners is called the strategic-fit. It is largely the achievement of a strategic-fit that spells the success and failure of an organisation. Strategic fit is only achievable when a companies’ objectives match its abilities. Thus Strategic planning and PR are the outcomes of two successful operation that interlinked to each other. Not just mare linkage, right strategies based on true information through good PR systems leads to fast growth as in the case of Rynair and Easyjet (Thomson) but can become total failure as Swiss Air and Alitalia. There are examples of failed companies like BSB that became successful in the same environment with a different strategic deployment of resources like the British Broadcasting System (BSB). Recent years have seen companies perform well in diversified environment since they were flatter and both PR and strategy became ‘horizontally travelling’ ideas than vertically imposed plans that apparently seemed to work at cross purposes. “Ideas diffused throughout the organisations in a fluid manner. The mission statement ensured that the companies adhered to their ideas while becoming more slick, alert and adapting to the evolution of new circumstances. This seemed quite like ‘survival of the fittest’ environment in the new evolutionary environment. The species or companies that took change in their stride survived and those that failed to implement and adapt to change perished. It is quite understandable that flatter organisations are more adaptable to change. “The key change was emphasis in business unit and corporate strategy.” It becomes quite apparent to understand that a flatter organisation is more adaptable to change in a new environment than a company working on traditional model. More men handling money and materials with concern for the company made it more strategically fit. PR provided the information through customer interface, inherent abilities of the company. The idea was first mooted by Michael Porter in his seminal work “Competitive Advantage.” What started as an academic exercise became a business model in practice. The organisation became more empowered at the business unit level. “The important questions: How we will compete? How we will become more profitable became a concern of a business unit rather than top management alone?” (Thomson) Companies that are flat in structure and less hierarchical in their working became more efficient with right resource allocation through “cohesion and communication.” Performance target became readily understood by the managers and employees and achieving them became each individual’s personal prerogative than a top-down driven approach. The people who wielded the greatest strength and information feedback became the central performers of the companies strategy. The internal environment of a company became more synergised with a firm wide cohesiveness in thought and action “Hopefully, we can readily apply Rob Grant’s framework of simple goals, understanding of the environment, understanding of resources/capabilities – which in turn are married with effective implementation – to different settings and examples of successful and unsuccessful strategic planning.” (Thomson.). Now we will study the flattening of structures, its extent and scope, effective difference in theory and practice. We will analyse Tesco as it is today, define and design its Public Relations Strategy. Andrew defines strategy as “Strategy is the pattern of objectives, purposes or goals and the major policies and plans for achieving these goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be.” Grant describes it as a means to winning; and increasing the long-term profitability of the company.” I. SITUATIONAL Analysis. I. We will use the aforesaid definition of information, ideas from the Oliver booklet do a situational analysis of Tesco and suggest measures for working of Tesco in a changed environment. Tesco situational analysis through Michael Porter’s Five Forces Model reveals that company is facing 1. Facing threat of New Entrants. The world is shrinking and more and more companies from Asia and America are staging entries in European Union and Great Britain. The threat of new entrants in retail has to be studied as a public relations exercise by providing information about how the new entrants are different—what kind of sales and advantage the company provides to the customers. This can be done through customer surveys to ascertain their preferences and drawbacks they find in the Tesco’s environment. 2. Buying Power The company needs to ascertain the buying power of the customer in UK and in countries where it has established. The buying power can check at and classifying products according to their cost price 1. High end 2. Low-end 3.Middle. This data when studied with the relative income group can help the company to target specific-income groups and control the inventory levels. 3. Threat of Substitute Products: Threat of new substitute can be mitigated by environment scanning. One of the most formidable challenged that the retail factor faces is to decrease carbon footprint of products. Tesco should classify it high carbon foot-print product and low carbon footprint products and study their sales. 4. Bargaining Power of Buyers: Since the company deals in retail it is hard to assess the bargaining power of buyers. However, a macro-economic analysis of the country and region of Tesco’s operation can reveal the bargaining power of retail buyers. II COMPETITOR Analysis 1 Competition Analysis: The foremost competitors of Tesco are Asda, Sainsbury, and Morrisons. Waitrose is not for behing. Asda, the UK arm of Wal-mart has ability to give the maximum competition to Tesco. Their slick and fast supply-chain arrangement can be a threat to the gigantic Tesco still relying on its traditional supply and distribution mechanism. Tesco also faces a stiff competition from concevenience and grocery store that accuse it of bulldozing their survival by price undercutting. A spate of allegations led the matter to Competition Commission that has framed tighter regulation for chain-stores. III The Analysis of Tesco: 1. Grocery Retail The industry analysis of Tesco reveals that it is the most dominant player in grocery retail. It employs about 10,0000 people . Its profits are nearly ₤ 2 billion . Consumer Demand. Tesco is known for its notoriety in the market for price undercutting thus it has often been accused of selling cheap labour products. However, Tesco studies the market behaviour of its customer and doles out “Everyday less Prices” for particular products. However it can make its grocery retail by studying the local demands and then increasing or decreasing the demans as per the store. This would entail more store level and division level decision making. 3. Use of Technology : Tesco is known for its state-of-the-art use of technology to further its sales. However, inside the stores most of the products are handled individually including managing the price counters. Tesco can thus decrease its manpower in the era of rising health care and welfare costs. Tesco uses its personal freight of vehicles to support its logistics and even manages cold storage supply chain across the continents. Thus Tesco being a centralised organisation doesn’t source products directly from the local producer but relies heavily on technology for movement of its goods. 5. Careful Watch on the Competition: Tesco scans the market at the macro-level moves swiftly to capture new territories in Eastern Europe and Asia. It has always faced problems locally. In Thailand the company had to change its shelf-policy because the customers liked to purchase from heaps of vegetables and fruit. This is one of the biggest examples of PR meeting strategy and company formulating a policy through both. Similarly, Tesco is facing problems in China and East Europe. One of the most landmark decision of Tesco is to appoint a Pole as the head of its operations in Poland. In China it is still working hard to study the consumer and market behaviour. The shortcoming can again be translated into not achieving the proper fit of PR and Strategic behaviour. IV Stakeholder Analysis: 1. Investors: The chief stakeholders, the investors, of the company are represented by the Board of Management. The Board of Tesco is led by the Chairman. Tesco is often accused of leveraging its proximity to the UK government to get favours. However, when such actions became apparent, Tesco had to make a quick retreat. It can be reasonably argued that Tesco protects the interests of its investors at all costs. The profit of investors is paramount in Stakeholder analysis. 2. Employees : Tesco employees are one of the trustworthy teams of the corporate world. Tesco team is highly motivated and serves with a smile. But since it doesn’t have any role in strategising and planning their worth is underutilised. All discount schemes, price-cutting, maintenance of inventory levels come in top to bottom approach with employees having little or no role int. However, if the employees are involved more in strategising, the company can generate a fit between strategy and PR. PR issues are dealt with locally by employees and feedback is transferred upward. This is an outdated and mechanistic approach the makes Tesco a top-environment.Employees not given holdings in form of shares depending upon their loyalty to company the time spent and emoluments. This has practically been applied by its competitor Waitrose that call itself a ‘firm of partners.’ Customers: Customers prefer Tesco because of its Every day low prices, quality and value added products and vantage collection. Tesco store is located everywhere in the local square, on the suburbs, on highways, little towns making it accessible by foot or on a vehicle. However, consumer preferences are hardly cared for in the din of slogan ‘Sell them cheap; and pile them high.” Of course quality is lost in this philosophy and the customers can easily turn to other suppliers. There are no Tesco Consumer forums where they are given a voice to be heard. Local consumer forums and local Tesco teams can meet on regular intervals to know the performance of companies. Society: Tesco understand its responsibility for society and makes donations to the charities. It organises marathon runs to generate money to help the elderly and the handicapped. Tesco supplies computers to schools that it adopts. The company is also concerned and taking remedial actions to reduce its Carbon foot-print. Non-Government Organisations: Tesco interacts with non-government organisations like charities, groups and activists to fund activities that are good for the society and the less privileged. However, Tesco requires working more vigorously and creating a global help policy where the problems of the poorest of the poor can be redressed. Tesco has often sought certification from third party NGOs as a proof of not employing child labour or exploitation of labour to lower its prices. V. SWOT Analysis: Tesco:Tesco is the leading brand of UK and its strength lies in UK. Its slogans like “Every little helps, Pile them high; give them cheap” has really helped it to grow as brand. Tesco stores are spread out all over the UK. All age-groups and income groups rely on Tesco for their common utility products. In UK, Tesco makes home deliveries of products on battery operated vehicles Weaknesses : Tesco is straddled with a workforce of 100000 employees and it has to dole out heavy costs for their health and welfare policies. The newer retail chains work with smaller and leaner work forces. The company has not been successful in the Western Europe. Its US branch is still solving its local problem and has not registered any strength growth. Tesco is facing stiff competition in Asia especially China. Tesco is one of the foremost contributor to the landfills that create methane. Its cold freight supply chains and refrigeration is charged to be a major contributor to ozone layer depletion. Further its own fleet of trucks are contributing to the pollution because of lack of Operations Research. Opportunities: Tesco has been slow in exploiting the Eartern European and Asian markets. The company doesn’t understand the local traditions, language and culture. In some country big store retailing just doesn’t exist. The new avenues that are opening up for Tesco require heavy deployment of PR policies and use the feedback there and then to make strategically viable atmosphere. Tesco can easily expand into the organic product market because of its high value retail stores, extensive supply chain network, freight carriers etc.. The impression of Tesco being a fair and honest supplier has developed over long years of its presence but the brand Tesco is not growing at the top-speed by value addition of new products especially with lower carbon foot-prints. Threats: The first and foremost threat to Tesco is at its grown market. The company is facing stiff competition from the local chains. Its price-cutting measures have earned the company a censure of the Competition Groups. It is often made a butt of target for its anti-grocer, and environmentally unhealthy climate. Abroad, Tesco has not been able to set up retail shop either due to the local laws or lack of knowledge. Tesco doesn’t provide its employees with stock holder option and hence they can easily move to the competitors store. Though Tesco is taking steps to provide for sustainable product, yet green-groups feel that nothing more is done than sloganeering. The activists have also traced it supply chains to poorly paid children doing lowly jobs. Of course, it was found that Tesco wasn’t involved but still the contractors working with Tesco supply chains are using child contractual labour. Final Analysis of SWOT One of the major conclusion we can make from the SWOT analysis of Tesco is that it has strongly centred strategic management system with a very feeble and meek PR. Tesco has to learn to strategise according to the feedback from the Public Relations programmes. This can only be achieved by flattening the environment in the corporation and line managers, unit managers be given more decision making powers on the PR feedback. Such decisions can be moved upwards and make the perfect fit with the strategies and PR of Tesco. Tesco is well-ensconced company and it move really fast on implementing Public Relations and Strategic Divisions. VI Objectives: The major objective of the Tesco Strategic PR is to integrate its world wide operations, bring them in consonance with local culture, remove drawbacks in its service and provide a Pan- World presence. One objective is bring all the stake holders closer to each other and help them make common decisions. This would not only retain its presence as a leader in the UK but make it a world leader. Its corporate social responsibilities will become more focussed and more global. VII Strategies The new strategies will help the Tesco to improve its working bringing about cohesion in its work force, supporting life-long customer loyalty, spread its reach far and wide and become environment friendly and more transparent in its operations. esco can decrease its overheads by supplying products locally and encourage customers to buy products with local carbon foot-print. VIII Tactics. The basic tactics of strategising to do a thorough market research about the prevailing standards of the company, the acceptability of its products, deficiencies in their quality and required level of products for a particular product line. The product line can be diversified by providing ‘greener and organic produce’ products that are not only economically stable but also useful for the society. Carbon foot prints should be provided over the product so that the customer realises as how far he/she is contributing to the carbon neutrality of environment. Tesco should mover faster into Indian and Chinese Retail Markets that still have a big potential in the retail sector. Carrying or using plastic bags should be banned totally. At the end of the year an environment-friendliness report should be produced like the financial and corporate responsibility report. This will help Tesco to show case its achievement even on the environment front. IX Action Plan The Action Plan of Tesco is simple, to keep on capturing new markets while consolidating hold over the present ones. The companies “Every day Low Price” caught the fancy of UK market and similar experiment can be repeated in the new territories. The company can also issue Franchising in countries where laws regulate the direct entry of the foreign retailers. The company should develop more close relations with customers, stop the usage of carry bags, and emphasize on low prices and high quality. Consumer forums can be made in each region where the consumers get to air their voice of concern and new requirements. Occasionally some customer can be involved in sight-seeing projects where Tesco is undertaking socially responsible activities. The retail business can become boring by repeatedly doing the same job over and over. Fun activities between the families of staff members can be organised to show the interest of the company in each member. This will result in greater cohesion in the Tesco team at the each level. X Control Company can keep control over all the above mentioned activities by monitoring reports in the local newspaper and magazine reports. In fact these reports are always unbiased opinion of the journalists and writers who express themselves on the prevailing circumstance and future. Such reports can provide insights into the future strategizing of the company and plug loopholes. In fact adopt a school programme is a very attractive way of catching the future customers in the class rooms. With brand Tesco providing certain schools providing them with basic needs help the company to permanently cast an impression on the minds of the children. Periodic review of such activities can be helpful in ascertaining the efficacy of the school programme and overlook whether student are actually getting the benefits at all. Advertising by far remains the most attractive way to lure the customer. But advertising can only be managed by specialised campaign contractors. The advertising professionals in fact guide the company to go in for what kind of mass campaigns that can be run. In fact it should be a mix of visual, audio-visual and road hording. Tesco takes part in lot of socially responsible activities including political parties. Such activities of Tesco is embeds in the very psyche of the country. Carrying out socially useful productive work helps the company grow in two ways. One, it gives the impression the company here is not just after profiteering. A good company pays back to the society, which has made it a brand. Such events should be covered extensively by the media. References: Andrews, Kenneth (n.d) Definitions of Strategy, The Concept of Strategy 2 Corporate Social Responsibility, Tesco Plc, Report Accessed 13th August. 3. Edward Roberts, Supermarket food: unhealthy, unjust and unsustainable, The 4. Robe Edwards Website, Accessed 13th 2007 http://2008/02/supermarket- foo.html 5. Mesure, Susie (2007), The Independent Critics attack Tescos new monopoly test, “The bnet Website” http://findarticles.com/p/articles/mi_qn4158/is_20070403/ai_n18785282 Accessed 13th August, 2007. 6. Porter, M (1985), Competitive Advantage, Free Press 7. http://www.tesco.com/ “The Tesco Website” Accessed 13th August. 8. Telescopoy.org., A Website of Alliance of organisations concerned with negative impacts of super market power, Accessed 13th July 2008http://www.tescopoly.org/index.php?option=com_content&task=view&id=42&Itemid=176 12. Thomson, G. (n.d) g.Thompson@londonmet.ac.uk Read More