A Strategic Management In A Global Context Business Essay

A Strategic Management In A Global Context Business Es range schematic Strategic prep ardness is the process that involves an ecesis in the defining of its strategy or rush and making the decisions on how its resources should be completelyocated in order to achieve this strategy. nominal strategic planning is put aned by the macro- surroundings and this is the highest level layer in the framework, this consists of a wide range of environmental featureors that impact to some conclusion on almost all organisations. The PESTEL framework outhouse be employ to identify how future trends in the Political, Economic, Social, Technological, Environment and Legal environments might affect an organisation. Pestel compendium provides the broad date from which signalise drivers to modification throne be identified. By using these key drivers organisations dope envision scenarios for the future. Scenarios can be used to help organisations decide if miscellanea needs to happen depe nding on the different ways in which the melodic phrase environment may change.It is essential for viers to try these factors in the present and how they ar likely to change in the future. By analysing these, managers will be able to draw out implications for the organisation.Pestel factors ar sometimes linked together i.e. technological factors can impact on economic factors. It is necessary to identify the key drivers of change these argon environmental factors that are likely to have a high impact on the success or failure of the strategy. Key drivers vary by sedulousness i.e. Primark may be concerned by social changes that can change customer tastes and behaviours.The critical issues are the implications that are drawn from the understanding in guiding strategic decisions and choices. The next stage is drawn from the environmental compendium specifically strategic opportunities and threats for the organisation.Having the ability to identify these opportunities and threat s is extremely valuable when idea about strategic choices for the future. Opportunities and threats form mavin half of the pulverisation epitome that shapes a companys formulation.The use of SWOT analysis can help tally the key issues from the business environment and the strategic potency of an organisation that are most likely to impact on strategy enlargement. Once the key issues have been identified an organisation can hence assess if it is confident to deal with the changes winning place within the business environment. If the strategic capability is to be understood the business essential remember that it is non autocratic but relative to its competitors. SWOT analysis is only useful if it is comparative, that is it examines strengths, weaknesses, opportunities and threats. SWOT analysis should help focus discussion on the future choices and to what point an organisation is capable of supporting these strategies. SWOT analysis should not be used a substitute for much in-depth analysis.In responding strategically to the environment the goal is to reduce identified threats and take advantages of the best opportunities.Peter Drucker, discussing the vastness of business policy and strategic planning in his book the behave of counsel says we cannot be content with plans for a future that we can foresee. We must prepare for all possible and a good many unrealizable contingencies. We must have a workable solution for anything that may mystify up. http//www.alagse.com/strategy/s1.phpBy taking advantage of the strategic gap (which is an chance in the warring environment that has not been fully exploited by competitors) organisations can manage threats and opportunities.http//turbo.kean.edu/jmcgill/assess.pdfhttp//polisci2.ucsd.edu/snunnari/HBR_on_Strategy_23_41.pdfpage=25Core competencies are a set of linked business processes that deliver superior value to the customer, when these are combined they create strategic value and can lead to ma tched advantage. By using Porters five forces analysis which is a framework for organisations to analyse industry and business strategy, they can draw upon the five forces that secure the competitive intensity and thereof attractiveness of a trade. Three of Porters five forces get up to competition from external sources and the other two are internal threats.This analysis is just one part of the complete Porter strategic modeling the others intromit the value chain (VC) and the generic strategies.http//hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 concord to Porter (2008) the job of a strategist is too understand and conduct with competition however managers define competition too narrowly as if it has occurred only among today direct competitors. Competition goes beyond profits to include competitive forces such as customers, suppliers, potential entrants and substitute products the extended disputation that results from all five forces defines an ind ustrys structure and shapes the nature of competition within an industry. For fount Apple are good at technology and innovation therefore they can take the opportunities that give them competitive advantage and makes them leaders compared to Samsung or Nokia.Porters says there are 5 forces that shape the competitionThreat of sweet entrantsBargaining power of customers powerful customers usually bargain for better function which involve follow and investmentBargaining power of suppliers may determine the cost of raw materials and other inputs effecting profitabilityRivalry among competitors competition influences the price and other costs like advertising etc.Threats from substitutes where-ever substantial investments in RD is taking place, the threat of substitutes is large. It also affects profitability.Competitive advantage is the heart of strategy and for the strategy to succeed the organisation should have relevant competitive advantage.We can see an example of this wit h Toshiba who operate in electrical goods, through a flexible manufacturing system it manufactures different products / varieties of some products on the same fabrication lines. At Ohme it assembles nine varieties of computers on the same line and on the side by side(p) line it assembles 20 varieties of lap top computers.It is able to switch from one product / variety to another instantly at low cost and makes profits on low masses runs too. This flexibility of Toshiba to respond promptly and easily to the fast changing market demand is definitely one of its competitive advantages. Whereas its competitors make profits only through long volume runs of a particular model.However, there are a lot of companies who are choosing not to invest due to the recession however Lidl and Aldi are taking advantage of supplying cheaper products giving them competitive advantage over say Waitrose.http//www.mckinseyquarterly.com/Bringing_discipline_to_strategy_1054Benefits of Strategic groomingE ffective strategic planning can positively improve the performance of an organisation and give them the ability to serve more clients, access additional resources or enhance the quality of service/product. It can also offer solutions to major organisational issues or challenges and gives stakeholders of the organisation an opportunity to develop harmonic solutions to long issues/challenges that have been affecting the organisation. Furthermore it allows for forward thinking, allowing an organisation the opportunity to pause and revisit the mission and create long-term vision. It allows bear future direction allowing stakeholders to look to the future, plan and respond to changes.Evaluation unrivalled of the major drawbacks of black-tie strategic planning is the uncertain dynamic environment, things change constantly and everything becomes shorter. The recession at the present time is making everything capricious and this is not good for strategic planning.According to Mintzberg 1994 strategic planning should be used to devise and implement the competitiveness of each business unit.scientific management was pioneered by Fredrick Taylor and involved separating thinking from doing and thus creating a mod function staffed by specialists. Planning systems were expected to produce the best strategies as well as step by step instructions on how to achieve this, but this never worked well. According to Mintzberg strategic planning is not strategic thinking, the most successful strategies are visions, not plans.When an organisation can differentiate between planning and strategic thinking they can then get back to what the strategy making process should be. Once a manger has the ability to learn from all sources around him, including in-person experiences and market research and can integrate this into a vision of the direction that the business can then pursue.Mintzberg suggests that strategic planning is a misconception and rests upon three sorry arguments th at prediction is possible, thats strategists can be detached from the subjects of their strategies, and that the strategy-making process can be formalised.Strategic thinkers can apply lessons learned from Mintzberg (1994) three inherent fallacies of traditionalistic planningThe Fallacy of Prediction is the self-reliance that we can actually check into events through a formalised process that involves people engaged in creative or even routine work and can manage to stay on the predicted course. You need more than tight facts you need the personal touch. People are not objective, they are complex.The Fallacy of Detachment is the assumption we can separate the planning from the doing, if the system does the thinking, then strategies must be detached from the tactics. Formulation from implementation, thinkers from doers. One objective is to make sure senior(a) managers receive relevant information without having to immense themselves in the details. One fact is innovation has neve r been institutionalised and systems have never been able to retch the synthesis created by the entrepreneur or the ordinary strategist and credibly never will.The Fallacy of Formulisation suggests that systems could certainly process more information, at least hard information. However they could never internalise it, comprehend it, and put it all together. Such control is more a dream that a reality. truth tells us that anomalies, the fickle behaviour of humans and the limitations of analysis play a huge factor in the organisational outcomes and to disregard them is risky and could lead to sketchy planning.What are the limitations of strategic planning when things are changing rapidly?http//www.globalfuture.com/planning1.htmThe limitations of formal strategic planning can be seen if the future is uncertain and the expectations discriminate from the plan.There could also be internal resistance to formal strategic planning due to factors includingInformation flows, decision maki ng and power relationships could be unsettledCurrent operating problems may drive out long-term planning effortsThere are risks and fears of failureNew demands will be placed on managers and staffConflicts with the organisation are exposedPlanning is expensive in time and moneyPlanning is difficult and hard workThe completed plan limits choices and activities for the organisation in the futureNicholas ORegan, Abby Ghobadian, (2002) Formal strategic planning The key to effective business process management?, Business Process Management Journal, Vol. 8 Iss 5, pp.416 429http//www.innovation.cc/scholarly-style/fairholm3.pdf