An Evaluation of the various Strategic Choices


"Strategic choice is the 3rd logical constituent of the approach formulation process. Selection is at the most important part of strategy formulation. If there are no options to be made, there be able to be little value in thinking about strategy at all." On the other hand, there will always, in practice, be limits on the range of possible choices. In general, small enterprises tend to be limited by their resources, whereas large enterprises find it difficult to change quickly and so tend to be constrained by their past. In large corporations, managers may find their range of choice limited because some choices are made at a higher level or in another country. In the public sector, the genuine strategic choices may be made by politicians so that the role of the manager is limited to devising how best to implement strategies rather than to ponder fundamental choices of future direction for themselves.

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Good strategic choices have to be challenging enough to keep ahead of competitors but also have to be achievable. Analysis has an important role in making strategic choice but judgment and skill are also critical. For instance, sometimes it may be better to delay making a decision whereas at other times a wrong choice might be superior than taking no decision. Strategic choices that remain alternative might be preferable in an unsure prospect to distinct strategies that depend for their success on uncertain events happening. Such judgments require wisdom as much as analytical skill.


To examine and evaluate a real life example of how organizations have pursued methods of development to achieve success.

The main objective of the current research is to identify the strategic options and evaluate strategic option.

Organizations selected are: 1. From IT and computing: DELL.

2. From Auto and Energy industry: BMW


Strategic issues:

The general direction that the organization must head in and the level of performance it must exhibit to satisfy its crucial stakeholders;

The principal threats and opportunities in its operating environment, in particular the factors impacting on its financial performance, and forecasts or scenarios for how these may develop in the future;

Arising from its position audit, an assessment of its principal strengths and weaknesses in relation to these threats and opportunities;

An understanding of the contribution to its earnings from its portfolio of products and customer groups and how these may change in the future as their life-cycle plays out.

The next step is to decide how to develop the business in the future. This involves deciding on development strategies.

Some illustrations:

Basis of choice. This is sometimes called the choice of competitive strategy. Effectively it decides the business methods that the firm will utilize to win customers and beat rivals. Note that this will be formulated within the framework of the broader aspirations, or mission, of the business.

Alternative directions. This deals with the future of the product and customer portfolio of the business. It will also involve issues such as international extension of the business.

Alternative methods. This considers how the firm will gain access to the products and markets it wishes to develop into. The decision may vary according to the development concerned, but the decision usually hinges upon the four considerations of investment cost, speed of access, know-how and control.

Mergers and acquisitions:

"A merger is a grouping of two companies to structure a new company, while an acquisition is to obtain of one company by another with no new company being formed." A merger happens when one firm suppose all the resources and all the liabilities of another. The acquiring firm retains its identity, while the acquired firm finishes existing. A greater part vote of shareholders is usually essential to agree a merger. "A merger is just one type of acquisition." One corporation or organization can obtain another in several other ways, counting purchase some or all of the company's possessions or trading up its exceptional shares of stock.

In common, mergers and other types of attainment are performing in the expectation of understanding an economic gain. For such an operation to be defensible, the two firms concerned have to be worth more jointly than they were not together. Some of the possible compensation of mergers and acquisitions consist of attaining economies of scale, join balancing resources, acquire tax benefits, and eliminate inefficiencies.

For Example:


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Dell Inc. is cranking up its mergers and acquisitions process, presently as contest for technology contracts starts heating up again. Whereas Dell representative have publicly supposed they wish for to do additional deals, they gave a small number of specifics. But Chief Executive Michael of Dell expects his company to attain a "significant-sized company" in approaching years.

"The computer manufacturer desires to enlarge its data-storage and tech-services businesses, according to public who encompass in recent times spoken with its chief financial officer, Brian Gladden."

It isn't apparent whether Dell is at present engaged in merger discussions through any companies, although Dell has had continuing discussion among bankers for the past two years, say people recognizable by the matter. Dell Inc has acquired ten companies (eight of them based in the United States), procured stakes in four companies, and divested two companies. Dell reached an agreement with office supply chain, Office works (part of Coles Group); to stock a few modified models in the Inspiron desktop and notebook range.

Dell Inc acquires KACE Networks Inc [pending, proposed on Feb 11 2010]:

US - Dell Inc decided to acquire KACE Networks Inc, a Mountain View-based supplier of system management domestic device technology services. Terms were not disclosed.

The company expects to expand its management contribution for small- and medium-range businesses through the acquisition, Dell said in a statement. "Kace propose appliances planned to help achieve tasks like inventory management, asset management or configuration management, the company said."

"Dell has been doing attractive things in the server space, which consist of mounting its services and support services that could afford the corporation incremental proceeds," said Charles King, principal analyst with Pund-IT. The services model has worked for competitors including Hewlett-Packard and IBM, and Kace's acquisition helps Dell systematically build its remote management services portfolio.

The server appliances from Kace can help Dell manage systems from a distance so they are not putting undue burden on customers, King said. After initial deployment, the appliances will help Dell tweak servers from a distance. Such support services could be especially appealing to small and medium-size businesses, which look for shorter engagement times to achieve mundane tasks like fixing systems or patch management.

Kace's Kbox appliances are also able to improve end-point security through patch management, security-policy enforcement and vulnerability scanning, Dell said.

Dell Inc acquires Exanet Ltd (pending) Jan 13-2010

ISRAEL - Dell Inc of the US planned to acquire Exanet Ltd. Looking to extend its reach in the storage space, Dell said it has put a bid in to purchase clustered storage vendor Exanet for an as-yet undisclosed amount.

"The transaction has not yet been approved by the Israel court, so we won't speculate on its completion or timing," the spokesman said in an email response to a Computerworld inquiry.

Dell has had a long-standing reseller and manufacturing relationship with EMC, selling its Clariion line of mid-range storage arrays. More recently, Dell began selling its own line of iSCSI-based low-end and midrange storage arrays after it purchased Equal Logic in 2007.

Exanet's U.S. headquarters is located in New York and the company also has offices in Europe and Japan.


One of the most high profile examples of BMW acquisition activity was its purchase of Rover and Land Rover. The move was part of a BMW management strategy to venture into a wider product range.

However, the decision proved troublesome until the BMW management returned to a business model based on excellence and concentrated on executive cars, which paid off in profits.

The management begins with the BMW - Rover merger somewhere they have recognized strategic failings. BMW spend £2.8 billion in acquiring Rover and kept losing £360,000 annually. The strategic objective had been to broaden the buyer's product line. However, the initial joint product was the Rover 75, which competed openly with existing BMW mid-range models. The other, present Rover cars were out of date and mutually respectful, and the job of replacing them was left far too late.

Another fly in the ointment was that the stated profits that Rover had theoretically enjoyed were later seen as misleading. Subjected to BMWs accounting principles, they were twisted into losses. This paper refers to the fact that after a merger, the management span at the top becomes wider, and this could impose new strains. Due to complexity in modification to the new certainty, the need for positive exploit tends to get put on the back burner. Delay is dangerous as the BMW managers realized. While BMW set targets and expected 100% acquiescence, Rover was in the habit of reaching only 80% of the targets set. Walter Hasselkus, the German manager of Rover after the merger, was respectful of the Rover's existing culture that he failed to impose the much stricter BMW ethos, and, ultimately lost his position.

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Another failure of strategy implementation by BMW recognized by the authors was that of investing in the wrong assets. BMW paid only £800 million for Rover, but invested £2 billion in factories and outlets, but not in developing products.

Joint Ventures and Strategic Alliances:

Strategic alliances

Strategic alliances take many forms ranging from technology transfer, purchasing and distribution agreements, to marketing and promotional collaboration and joint product development.

A typical strategic alliance is a loosely structured relationship in which each partner retains their business independence while contributing their distinctive core strengths to achieve mutual benefits.

Benefits and challenges:

Strategic alliances require a long term view. They offer exciting opportunities for growth but, above all else, require commitment - in hours as much as dollars - to identify the right partners and reach agreement. Developing a strong and lasting relationship can take years.

Before establishing a strategic alliance you need a clear idea of your company's strategic direction, what you want from a partner and what you have to offer. Give careful consideration to compatibility and capability.

Compatibility matters much more than unequal size. Examine operating styles, company cultures and whether Main people can get along Ensure your partner has the complementary skills, resources and networks you are looking for

Joint ventures

Joint ventures involve two or more parties contributing funds, facilities and services to a combined enterprise for mutual benefit. A joint venture may be a separate legal entity or company or could take the form of a Heads of Agreement or a Strategic Cooperation Agreement.

They are formed for a variety of purposes including manufacturing product in a target market, providing resources and networks to penetrate and build profile in target markets and adding new technology and expertise to your product.

Joint ventures are a common way of getting around a trade barrier that is preventing entry into a target market.

Benefits and challenges

Joint ventures can achieve many of the advantages of a fully owned operation, without the long lead-time and at a fraction of the cost. Flexibility is a Main attraction as they can be molded and shaped to suit the specific needs of the partners and the markets. However, joint ventures involve a high level of commitment, both funds and time, carry a degree of risk and require a long term view.

Critical success factors include good rapport and communications channels between the partners and positive results within a reasonable and agreed timeframe.

Advantages of strategic alliances and joint ventures include:

Overcoming trade barriers reducing transport and production costs sharing risks Improving market credibility, penetration and access

In Practical-


Dell Financial Services L.P. ("DFS"), Dell Computer Corporation's (NASDAQ:DELL) integrated financing and asset recovery provider, and joint venture with The CIT Group Inc. (NYSE:CIT) (TSE:CIT.U), reports lease originations recently passed the $3 billion mark while celebrating its third anniversary on April 14, 2000.

Dell Financial Services opened its doors to Dell customers in April 1997. By November 1998, DFS reported it had achieved $1 billion in lease originations. Just over one year later and within days of its third anniversary, DFS has tripled that number to over $3 billion. DFS has more than 340,000 lease contracts and a managed portfolio of over $3.2 billion.

"Dell Financial Services has grown to remarkable heights in its young life," said Michael Watt, President of Dell Financial Services L.P. "We have strived to integrate our goals and services with Dell's initiatives and that has proven to be successful. Because of our direct relationship with our customers, we have the unique opportunity to really listen to them and continually modify our processes to better suit their needs. In fact, we've talked to over a million prospective customers over the last three years -- something the channel-centric companies don't have the opportunity to do. We look forward to continued rapid growth."

DFS is a joint venture between The CIT Group, the world's largest publicly owned commercial finance company, and Dell, the world's leading direct computer systems company. DFS has financing capabilities in 30 countries in North America, Latin America, Europe and Asia/Pacific.

DFS provides an array of services ranging from simple hardware leases to complex technology finance agreements that may include software, extra support, installation, and asset recovery services.


"…SGL & BMW appearance Carbon Fiber Joint Venture..."

The joint venture will be prearranged as pursue: SGL Group embraces 51%, BMW Group 49% of the shares with both associates propose organization on an equal basis. Necessary decisions necessitate on common approval. In the build-up stage the joint venture will be combining at equity by both corporations with reserves totaling € 90 million. BMW Group will utilize its constructive right to use to the capital markets to assurance the financial support of the money due financing for the joint venture. In cooperation those companies will do contribute first equity of € 18 million.

The general asset for the joint venture will total to just about € 230 million subject matter to BMW Group corroborating all stages of growth. BMW Group - as formerly the only customer - guarantees smallest amount purchasing volumes at contractual decided conditions in the context of conservation the overall project.

During this joint venture, BMW Group will lock access to Main technologies and raw materials that will be utilized in the 'Megacity Vehicle', at present Manufactured. For the first time, carbon fiber amalgamation will be utilized in an unexpected measurement in the great scale manufacture of automobiles and will obtain the majority of important role in the substance mix. The huge scale utilize of high performance materials similar to carbon fiber based fabrics Product developed for utilize in automotive claim has clear weight compensation and facilitate to reduce Carbon dioxide emissions.

Sustainability and Recycling

Ecological, societal, and economic characteristic will be united along the complete supply chain. Carbon fibers and fabrics will be manufactured with careful deliberation to environmental resources. Inside the condition of the joint venture, procedure is being urbanized to reprocess carbon fibers and fabrics.

Main Threat facing by the Organizations:

In an unstable market, for instance personal computers and manufacturing products, threats abound. Products alter in a continuous sometime daily basis. New products and improvement are bringing in at a lightning speed. It is necessary for association consequently to be at all times on the lookout intended for new belongings or bring in new yield.

The threat to become outdated is an exciting actuality in all business. Not only is that, companies required to make products that are high in quality but low in price. This is one of the biggest disputes that associations are having.

Threat facing at DELL:

One of the principal outside threats to Dell organization is cost dissimilarity among brands is becoming smaller. Dell's Direct Model draw customers due to it save cost. Because opponent corporate companies are able to put forward computers at low costs, this might make threats Dell's price-conscious mounting customer base. Among almost indistinguishable prices, price dissimilarity is not any more an issue for a customer. They might prefer other brands as an alternative without waiting for Dell's customized computers.

The enhance velocity of the computer manufacture industry is also get slow down. Now in market, Dell has the major share of the market. If the insist slows down, the opposition will grow to be stiff in the procedure. Dell has to work doubly hard to distinguish itself from its alternate substitutes to be able to persist holding a significant market share.

Technological progression is a double-edge sword. It is a chance as well as at the same time it is a threat. Low-cost management strategy is not any more an issue to computer manufacture companies consequently it is significant for computer manufacture corporations to hold their place from the rest companies.

Technology circumstances that the most up-to-date and greatest products are constantly the most popular. Dell has to always sustain with technological improvement to be able to compete.

"Dell Computer Corporation started in 1984 by Michael Dell with this very simple premise as its basic foundation: those personal computers could be built and sold directly to customers and by doing this, Dell could address their specific needs and provide the best computing solutions that meet those needs."(Faulkner, D. 1992)

Dell's Direct Method provides two distinct advantages:

dropping marketing and sales cost by purging markups of distributors and merchant and

Building to order compact stock costs and risks of maintaining record.

Dell's Direct Model is the major grounds why DELL has accomplished its stellar status in business today. This model allows Dell to interrelate among customers honestly providing them with fast, inexpensive and responsive means of manufacture and distribution.

Main Treats Facing At BMW:

The Main objective facing by the BMW Region is in moving forward is intensification its economic competitiveness although sustaining the superiority of life and energetic community assets that at present defines the region. To attain this goal, innovation and knowledge ability must be underpinned and the region's infrastructures have to be improved.

Loss of jobs during economic reorganization, mainly in low tech sectors.

opposition from the rapidly growing economy and the organization of the other part of the country

Loss of Structural Funds and lower superior support tariff for the region

Few R&D oriented corporations and a comparatively small share of countrywide third-level infrastructure and manufacturing connection could slow down ability to participate in knowledge economy

be short of of adequate high-skilled service opportunities to maintain people in or magnetize people to the region

Globalization is recognized as a major influencing factor on the future shape of the economy, society and environment. Aided by economic liberalization and the rapid acceleration of technological change, it has enabled greater access to global markets; increased economic growth; the development of new products, services and technologies; greater consumer choice and demand; improved living standards; increased international travel and cross-cultural understanding.


Strategic choice is the third logical element of the strategy process and has a central role. The process of choice can only be described as deciding between different options but this makes the process neater and tidier than it really is. There are likely to be possible options about product and services and about market segments defined by both customer need and geography. There will also be options on what resources and capabilities are needed and how to build these implementation options. Indicators of what is possible and what is required may well follow from the results of a strategic assessment.

There are different choices likely to be inter-related so it is compulsory to find a small number of strategic options which is made up of exact related options. The strategic choice involves comparing strategic options both logically and politically. The Strategic issues have to be associated, acceptable, and feasible. If more than one is there then the strategic options that congregate these tests, they will require to be compared. It is unsophisticated to treat strategic choice just as the logical contrast of strategic options. The procedure of decision is also political. It is significant that those who will be crucial to put into practice the strategy support the alternative made.


This report presents an in-depth business, strategic and financial analysis of organization with example... The report provides a complete insight into the company, counting business structure and operations, executive biographies and Main competitors.