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Strategy can be a described as a combination of plan and scope of an organisation over a long period of time and designed to achieve a particular objective.
Henry Mintzberg (1987) suggested that strategy can be defined as five Ps (Plan, Ploy, Pattern, Position and perspective).
A strategy is a plan to achieve a particular goal and it is a guideline to reach the goal.
Example: students have a plan to pass the exam and get success.
Strategy can be identify as a ploy. A process to implement difficult situation.
Strategy is a pattern, a pattern in a specific action. By this definition we can end up with an example like if a car manufacturing company plans to make a new model which should be black there is a strategy.
Strategy is a position in which the organisation located. It is important for an organisation.
A position can be predetermined and through plan and ploy.
While the position looks for an organisation's external environment then strategy as a perspective looks for the internal side of the organisation. Perspective looks for the efficiency of the business.
2. Benefits of strategy
Strategy can help the organisation to set the goal for the future, strategy may set the ambition for the organisation by providing how to run the company and increase profitability of the business.
As strategy is a process of planning, it may help to plan for the future. It is a plan to increase customer service and provide a real view to the employees and the real mission for the company's prospect. Strategy can help to increase the market share for the company.
Strategy also help to improve the reputation of the company, good strategy lead to success and the poor strategy can lead to failure.
3. Three levels of strategy.
Jhonson and scholes on there book Exploring Corporate strategy, fifth edition identified three level of strategy.
Corporate level strategy concern itself with the overall purpose of the business. Corporate strategy help to provide a view at the scope of an corporation and how to met the expectation of the shareholder involving with the corporation. Corporate strategy views the vision of the organisation and the expectation of stakeholder.
Business level strategy is the middle level of strategy .It is aim to increase the business value for the organisation and the stakeholder by increasing the product and service awareness. The business can focus on the pricing of a particular product and service to increase customer acceptability. It also give the proper view to compete successfully in a future.
The final level of strategy is operational level strategy. It is generally concern with how the corporate part of the business effectively deliver the business idea in terms of resources, planning and skills.
4. Distinguish between a goal, mission and a vision
Goal can be something an individual or the organisation set to achieve. It can be timely short term or long term and it need to be realistic idea to achieve in the future. Setting goal involve establishing specific realistic and timely targeted objectives for an organisation. Goal can be set for any specific time limit.
Mission is most important for any organisation it can be defined as a part of planning. A mission focus on the organisations current status, in which way it can be distinguish between goal and vision. Most of the successful organisation should have a clear mission and a mission statement. A mission statement can be articulate a company's purpose and why the company exist. A mission also describe the companies policy, companies aim and service.
Vision is a plan for future. It is a long term thinking for a company from the entry level to success of a companies strategy. A vision statement focus on the inspiration of the company and it is just like a framework of future. A vision sometimes can be described as a real picture of a company. It set the indicator for the company and rise the question "where do we want to go?"
5. Mission of an airlines.
I am choosing here easyjet plc.
Our mission is to operate environmentally friendly flights by reducing carbon footprint and designing new environmentally friendly air craft which no one done ever. Easyjet is proud to say that we are reducing emission by 27% compare to other airline.
Our next mission is to provide safe and cheap flight all over the world. It is make us unique airlines of the world.
We also provide cheap travel insurance for our customer.
We are proud to provide other services such as hotel bookings, holiday package and excellent customer service for all our customer.
Our stakeholder is value to us.
We are creating good return for our investor and as well as our companies profitability is increasing.
Benefits of having a mission statement is quite a large.
A mission statement is a clear view of the company. A mission statement shows the aim of a company which can be useful to the public as a whole.
The investor can get such information about the company from its mission statement. A mission carries the activity of a company. Its plan for the future can be reflect on its mission statement .An example, an airline company operating an environmentally friendly service that can be shown on there mission statement. Because it is there mission. A mission statement is important for the company because the stakeholder is always interested to know about the future of the business. Shareholder wants to know about the mission of the company before lending money into that company, same way the government organisation also interested to know about the mission of the company before issuing such types of licence. Finally a mission statement carries a lot of information about the company as a whole which is most important.
6. Strategic analysis
Strategic analysis is the term which clearly identify the strategic position of the business.
There are some models used to analyse the strategy are follows.
First we can consider SWOT analysis.
SWOT stands for strengths can be the positive side of the business. It clearly analyses the business success. An example if any fashion retailer selling cheap product than other by the way it can make a lot of profit and increase profitability of the business.
Weaknesses is a negative side of the business need to analyse. An example is the above fashion retailer sell the cheap fashion product and the customer rise a question about quality and decide not to buy anymore, then the company's profitability becomes lower.
Opportunities is the positive side of the business. It can bring the success of the company. An example can be illustrate here to clear that concept let say same fashion retailer selling cheap iteams and getting more customer every day and the director of that company want to expend the business by opening a new branch in different cities.
It is an opportunity of the company.
Finally threats is a negative side of the companies strategic analysis.
The following example can clear that easily, lets say the fashion retailer doing the business successfully for last few years and current years some other new seller coming to the same market so it can be affect the business.
Another model can be use to explain strategic analysis and it is PESTEL
Political factor is most important for the company. The business can be influence by the political decision. An example if the government wants to reduce the taxi stand from the busy town centre due to heavy traffic creating by minicabs. It is a political decision which can directly affect for the minicab company.
Economic factor is the major factor of strategic analysis. It include inflation rate, exchange rate, economic growth.
An example, inflation rate may deter the price of a product which may harder to export as which the product produced such countries which is affected by inflation.
Social trends can be impact on the demand for a particular product. It can be aging or any other reason. For example, fashion retailer need to analyse which design if perfect for coming winter for there targeted market.
Technological factor is most important. Technology can improve the business by introducing new product with better facilities. Technology can help to reduce cost of manufacturing a product, increase quality and it may lead to innovation.
Economical factor include climate change, weather change. Changing of weather can be affect tourism industry, in recent years global warming becoming a significant issue and it is affecting many business producing green house gas.
Legal factor can influence the company by law. Land of law can be a barrier for such companies producing such kind of product.
7. Strategic choice
Strategic choice is generally viewed as a formulation process. It help the company to make a decision by considering how strategy can be put into work. The strategic choice indicate the decision to be made in a particular planning process. It highlights the key focus area of which decision to be made.
Strategic choice approach is an interactive framework of communication and collaboration of the companies decision making process.
8. Strategic implementation
Strategic implementation can be simply described as putting the formulated strategy into action.
Generally strategic implementation includes some factor. Such as design the structure of the organisations culture, develop resources and decisions making stage. It is a plan to set the objective.
Implementing any new strategy requires flexibility of everyone to adapt the change. It is the way to set the direction in any changing situation.
9. Developing the arguments to show why strategy is important for the business
Strategy is important for the business. My chosen industry is garments manufacturing industry. The industry producing cloth and denim for various fashion outlet all over the world. The company has clear view to there product and the customer. The company got a major permanent buyer from Europe, America and Middle eastern region. In recent year the company entering for new market in southern part of America and North Africa due to increase there quality of product in a reasonable price. Here the companies strategy is most important, the company won a large number of order from the buyer and the company has a clear view to plan and organize the production. As planning is a major part of strategy and the important of plan is very wide for the company. My company has a clear plan to expend the business and looking for new market.
My company has a goal to be a market leader and producing quality product depending on the buyer choice. The company producing a large quantity of product so cost of production is getting low and company making the buyer happy to ask for a little price per quantity. That strategy made the company unique then the other producer. As fashion industry stands on the trends of society, consumer's choice and the current market situation it is clear for the company to look at the strategic analysis. It is all about the important of strategy. The strategy can help to set the goal for the company by how to be a industry leader? How to expend the market demand? And How to be the best in the market? That is the strategic choice which can make the company success. Good strategy bring the success and bad strategy can cause disaster.
10. Connection between stakeholder and the strategy
Connection between stakeholder and the strategy is the direct relationship between them. An organisation involve with a lot of stakeholder. All of the stakeholder has a particular interest over the company. Strategy can be influence by stakeholder. As the business exist to create return for the investor and shareholder it can also create the opportunity for other stakeholder like management an employees. The strategy set by the management to increase profitability and to increase the value of the business. In different ways when a company makes a decision most of the times shareholder and the management involve directly to make a decision, and the other stakeholder are indirectly connected with the company. An example, when a cashier of a Tesco scan a particular product it goes to there system and instantly all level of stakeholder know that and supplier start processing delivery, and management also aware of it. It is a part of there existing strategy. The companies strategy can be strongly influence by involving stakeholder.