The Stages Strategic Analysis Business Essay


In secession 1 we overlook the stages strategic analysis of an organization and also business ethics. According to me the main purpose of an organization is not just to contribute to earn profits for their shareholders but also contribute to the society they are functioning by following the rules and regulations.

The basics of a strategy are setting a main purpose for which the organization is functioning. A future plan should be drawn by setting objectives and a vision to what the organization is going to achieve in the future and stand after a few years with all the available resources and skills and making the best of it to gain a good market standing.

There are a couple of stages in a strategic hierarchy the very first would be at the corporate level which is basically setting up a goal for which the company is functioning, Strategic business unit level is using a tactic to compete in a specific market and the last would be the operational level which involves resources, equipment etc their usage to attain optimum competency.

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The process of Strategic Management comprises of three things namely it starts off with analyzing the opportunities in the environment and picking out the right choices and executing those choices in an appropriate manner.

Strategic planning is a very vital procedure for an organization as it helps to scan the environment and identifies the threats and weakness and helps to convert them into strengths. It enables the firm adapt to the environmental changes. There are two major stages involved in strategic planning are the SBU and the product level which are subdivided further into areas such as business mission, internal and external analysis, SWOT and PEST, operational objectives etc.

In a dynamic environment the PEST analysis acts as an essential tool as there are a few macro external environmental factors which have to be considered and to analyze them the tool of PEST needs to be used, which comprises of political, economic, social and technology. This analysis helps to keep up with the current changes happening in the environment.

Porter's five forces include new entry of a competitor in the industry, if the supply is high then the customers have a higher bargaining power, homogenous products, the bargaining power of the suppliers and the market competitors. The three basic strategic options a firm has is firstly the growth of the organization, then comes stabilizing the activities at a consistent pace, and thirdly is retrenchment which is basically reducing the intensity of activities happening in the firm. The Boston Consulting group matrix indicates that few people portray different traits; they end up to be Leaders, Challengers, Follower, Nicher.

Control can be put into three folds which can be explained as evaluating the performance against the objectives set, then analyzing the problem of deviation from the objectives and then taking corrective measures to achieve desired goals.

Every organization has a mission statement which states the purpose of establishing the organization that differentiates it from its competitors.

Secession 2:

In secession 2 we over look the areas of organizational structure, the organizational design, the factors affecting them and the determinants of the respective. We have seen various types of organizational structures which help to determine the working relationships between the employees and it also shows a clear picture of the reporting line ups and the authority links between the employees.

An organizational design is created by the upper management in order for the company to operate in a highly efficient manner. The design of the organizational structure is highly dependent of a certain factors such as functioning in a dynamic environment, the constant advancement of technology, availability of skilled human resources and the type of strategy the company uses. It would be highly recommended to have a decentralized authority functioning in a very flexible type of organizational structure which in turn is compatible with different strategies such as vertical integration, diversification and differentiation.

A flexible structure will help the organization to keep up with the technological advancements but at the same time the advanced technology might end not be user friendly, this might affect the performance of the managers as they might end up in a state of confusion. There are various types of structures which the organizations adapt to depending upon a few factors and their compatibility such as:

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Functional structure which is suitable for a stable environment, it can be adapted by small as well as medium sized organizations and it aims to ascertain efficiency and quality.

Matrix structures are very suitable for a dynamic environment as its easily adaptive but very complex when it comes to reporting relationships and often creates conflicts between the managers and the staff.

A Network Organizational structure is basically a multi matrix structure which is suitable for a dynamic environment, it is mainly outsourcing of human resources this can also be referred to as Strategic Alliances, this helps reduces cost and makes managing the employees easier.

Hybrid structures are mainly adapted by large organizations making it easy for the managers to create their own divisional structure. It makes the organizational structure flexible on a whole. Strategic alliances is basically bonding between two organizations on based certain terms and conditions in order to bring up a product.

Moving onto Job design it is the grouping of the tasks delegated into specific jobs. The two aspects of Job Design are Job Enlargement and Job Enrichment. Job enrichment is motivating the employees by giving them a chance to make use of their abilities and skills to the betterment of the organization. Job enlargement refers to increasing the horizon of job responsibilities and duties within given framework.

There are a few factors which affect the satisfaction, motivation and the performance of the employees. These factors can be described as skill variety, task identity, task significance, autonomy and feedback. If these factors are used in a positive aspect towards the employees then maximum efficiency can be attained by enhancing their performance individually.

Jobs can be grouped by managers based upon workers with similar job functions possessing same skills and knowledge related to the tasks. Authority is the power that the manager possesses to allocate and use the resources efficiently. Hierarchy of authority is basically the power that each manager has in the organizational structure.

Incase if we want to change our organizational shape we need to go through a process of restructuring which is of three types: Downsizing, down scoping and Leverage buyouts.

Secession 3:

In secession 3 we overlook the analysis of strengths, weakness, opportunities and threats of Robin Hood. He has identified his strengths, weakness, opportunities and threats in order to take appropriate measures for his threats and convert them into opportunities. We saw the TOWS matrix where he has tried all combinations of SOWT. Now we have a clear picture of exactly what Robin Hood has to do. We come across another tool for analysis termed as the "VRIO" framework (Value, Rarity, Iimitability, and Organization).

Value mainly concerns the reputation of the organization that is it worth buying the product at such a high price, if it's a viable option then definitely people would purchase it. Rarity may lead to high competency levels in the market because the resource maybe only available to a few which also depends upon the price. If the resources are scarce we know that the possession of such resources will not be any cheap especially if it is intangible, this gives the possessor a competitive edge over the rest. The resources available to the organization can be utilized in a efficient and an effective manner depending if the organization structure is aligned and designed in an appropriate manner.

Competitive dynamics is a type of strategy used by firms when there is a lot of competition. It has two aspects under it, firstly the No change response which is basically that the organization does not really bother doing anything because it might not be as efficient as the competitor, scarcity of resources, different market segment etc. Secondly we have the Change responses which indicates that the organization would try to catch up to its competitor and try leading the market by whatever competitive edge it has got over its competitor.

For an organization a PESTLE analysis is very vital aspect as it basically helps analyze the external factors of an organization such as political: (Government rules and policies), economic (employment patterns, growth), socio-cultural, technological (advancement in technology), legal (business rules and regulations ) and environmental (depletion of resources, pollution etc).

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External analysis helps to foresee the future standing of the organization as its helps to understand the competitor strategy which will lead to discovery of areas of above average profits by converting threats into opportunities.

The structure conduct performance is based upon industry structure, firms conduct and performance. The industry structure oversees the feasibility of entering and exiting the industry where the competitors have similar products. The firm should not indulge in any malpractices in order to gain market leadership over its competitors. The position of the organization in the market against its competitor's weather it's a market leader or a follower and does it fare any better in terms of the society's responsibility.

To conclude this secession we will also speak about Porters five forces which include the entry, market competitors, substitute products, suppliers and buyers. There are a lot of entry barriers for a firm to enter a particular industry such as price advantage, scarcity of resources, policies of the government, and product differentiation. The existing firms have a upper hand because they have a set client tail and have proved their customer loyalty in terms of services, price, value of the good and reliability. A new comer in the market might feel lost with the ongoing competition of the marketers with different products but which have the similar use to it. The suppliers of resources might already be confined to contracts and a lower price with the other existing competitors. Buyers would have to be bribed with a lot of attractive offers as their minds would be set of the products and brands which already exist and matches their satisfaction level.

Secession 4:

In secession 4 we overlook the Strategic Group mapping which helps the organization to know its market standing. We also browse through various types of competition in this secession to get a clear picture of what category of competition the organization falls under.

At first we come across monopolistic competition in which we have homogeneity in the products but they are not exactly identical (eg. automobile market in U.K). In monopolistic competition there might be a lot of competitors as the products can be similar but not exactly the same and the entry and exit of organizations in such a competition is not much of a problem cause of its high competency level and product differentiation. Oligopoly on the other hand only has a few competitors in the industry which makes it easier to grow. The products out here can be similar and might be the same as well.

Strategic groups are a set of companies grouped together within the same industry who cater to the same market segment and are compared against each other on the basis of the price, quality and value of their products. Once we have grouped these companies together we need to map these companies which will access them on the basis of price and quality, pricing policies and no. of stores, advertising expenditure, product range, market penetration, distributors etc. and this will determine which the best one is out of the lot. By my understanding in the U.K in the children clothes retailers ''Next" is the leader among the strategic group in the aspects of price, quality, number of outlets and product range even though the majority of the market share is possessed by "Niche Retailers".

Strategic group maps have a few pointers which may be good for the competitors or it can be devastating, like the competitors cannot enter another strategic group or it cannot exit easily. The profit generation in the group might vary upon the strengths, weakness, opportunities and threats of the competitors and hence the competition will increase.

Secession 6: