SUBJECT: BUSINESS STRATEGY Individual Report – PLEASE DONT COPY FROM INTERNET Un
ID: 376347 • Letter: S
Question
SUBJECT: BUSINESS STRATEGY
Individual Report – PLEASE DONT COPY FROM INTERNET
Understand approaches to strategy evaluation
3.1- Analyse the appropriateness of alternative strategies relating to market entry, substantive growth, limited growth or retrenchment for an organisation.
3.2 – Justify the selection of a strategy
Guideline to achieve a pass on criteria 3.1 and 3.2:-
Plan 2 alternative strategies which are in line with Starbucks mission and objectives. Discuss the main and alternative strategies. Check & justify for appropriateness.
Apply techniques of strategy evaluation and selection to select an appropriate future strategy for the chosen organisation. Justify your choice. There are 3 different methods used to select an appropriate strategy. To secure a pass you need to appropriately apply at least one of them.
Understand how to implement a chosen strategy
4.1 – Assess the roles and responsibilities of personnel who are charged with strategy implementation
4.2 – Analyse the estimated resource requirements for implementing a new strategy for the organisation
4.3 – Evaluate the contribution of SMART targets to the achievement of strategy implementation in a given organisation.
Guideline to achieve a pass on criteria’s 4.1, 4.2 & 4.3
To complete the implementation process you are required to:-
Document the roles & responsibilities of any 2 managers involved in the strategy implementation. Documents to include:-
Responsibility chart
Activity schedule
Estimate the resource requirements for the new strategy. Check and report for appropriateness and acceptability
Use project management techniques to benchmark operational and individual targets within a specific time period. Organise and specify time targets for various activities in the implementation process. Highlight how each activity targeted is SMART. Review the implementation process and justify how SMART targets would help in the achievement of the strategy implementation.
Explanation / Answer
Market entry strategies
Merger, Acquisitions and Joint Venture:
When an organisation requires a solution effects for a special market, A merger, acquisition or joint venture happens. The friendly buying of one company by another is called acquisition also known as takeovers, when one company takes ownership of another. This can be done by making an offer to the possessor of the prey firm or by purchasing shares into the firm and trying to take it over that way. Reasons for acquisitions are to increase the market share in business so as to be the only leader; entering into new markets make the companies' portfolio wider and at the same time increase dangers.
Merger is the composition of two separate firms, as more or less equal partners. Companies merge equally if they have equal sizes, or if they are in same business and make same product. But when a large company merge unequally as it merge with a small company then the reasons that companies merge, because they are working at a loss and that merger is the only way for the company to stay alive. Also they merge to uphold its leadership in the corporate world.
Joint venture is a venture by a partnership or a corporation to share risks or knowledge. It joint owned independent companies set by other organisation and strategic alliances are especially useful where there are powerful reasons against a full merger or acquisition.
Franchising: Franchising is a marketing procedure for making an image in the minds of customers about how the company's products and services can help them. It is a way for repartition products and services that fulfil customer needs. McDonalds is a good example of a franchising selection for extends in global markets.
Organic growth: Organic growth indicative the real growth for the core of the company and see whether managers have used their skills to improve the business and how well organisation has used its inside resources to increase profits.
Substantive growth: This section looks the horizontal and vertical integrations; related and unrelated diversification. Substantive growth strategies are often applied through acquisition, merger or joint venture instead than organic growth. Franchising can provide another tool of producing external growth, but it is only likely to be applicable for certain types of business.
Horizontal integration: It occurs when "a company acquires or merges with a competitor" (Thompson, J. L, 2009) or minimum another company operating at the same period in the added value chain. The two organisations might well appeal to various market sections instead than compete directly. Therefore, it apprehensive with matters of critical mass.
Vertical integration: If a jeans producer acquired a cotton textile supplier this would be known as back vertical integration; if the supplier bought the shirt producer, its customer, this would know as forward vertical integration. Back vertical integration secures resources at a lower price than competitors. Forward vertical integration secure customers or outlets and ensuring product preference and it can give a firm better control above its marketing attempt.
Diversification: There are two types of diversification. Related diversification means that they stay in a market or industry with which they are familiar. For example, a biscuit manufacturer diversifies into cake manufacture. Unrelated or conglomerate diversification is where they have no former industry or market experience. For example a food company invests in the rail business.
Limited growth
Market Penetration: Here an organisation markets their existing products to their existing customers. This means increasing revenue by, promoting the product, repositioning or changing the brand. However, the product is not change and they do not look for any new customers.
Market Development: In market development a company market their existing product in a new market, which means that the product stays the same, but it is marketed to a new customer. For example marketing a product in a new area or sending out the product to different countries. However, the key issues are: alteration to boost attractiveness to new section or niches, new uses for a product or service and suitable for different countries with specific manner or requirements.
Product Development: When a company expand and plan new product to replace existing ones, and those products are then marketed to their existing customers.
Innovation: Innovation is linked to the three strategies describe above but it often involves more important changes to the product or service. As a strategy it can imply the replacement of existing products with ones which are actually new, as opposite to correction and which imply a new product lifecycle.
Disinvestment strategies
Retrenchment:
Retrenchment means to cut down or reduce business. Usually all companies have aim to grow their businesses but not all of them succeed and many are forced to decrease the scale and area of their business activities as an intentional act of strategy. This is known as retrenchment. They things that force retrenchment are: market reduction, unsuccessful takeovers, economic recession, and change of ownership, uncompetitive cost arrangement and poor competitive position
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