Assignment on Business Strategy

    
    1.      Introduction:
Business strategy is very important for an organization as it help to attain a specific goals and objectives. It is one kind of management plan which helps to increase the performance of an organization. It shows the way to achieve goals and without this it is really tough to complete in the market with other competitors. Producing a business strategy is one of the major activities of management. But there is no guarantee of success if any organization has good business strategy and execution of this. Sometimes organization faces very tough situations but they are not responsible for those.
Organizational activities and performance depend on some internal and external factors. For that reason reviewing the business strategy is very important otherwise it is very usual to lose its momentum. Business strategy helps to gain business intelligence. From the survey it was found that every 5 to 15 years companies face a certain difficulties which need to overcome. Business strategy helps to build such a structure which will protect the organization to face the storm. Most of the expertises think that business strategy facilitates the competitive advantage to the organization.  

     2.      Understand the process of strategic planning
  2.1  Explain strategic contexts and terminology missions, visions, objectives, goals, core competencies

Strategic planning is a process which determines the organizational strategy, direction, and resource allocation for achieving the desire goals. For determining the direction of the organization, it is needed to know the current situation of the organization and what will be the future of the organization. Strategic planning has some major components and without those it is not possible to prepare a complete strategic planning.

Mission: it is the basic aim of a business or an enterprise or an organization. It describes why it exists and what it does to attain its vision. Mission statement is very important for an organization and it inspires employees to work together as a team and achieve the company’s vision. Mission statement must be in harmony with company operation. For an example, a mission statement of a charity is "providing jobs for the homeless and unemployed".

Vision: It is the outline of an organization what it wants to be in future, or where it wants to operate, or what it wants to achieve within a time frame. Normally vision statements are created on basis of long time organizational goals and future operations. Vision statement is very emotive and inspirational for an organization. For example, a charity working with the poor might have a vision statement which reads "A World without Poverty."

Goals

Goal is something that man desires, and it is an end result and a specific target. It is the main step to achieve the targets of an organization. Goal is the destination of an organization and it is the contextual planning to achieve a target. Top managements decide the goals of a company and every others persons will follow the contextual planning to attain the goals. For an example a company has 50 employees and top 5 officials. 5 officials decide their goals and set the planning how to achieve the goal; rest of the team members are acting according to the plan. So they working together and everyone is very much concern about their achievement and goals. If personal goals are achieved by the employees then it is easy to achieve the organizational goals. 

Objectives

Sometimes most of the people are confused about goals and objectives and they treat them both of them are equal but they are quite different. An objective is the measure of progress which is needed to reach the target whereas a goal is the details of the destination. Objectives are the steps to attain goals that means objectives are the part of a goals but goals are not a part of objectives.

Core competencies:
It is one of the core components of business success. Core competencies give competitiveness over other companies. If any company have competitiveness it is sure they are able to penetrate their desire market. For an insurance company, core competencies are customer service, claim processing and underwriting of the customers acquisition. For manufacturing sector the core competencies are distribution, manufacturing process, procurement of raw materials and product development. It is very essential element to attain success as it acts as cross functional business process. Cross functional business process must measure cost, time, quality and results.  

      2.2  Review the issues involved in strategic planning

Strategic planning is very important to attain organizational goals as it shows the ways to reach the targets. There are some issues involved in strategic planning and those issues must be scrutinized properly and setting priorities in terms of importance and time. Sometimes top managements face little bit difficulty to choose proper issues with respect to priorities as there are some agreements and disagreements among the opinions of those members. If there are a few incongruities about priorities and issues, it may be able to shift instantly to the organizational visions then targets. But if there is no agreement among the decision makers then it is important to indentify issue priorities and identify critical options. It can be possible in different ways and some of the ways are describing in the following section:

• First of all, board and staff can scan the internal and external environment of an organization and select some certain issues which are strategic and have great impact on the organization. They must prioritize the issues including why those issues are important, what is the positive and negative consequence of those issues and so on. All these issues might involve a wide range of other issues and programs like what will be the future demands, who will be the future customers, where they will operate and how they will operate to attain their goals and with whom they will work.   

• Another way is planning group or a consultant will work with the company and scan the environment and find out the issues and then prioritize them in terms of feasibility, timing and importance. There will be some set of strategic issues which will be the part of strategic planning process. First set will get the most importance than any other sets. Board of committee or appointed staffs will review those issues and prepare their strategic planning according to the prioritizing issues. 
Issues can be indentified in both ways but for the proper harmony there will be agreements among the decision makers otherwise it is tough to prepare proper strategic planning.


       2.3   Explain different planning techniques

There are different planning techniques like
·         SWOT analysis- which identify strength, weakness, opportunities and threats of the company.
·         PEST analysis- which analyze political, economical, social and technical issues
·         STEER analysis- which analyze socio-cultural, technological, economic, ecological and regulatory factors.
·         EPISTEL- which analyze environment, political, informatics, social, technological and economical and legal issues.
All of the above techniques are very useful to identify major strategic planning issues.

                                        

                                                System: pyramid
SYSTEM:
For implementing strategic planning, a leader is essential who is capable to transform organizational vision among the other employees successfully and sustainably. Leader must have the capability to manage changes and those changers are:  
§  Able to know what he wants to accomplish and creates a convincing vision which inspire others.
§  Able to understand stakeholders and communicate with them often, regularly and quickly.
§  Able to manage different kind of supports and resist those issues which oppose the changes. 
§  Leadership is very essential for development, planning, implementing and sustaining improvements.
§  Change leadership is very essential as he is responsible for setting new vision, communicate the vision and execute the vision [1].

     3.      Be able to formulate a new strategy
     3.1  Produce an organizational audit for a given organization
Organizational audit for Subway

Subway is the fastest growing food franchise in the word and 2 years back they beat McDonalds. The revenue of Subway is not that much as McDonalds because the outlets are comparatively smaller than McDonalds. But they are doing profitable business. They have some loyal and permanent customers all over the world. They started their operation in USA but later they took over the place in Europe and now they are operating all over the world.
Subway is a good place to eat organic food and those foods are getting popularity day by day. Subway has great brand image among the customer for its unique foods, quality of services and availability. The present internal condition, supply chain management, economic, financial status, operation is quite up to the mark. Their main vision is to provide quality of food to all classes of the people in the society. They always invest huge amount of money on behalf of the product development. They ensure product quality all over the world and product may vary according to the culture, place and origin. More than 70% Subway outlets are franchised and most of the owners are the previous customers of Subway. They become very much fond of those foods and intended to open outlets. Most of the employees have good relation among their managers and managers have good relation with the central monitoring authority. The main owners of Subway train managers at regular basis and if there any change in vision, mission they inform all the outlets immediately and provide adequate supports. All managers spread those goals among the employees and the employees work together to attain organizational goals and for that reason the business is still spreading at higher rates.   


      3.2  Carry out an environmental audit for a given organization
Environmental audit for Subway:

There are some external factors which affect Subway’s operation in some ways like some political factors affect Subway recently. Health and safety guidelines of the government, modified animal and foods rights campaigns organized by some social groups hampers Subway operations. Still Subway has some advantages. It needs less money to set up a new outlets and it is very good business both for franchisors and franchisees as franchisees can share franchisors reputation and branding and franchisors can spread up their business. There are some other competitiveness of Subway like it has growing market for healthy foods especially sandwich, has good supply chain, perceived quality and brand loyalty among the customers. Most of the people are now busy and they depend on fast food industry so Subway has great opportunity to spread up their business. Subway food has great advantages as it has low fat, provides lot of vegetarians food items, quality of foods which is very good for health. From the current research it was found that customers are now more likely depends on sandwiches and salads rather than high fat foods. People are becoming more health conscious and for that reason they are looking for low fat foods. So Subway has great perspective in future. Subway are investing huge amount of money on food development and they are trying to reduce food contamination. Environment is getting polluted day by day so it will be big challenge for them to provide fresh food among the customers. In future environment friendly groups will create pressure to kill less fish and animals and it will be another giant problem for them. So Subway needs to think alternative ways to provide fresh foods among the customers.     

     3.3  Explain the significance of stakeholder analysis

Stakeholder analysis means that analysis which analyzes the attitude of stakeholders towards something. Normally this kind of analysis is take place during the preparation phase of a project to consider the attitudes of the partners about the possible changes. It can be done once in a year or regularly to assess the attitude of the stakeholders.
An organization or a person can be a stakeholder and both can show positive or negative attitudes. Both positive and negative attitudes have great impact on organization, government or a company. There are some classifications of stakeholders and they are:
§  Primary stakeholders: for an organizational action those stakeholders are affected directly either positively or negatively.
§  Secondary stakeholders: or intermediates stakeholders and organizational actions affect them indirectly.
§  Key stakeholders: (who can also belong to the first two groups) they have eloquent importance and influence within the organization.
The main objective of stakeholder analysis is to develop cooperation among the project team and stakeholders and a probable successful outcomes for a project. It is very important and essential before predicting an outcome or before starting a new project or implementing the organizational changes gradually. It is important to identify all stakeholders for the purpose of identifying their success criteria and turning these into quality goals.


     4.      Understand approaches to strategy evaluation and selection
4.1Analyse possible alternative strategies relating to substantive growth, limited growth or retrenchment
The key strategic alternatives are limited growth, substantive growth or retrenchment.
Limited Growth:
·         Market penetration, either in a deliberate attempt to build market share or as a form of consolidation to protect a customer base
·         Market development-opening up new opportunities with different customers, possibly in overseas markets
·         Product development- extending the range in order to expand the level of business with existing customers.

Substantive growth:
·         Horizontal integration- generally merging with a direct or indirect competitor, again to increase market share.
·         Vertical integration-linking with another company in the same supply chain
·         Related diversification- moving into an area where either marketing or technology issues are similar, often by acquisition, merger or strategic alliance
·         Unrelated diversification- the higher risk strategy involving new markets, new products and new technologies

Retrenchment: beginning with ideas of consolidation either
·         As a basis for turnaround of a company experiencing difficulties or
·         Lined to the divestment of non-core activities
The key strategic means are:
·         Organic growth-internal investment to develop new competencies
·         Acquisition (friendly purchase), merger (two companies simply joining together) and take-over (hostile purchase).


4.2Select an appropriate future strategy for a given organization

Future strategy for Subway
SUBWAY main marketing objectives are maintain positive , strong growth each quarter and achieve a steady increase in market penetration. SUBWAY posses good information about the market and knows a great deal about the common attributes of the most prized customer. This information will be leveraged to better understand who is served, what their specific needs are, and how SUBWAY can better communicate with them through marketing. SUBWAY use marketing segmentation, targeting and positioning strategies to develop their market.

SUBWAY positioning their products by continuing to build the brand on the "freshness" platform. The SUBWAY chain is expanding its universe of potential customers as a place for "TASTY" and "HEALTHY" food. This positioning, communicated via an effective advertising campaign, will serve to make the SUBWAY chain part of customers’ everyday consideration set.
SUBWAY use lots of strategies to position their kid’s meals. In year 2004 Jared Fogle and WNBA superstar Lisa Leslie kick off the Jared and Friends School Tour in NYC, stressing the importance of healthy eating and exercise. The in-school curriculum, 'One Body! One Life! Eat Fresh! Get Fit!' is developed by the SUBWAY brand and Weekly Reader. The curriculum is intended to help teachers of fourth, fifth and sixth grade students and instill proper eating and fitness values
Develop more partnerships with movie producers and toy manufacturers to promote new movie releases through children's menu packaging and co-branding opportunities [4]

5.      Understand how to implement a chosen strategy
5.1  Compare the roles and responsibilities for strategy implementation
Organizations successful at strategy implementation consider the human resource factor in making strategies happen. Further, they realize that the human resource issue is really a two part story. First, consideration of human resources requires that management think about the organization's communication needs. That they articulate the strategies so that those charged with developing the corresponding action steps (tactics) fully understand the strategy they're to implement.
Second, managers successful at implementation are aware of the effects each new strategy will have on their human resource needs. They ask themselves the questions... "How much change does this strategy call for?" And, "How quickly must we provide for that change?" And, "What are the human resource implications of our answers to those two questions?"
In answering these questions, they'll decide whether to allow time for employees to grow through experience, to introduce training, or to hire new employees.

5.2  Evaluate resource requirements to implement a new strategy for a given organization

Subway want to implement new strategy to increase their profit as there are some change in technology, customer’s attitudes and tests. For implementing the new strategy they need some resources and those are:

Resource allocation is a central management activity that allows for strategy execution. In organizations that do not use a strategic-management approach to decision making, resource allocation is often based on political or personal factors. Strategic management enables resources to be allocated according to priorities established by annual objectives.

Nothing could be more detrimental to strategic management and to organizational success that for resources to be allocated in ways not consistent with priorities indicated by approved annual objectives.

All organizations have at least four types of resources that can be used to achieve desired objectives; financial resources, physical resources, human resources, and technological resources. Allocating resources to particular divisions and departments does not mean that strategies will be successfully implemented. A number of factors commonly prohibit effective resource allocation, including and overprotection of resources, too great an emphasis on short-run financial criteria, organizational politics, vague strategy targets, a reluctance to take risks, and  a lack of sufficient knowledge.

Below the corporate level, there often exists an absence of systematic thinking about resources allocated and strategies of the firm. Yaviz and Newman explain why:

“Manager normally have many more tasks than they can do. Managers must allocate time and resources among these tasks. Pressure builds up . Expenses are too high. The CEO wants a good financial report for the third quarter. Strategy formulation and implementation activates often get deferred. Today’s problems soak up available energies and resources. Scrambled accounts and budgets fail to reveal the shift in allocation away from strategic needs to currently squeaking wheels. The real value of any resource allocation process. [4]”

5.3   Discuss targets and timescales for achievement in a given organisation to monitor a given strategy

Subway is the leading and fastest growing food retailer in the world but their profit is not that much as McDonalds and Burger-king. They want to increase their profit by implementing new strategy. They want to get competitive market and want to innovate new products for customers. They efficiency of management and stuffs are not that much satisfactory. They want to change the condition for permanent basis. So they prepare plan for long term and short term basis. Organization will give more importance on long time goals then it will split the long time goals into short-term goals but the success factors of an organization depend on the short time goals and targets. If short time goals are achieved, long term goals will achieve automatically. For an example Subway want to increase its customers and operations all over the world and at present they have around 4000 outlets all over the world but they want to double this number within 10 years. First of all they have to decide their potential market, potential customers and market palace and then they will split their targets year by year. For increasing their business they have to increase their customers otherwise it is not possible. For increasing loyal and potential customers they have to provide fresh and healthy foods and maintain their food and service quality up to the mark. They need to investigate market place and customer regularly to identify future customer demand and trend otherwise other competitor will take over their place. Regular market research is very essential for a retailer. Breaking the organization's strategy down into smaller targets and timescales allows the executives to take a step back and analyze which methods work better than others. Rather than focus completely on one fixed strategy, implementing different targets lower down allows the head office to find the best way to reach higher, more long term achievements.

6.      Conclusion

The success of any good enterprise is based on the measures that are laid out by the various stakeholders. In commerce, business strategy is important for the achievement of the objectives set. In a commercial setting, the main aims normally revolve around making lots and lots of profits, growing and expanding, and most importantly, diversifying. These goals must be achieved for business success in any flourishing industry. There are very many business strategies that can be utilized by new or old ventures in order to compete healthily in the market. Most corporations that have taken the market by storm normally have a history of good and functional strategies that have been set and adhered to strictly. Therefore, it is important that once they have been drawn and enacted, the measures are implemented and put into the system. There are various sources form which strategies can be obtained and put into use. The main route is through the educational systems. Students here are trained on the various commercial factors that are important for success. They are also exposed to various career skills and aspects such as team building, branding, and marketing etc. that impact on the daily operations of any businesses. In addition, there is the internet and enterprising talks and conferences. Through these platforms, a lot of information exchanges have taken place to highlight the various factors encountered in the enterprise world. There are lots of issues that are discussed here. For instance, communication and entrepreneurship skills, as well as financial accountability and management skills are expounded on immensely.

The various governing authorities across the universe have ensured that these strategies are enacted and achieved through various support options by offering financial and moral support. They have also organized a series of seminars and workshops for the business personalities to sharpen their skills, expertise, and knowledge. All these factors are vital for any business [5].


References:
1.      J. Scott Armstrong (1985). "Evidence on the Value of Strategic Planning in Marketing: How Much Planning Should a Marketing Planner Plan?"
2.       What Is Stakeholder Analysis?, S. Babou, 2008
3.      John L. Thompson, Business and Economics, 2001.
4.      Allocation resources in strategy implementation process, Retrieve on: 15/05/12, Available at: http://histrategy.blogspot.com/2011/02/allocating-resources-in-strategy.html

5.      Six sigma training assistance, The importance of business strategy, Retrieve on: 15/05/12, Available at: http://www.sixsigmaonline.org/six-sigma-training-certification-information/the-importance-of-business-strategy.html
  
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