Strategic Issue
External analysis pinpoints major opportunities and threats posed by the environment. It analyzes those external factors the community or public sector jurisdiction cannot control but which nevertheless affect its ability to achieve strategic objectives. Internal analysis provides an objective understanding of the controllable factors in the public sector jurisdiction's internal environment, identifying those with the greatest long-term impact on a community's or organization's position ( 1991). The objective of this analysis is to identify the organizations or community's major strengths and weaknesses with respect to its overall mission or relative to each of the strategic issues it faces. The usefulness of the internal analysis depends on objectivity and completeness and identifies strengths and weaknesses of the organization as it attempts to implement strategic plans, goals and objectives, and its overall mission. Organizations need to be aware of what is happening in their environment that might affect them. In other words, they should continually survey and monitor the outside as well as the inside of the organization. This is especially true during the strategic planning process ( 1991).
Five separate but overlapping environments should be monitored. These include the macro environmnent, the government environment, the competitive environment, the citizen environment, and the organization's internal environment. These areas should be surveyed in depth. Environmental scanning will also identify a variety of factors, both internal and external to the organization. In fact, one of the benefits of strategic planning is that an organization will gain a better understanding of how environmental scanning should be done and be able to manage more effectively as a result. Factors to be considered as part of the macro environmental scanning process include social factors such as demographics, financial factors such as interest rates, and political factors such as increasing government deregulation, changing federalism and state government's trends, and regulations ( 1991).
Among the factors to be considered as part of the government environment are the number and locations of other governments, the degree of federal and state government presence, the typical services being provided, and the marketing strategies of other competitive local governments. The competitive-environmental scan includes consideration of general competitor profiles, market segmentation patterns, research and development, and others ( 1991).The combination of environmental assessment and forecasting, and the strength and weakness evaluations is often referred to in the strategic planning process as the situation audit or the environmental scan. The basic purpose of the environmental scan is to assess the environment within which strategic planning will be conducted and to develop a set of strategic issues ( 1991). The Strategic issues faced by the company include funding and maintaining the quality of products and services the company has. The company may or may not have enough funds to last for a long time. The company has also some strategic issues on employee relations.
Leading successful change
Over the last two decades of the twentieth century, theories of organizational change have had a tremendous impact on business and not-for-profit companies. Many of the top corporations, have implemented one or other change program over the last twenty years, often at the cost of millions of dollars, and involving large-scale restructuring and extensive job losses (2003). At the end of the day, while it is generally agreed that certain change programs have become widely popular, there is considerable debate about the success or failure of the subsequent changes themselves. Business critics blame suggested failure on incorrect implementation. Other business critics are less convinced, questioning the lack of evidence of a clear link between the implementation of selected change program and subsequent business success. It is argued that, within management thought and practice, the notion of organizational change has changed in significance over the last two decades, from one of many potential strategies of managing to a key influence on organizational effectiveness and survival. The focus has shifted from the strategic choice of the actor to one of incontrovertible external forces that managers need to anticipate, react to and manage. It is contended that organizational change as imperative has become an important management discourse that can be witnessed in the discursive practices of companies (2003).
Explaining the popularity of organizational change in sense making terms it can be argued that change has become a conventional management practice, developed and sustained through a powerful management discourse, whose on-going character influences the decision-making of large and small companies, profit and not-for-profit companies alike. Whether or not the adoption of a particular program of change is the right course of action for some companies doesn't seem to matter. Decisions to implement change programs are based on plausibility rather than accuracy. Prior to 1980, within business texts, organizational change as a management technique was either not mentioned at all or was limited to discussion of group dynamics and employee resistance to change (2003).
Over time, the emphasis on change programs has switched focus from ways to improve employee satisfaction to a goal today of customer-driven corporate effectiveness. But something more than a change in focus has occurred. The notion of organizational change has taken on new meaning. Since the early 1980s, it has become an imperative rather than a technique to be considered at appropriate times, a holistic rather than a piecemeal approach to organizational effectiveness (2003). Organizational change is done by a company when it believes that the company is not adjusting to the new trends in its environment. To turn the division around the management must make sure that the changes will help the members of the organization to easily adjust. The management must also make sure that there are back up plans in case the changes that the company intends to make will fail. This is to ensure that the company’s operation will not be stopped by the effects of the changes.
Barriers to change in strategy
Potential barriers to change could be found in culture values and attitudes, social claims and obligations, or associated with perceptual differences between change agents and recipient groups. It is said that barriers to change can come from the value people place on their traditions, what they were taught as they became members of the culture, what they learned as true and behaviorally correct. Such things produce the pride in being identified with the group and with knowing the right way. In other words, the cultural forces consist of all those things that exist within the integrated culture and the logical order of things as they have been learned (1996). It has become very clear, over many years of study, that the greater resistance to change comes where people place the greatest value, in association with core areas of culture. The social system of culture is such a core area of culture, if for no other reason than that humans group together. The enculturation system, which emphasizes cultural transmission and acquisition within a culture, is another core area on which great value is placed, for it ensures that the culture survives. Culture is reproduced through learning. Worldview provides the members of the group with some understanding or perception of the world around them (1996).
Economic and political systems assist them in adapting to the resources with which they have to work and the social order within which all these things must exist. Changes that suggest altering basic beliefs and/or behaviors with regard to any of these core areas of culture, directly or indirectly, come into conflict with established patterns of belief and practice. In such circumstances, any of the traditional patterns can turn into barriers or stimulants to change. This is why it is so critical to understand the cultures involved in a change setting, not just as they may be ideally portrayed but as they actually exist and as individual members live them. For example, in the American culture, the gaps between these versions of culture can be substantial. Strategy is a question to be considered in the dynamics of change during implementation as well. Minimizing the potential barriers to change and maximizing the potential stimulants must become as much a part of planners' strategy as the introduction of the change idea itself. Barriers to change can be found in culture, in traditional practices and beliefs, in social structure, and in psychological areas (1996).
In the corporate world, this can mean the expected relations between management and employees, using established channels of communication, and recognizing that there are both formal and informal leaders. Cultural barriers can come from the value people have placed on tradition, the learned truth and correct behaviors, things closely tied to the natural ethnocentrism of culture groups, the pride they take in being identified with the group, and the logical order of things as they have been learned (1996). To overcome the barriers to change in strategy the company must explain in detail why is change needed and what will be the benefits of change to the company. The company should also provide concrete evidences that will provide additional assistance in showing that the change will give benefits to the company.
Strategic Choice
The strategic choice perspective has long stood in contrast to a deterministic view of organizational adaptation. It argues that the destiny of organizations depends at least partially on the choices that they make. This perspective is consistent with the assumptions of Stratified Systems Theory which assert that leaders must mature in their ability to handle tasks with more distant time horizons if they are to succeed in making strategic choices. Researchers who work within the framework of strategic choice have attempted to differentiate their approach from deterministic perspectives, which hold that a firm's destiny lies in forces outside of its control. They have been less concerned with integrating the various and disparate theories that have emerged in support of the general paradigm (1992). Choice processes may sometimes reflect characteristics of a leader, other times; they may be embedded in organizational routines that he beyond a leader's reach. They may sometimes result from cognitive deliberations and other times result from unreflective actions. In all cases, these choice processes result from reciprocal interactions between individuals and their organizational contexts. (1992).
By explicitly considering the elements of choice understanding, intention, and action at the intersection of individuals and their organizational context, the framework people develop integrates these different characterizations of strategic choice (1992). Understanding, intentionality, and action are important elements of any model of choice in organizations. Though different views of strategic choice assign different sequences and different casual links between these elements, they represent building blocks of any choice model. Theories vary in how they treat the organizational context in which they occur. Models of choice that view the organization as a gestalt portray ingrained patterns of action as driving strategic choice processes (1992). Cognitive elements of decision-maker intention and understanding, then, are embedded within an organization's routines. Models of choice that view individuals at the helm of an organization portray intention and reflection as driving strategic choice processes. The organization represents the arena for decision activity within this paradigm, rather than as a consequential component of any decision process (1992).
An organization-based action mode of strategic choice predicts that crises can break the cycle and produce unlearning. When organizations discover that their behavior programs are producing undesirable results, some organizations replace their leaders, reorient, and survive more of them unlearn and then die. The key to reorientation and survival, however, is not just to replace the organization's leaders. The culture, transformations, structures, and ecology that supported past strategic directions need to be refocused to support the newly intended direction (1992). Attempts to change an organization will fail unless the inertial forces embodied in organizational memory are redirected. An individual-based cognitive model of strategic choice also predicts that crises can break the cycle and produce unlearning. This view, however, suggests that the success of unlearning and relearning depends on the focused vision of those at the organization's helm. Rather than assigning the task of renewal to organizations, this view regards it as a critical task of the individuals responsible for an organization's survival and growth its leaders. Executives' second-order learning may become the key to survival in these times, as might their capacity for independence of thought and their ability to anticipate second and third-order effects of their decisions (1992). Strategic choices are done by companies to find relative solutions to different problems they have. The company has the responsibility to choose the proper strategy that can help them achieve their goal.
Pursuing Internationalization strategy
Four broad types of internationalization strategy that can be identified in the businesses include domestic, exporting, international, and global strategy dimensions. Understandably, the internationalization dimension played a very minor role in defining domestic strategies. Instead, overall strategic behavior was dominated by competitive positioning. Little emphasis was placed on international investment, political, or integration sub strategies. When compared with strictly domestic businesses, exporting businesses relied much more heavily on international sales in accounting for total business revenues (1990). Furthermore, businesses were commonly committed to increasing international sales levels through eventual foreign direct investment, typically in terms of overseas sales/distribution centers. Exporting businesses placed considerable attention on international external integration and international political activities. Integration with the international external environment was achieved largely through developing expansive international information networks and establishing licensing agreements based principally on manufacturing technology (1990).
With increased levels of international activity, businesses became more fully exposed to divergent international business environments. This exposure had a dramatic influence on strategic behavior, as businesses found themselves stretched to balance global competitive pressures with organizational capabilities that remain dominated by domestic concerns. International investments were contingent on market opportunities for introducing the particular technology (1990). Minimizing costs played a relatively minor role in determining the location of overseas operations. Also, rather than trying to influence their political environments proactively, international strategies seemed to be much more reactive. A high propensity existed either to enter independently only those foreign markets that provided attractive political environments or to avoid political entanglements entirely by seeking local partners to assist in product assembly and distribution. Of the four internationalization strategy types identified, the global strategy type demonstrated the highest commitment to international activities. This commitment was directed by tight head office control over all international activities (1990).
International investment location decisions were determined on the basis of potential comparative advantage. Value activities were frequently spread across national boundaries leading to huge scale economies. Production-sharing alliances were used frequently. Worldwide distribution networks were established to move the business's internationally standardized products. Distribution often involved the sharing of outlets with sister businesses within the same corporate organization (1990). One issue George has to face when he purses internationalization strategy is the adjustments they had to make as a company. George and the hospice have to adjust to the culture of the other hospices they are conniving with. Another issue is the pressure from international organizations. They have to make sure that the funds will be used well.
Finance strategies
In general, the tasks of a financial manager include activities that span from the execution of financial transactions to the planning, analysis, and control of financial strategies. As such, financial management requires the knowledge of laws, accounting procedures, data processing, and economic analysis as well as an understanding of the function of financial markets, the interpretation of financial models, and the negotiation of financial contracts (1990). While the practical tasks of financial management may be performed by accountants, general managers, or other individuals, it is the theory of finance which defines the theoretical aspects of financial management within the structured ideal of classical economic equilibrium models. The function of financial management, by adopting the framework of ideal competitive markets, structured rational choice models, and microeconomic equilibrium models, is associated with the passive optimization of the market value of the firm by adjusting the firm's operation and financial structure to given market equilibrium prices (1990).
By clearly separating the theoretical domain of finance, concerned with market equilibrium criteria, structured optimization models, and scientific-type research, from the practical domain of finance, concerned with financial strategies, financial control, and practical management procedures, it is possible to recognize the limited conceptual nature of the free market ideal. Recognizing the difference between the theoretical and the practical domain associated with financial management does not imply that the two can be discussed independently of each other (1990). It is the long history of developing rational arguments, of using analytic simplifications and structured mathematical optimization models, besides the integration of the underlying value structure into rules of common sense and accepted behavior that promotes simple solutions to complex problems. Pointing to the observed economic benefits that are attributed to the free market ideal contributes to the difficulty of separating the two domains (1990).
By addressing unique individuals and organizations all operating within systemically interrelated environments, markets become a reservoir of choice alternatives instead of a reference point for assessing long-term market opportunity costs. Any individual or organization with unique and different requirements can choose freely from among the many alternatives available in the market. Within financial management this involves a wide variety of financial contracts which are available in the market and which can be used to pursue specific financial strategies (1990). As such, the structuring of a financial position may involve equity contracts, short-term and long-term debt, various forms of contingent contracts such as options, futures, options on futures, or contingent swap arrangements, as well as combinations, straddles, spreads, strips, and straps. The increasing variety of debt contracts, ranging from traditional fixed-rates to variable-rates and zero-coupon contracts provides an environment that promotes different hedging and swap arrangements. The international dimension of closely interrelated financial markets highlights the wide variety of financial strategies that are available to address particular financial problem situations (1990).The company makes use of financial strategies in its daily business operations. The company must make sure that its financial strategies will work so that the business will run well.
The external environment
PEST analysis
Political sector
The company will not get any good reputation, trust and success if it will not be aware of what is happening in the political sector of the country. The company makes sure they are aware of the political situation of the country and the company has its position with regards to political issues. The company is prepared for any problems concerning the political sector and has different steps undertaken to counter it.
Economic sector
The company can be said to be economically stable for the past years. Its economic stature is doing well that’s why they try to improve their products to give the best to their clients. It is not only the internal economic situation of the company should be taken note of but also the economy of the country, the company checks first the economic status of the country they are operating in before making decisions because making decisions during a difficult time on the economy of another country may cause catastrophe for the company. It also checks on how the economy of the country they are doing.
Social sector
The company makes sure that the product they create will not be cause of health problems. They make sure that the proper safety standards are followed and there are no hazardous chemicals in the production of products. They make sure that the product they create will be accepted by the public. The company also has activities that can relate to providing assistance to society. The company engages in socially related activities that aim to foster a good relationship between the company and the society.
Technological Sector
The company offered new innovations in the technological sector and introduced new concepts with regards to its industry. Since technology rapidly changes the company makes sure they are updated to what is happening and they can adjust to these changes. The company makes sure that the products they have are updated with regards to technology and if new technologies emerge they can compete with these products.
Porter’s five forces
Potential Entrants
The company has been around for a long time and the company is not greatly affected by the new entrants. The influence of potential entrants to the company is weak. But to ensure that no other problem arise the company maintains low cost of unit production, this helps in making sure that the new entrant will not have advantage over them. Another thing that the company do is to innovate new techniques and procedures in serving the clients so that their can be product differentiation and the company has a unique product apart from the product their rivals has.
Competitive rivalry
Competition is one of the things that the company tends to focus its attention. Competitive rivalry affects the decisions made by the company. Different things are done by the company to ensure that they have advantage over their competitors one is a strategy wherein they give service straight from the heart. This kind of strategy gives the company a better relationship with the clients. Having a good relationship with clients gives them advantage over rivals. Another thing done by the company is to offer quality prices. By doing so the company lures clients away from competition. Moreover the company uses different promotional materials so that clients get to know them and so that more clients will transact with the company.
Substitutes
Substitutes give high influence to the company since substitutes can make a company lose the clients it has. The company makes sure that the substitutes won’t give them much problem. They do this by proving that the service and products they offer are the best quality and are better than substitutes. They also prove that their service is better against others by comparing and contrasting it with substitutes so that clients can know the difference.
Bargaining power of buyers
The bargaining power of buyers highly influences the company. It shows how good the company is doing in serving the clients. It also helps in determining how known the company is. The company makes sure that the bargaining power of buyers is high. They do this by making sure that buyers are concentrated and there are few buyers in a significant market share.
Bargaining power of sellers
The bargaining power of sellers highly influences the company. The company makes sure that their suppliers have high bargaining power through helping them show their importance in the industry. By demonstrating the value of their suppliers the company can attract other companies to purchase the suppliers products thus their bargaining power increase.
Resources Audit
In creating the products the company needs different materials, these materials are made by the company’s trusted suppliers. The company gathers its materials and supplies from the most respected and trusted suppliers. The materials and supplies have high value and are highly reliable. The company is certain that the materials they use in producing a product is something that will make the product have high standards of quality. The company is certain that the materials they use for the products will not make the clients think that their money is put into waste.
Growth strategies
Attempts to increase market share will very likely affect competitors directly and therefore precipitate competitor responses. The alternative of attempting to increase usage among current customers is usually less threatening to competitors. Heavy users are usually the most fruitful target. Light users, however, should not be ignored because there may be a way to unlock their potential. Increased product usage can in fact be stimulated in three different ways. First, the frequency can be increased. Second, the quantity used in each application can be increased. And finally, new applications can be promoted. Finding new markets does not guarantee long-term or short-term profitability but economies of scale in producing for the market or in supplying the market will contribute to profitability. However, there may well be barriers to entry to the market which means that neither short-run nor long-term contributions to overall profitability are attractive. A logical avenue of growth is to develop new markets by duplicating the business operation, perhaps with minor adaptive changes. In the case of market expansion, the same expertise and technology and sometimes even the same plant and operations facility can be used. There is thus potential synergy and resulting reductions in investment and operating costs. Of course, market development is based upon the premise that the business is operating successfully.
Geographic expansion may involve changing from a regional operation to a national operation, moving into another region, or expanding to another country. A firm can also grow by reaching into new market segments. There is, of course, a variety of ways to define target segments and hence growth directions. The introduction of new products can have a positive impact on sales growth. Initially, profitability may not increase since there may be substantial research, development and launching costs associated with the venture which have to be recouped. Longer-term rates of return on investment which are at least equal to the current rate of return on capital employed are required from new products. This may not be possible and firms may have to accept the possibility or even certainty of lower profitability, just to stay in business. Predicting demand for new products can be difficult and hence so is the estimation of profit potential.
Two important trends in the market place have been of major importance in stimulating product innovation: the increasing instability of consumer preferences and the growing intensity and sophistication of competition. Changes in consumer and competitor behavior are not the only external forces affecting product innovation. Technological advances have an equally significant impact, often leading to the radical changes in size and characteristics of established product markets. A good example is the impact of the microchip on the world market for wristwatches. This was initially dominated by Swiss manufacturers making use of mechanical movements but latterly manufacturers in the Far East have moved in using microchip technology. Moreover, improvements in product and process technology are often introduced to a wide range of product markets simultaneously. New products can account for a substantial proportion of a firm’s sales and profits over a relatively short time period. Innovation may be thought of as the cornerstone of success in many industries, but not all innovations are successful. Indeed, the incidence of failure in introducing new products is extremely high. Of course what is a failure for one firm may well be a successful product for another firm. It all depends upon the financial expectations of the firm. Failures are never absolute entities in themselves. The usual measure taken when evaluating the comparative success of a new product is the return on investment it generates. But of course what will satisfy one company will not necessarily satisfy another. A company accustomed to earning an overall after-tax rate of return on capital employed exceeding 30 per cent per annum will on average need to introduce new products which will generate at least this level of after-tax return on investment in order to maintain long-run profitability. Firms with different rates of return on capital may have different expectations, reflecting the nature of the industry in which they operate. In addition, firms of substantially different size, yet considering the same product-market opportunity, will also have different expectations
Managing the development of new products
A core new product concept can be viewed as proceeding from an abstract to a more specific level. Six levels of product concept development help define managerial checkpoints during development. A new product originates as an idea that is shaped into a concept, a design, a prototype, a product, and ultimately a commercial product. An idea is the highest form of abstraction a new product can take. It is usually represented as a descriptive statement, written or spoken. With ideas, a company is more interested in generating the maximum number of ideas than in being concerned whether each idea is stated completely and specifically. To become a concept, an idea must be defined more completely and more specifically (1997). However, the process of making ideas into concepts should not be hastened, or the idea generation process will be thwarted. Concept is more specific in description than an idea and should define the core benefit and the major supporting benefits. It can be a verbal or written description, an artist's rendering, or a model or appear in another suitable presentation format that depicts the idea. The concept must be defined specifically enough that it can be evaluated by the stakeholders, particularly prospective customers. In summary, a concept is a combination of verbal and/or prototype information that tells the customer what core benefit and major supporting benefits will be provided and how they will be provided (1997).
In practice, ideas and concepts are often combined and considered to be part of one creative process. Separating ideas and concepts allows ideas to remain in free form to aid idea generation, while concepts are defined more completely for evaluation by different stakeholders. A design is a preliminary outline or sketch showing the main features of something to be built (1997).New product design involves the translation of concepts into a tangible representation of the concept. Until recently all designs were on paper, but now many designs are recorded in electronic form by Computer Aided Design (CAD) (1997). A prototype is a working model or preliminary version of the final product, achieved through an implementation of the product concept. Several iterations of prototypes may be necessary before a final product is achieved. For many products, the prototype is the first full-scale likeness of the product; for others, it is a scaled-down model. For some products a prototype is not possible without at least a small-scale product launch. A product is the realization of the core product concept and the means by which users can experience true benefits (1997).
The development of the final model will be based on these prototypes and their test results, but the final product may not be exactly like any of the prototypes. A product's final definition may be the result of several iterations of development and refinement and may involve all relevant stakeholders, especially potential buyers (1997). In managing the development of new products full attention should be given on the product. The company should make sure that the conceptualization and creation phases of the product will go smoothly and with more benefits than problems.
Strategies for Mergers and Acquisition
It is difficult to justify lies or deceptions at any time during the merger and acquisition process. However, they are most likely to occur during a negotiations process in an attempt to make the acquisition more attractive to the other party. It is not necessarily unethical to pursue one's own benefits at another's expense, but the manner in which the gain is pursued and obtained affects the degree to which the actions are considered unethical (2001). Coercion can occur at several points in the merger and acquisition process. Statements made by both parties prior to the completion of a merger or acquisition process often emphasize participation by both parties in implementing appropriate organizational change, yet the process of such change can be tightly controlled by the managers of the acquiring firm. Sometimes the acquirers can act like victors and simply demand that the acquired firm's employees make the necessary changes (2001).
In these cases, they are coercing a change in culture and procedures along with other types of changes being implemented. Although such changes may not be unethical, coercive changes often lead to ineffective integration. In these cases, employees frequently resist the changes, sometimes in subtle or tacit ways. Consequently, the changes may be less effective than they would be otherwise. Furthermore, if employees feel they are being coerced, the best ones are likely to leave, causing the newly merged firm to lose valuable human capital (2001). These outcomes represent voluntary but undesired turnover and the inadvertent loss of human capital. When units from the two firms performing the same or similar tasks are combined, economies of scale are often created. In these instances, some employees become expendable after the two firms are integrated. These terminations should be handled in a sensitive and humane manner (2001).
As mergers and acquisitions are announced and implemented, employees can feel stress, anger, disorientation, and sometimes fright. When this occurs, employees may reduce their commitment to the organization and lower their productivity as well. The employees' psychological states can produce potentially dysfunctional behaviors. The integration process in mergers and acquisitions is difficult enough without including questionable management tactics and decisions (2001). Mergers and acquisitions often involve long waiting times with high uncertainty, frenzied activity, minor and major changes, and tensions and conflicts in the best of circumstances. These conditions create uncertainty and stress. If, prior to mergers and acquisitions, promises are made for both parties to participate in the implementation process, changes should not be forced on the other party after the merger or acquisition contract has been completed and signed (2001). Mergers and Acquisitions fail because some companies force other companies to instantly adjust to the culture of the more powerful company. When a company is forced to change the tendency is for the said company to commit more mistakes. The company must take the changes brought in by the mergers and acquisitions slowly.
Developing Sustainable Competitive advantage
A customer may defect to a competitor even if satisfied with the current provider because the competitor may be offering a value bundle with the perceived potential for a higher degree of satisfaction for that customer. Therefore, firms have to strive to achieve higher levels of satisfaction than their competition by providing superior customer value. This is the essence of achieving a sustainable competitive advantage. Technology alone will not provide a competitive advantage (2003). The combination of superior technology and superior employees with a service orientation will contribute to achieving sustainable competitive advantage. It also quickly becomes evident that they need suppliers as well as distributors and agents who have a similar and compatible culture. Thus, there are two strong themes in any discussion of creating superior customer value at a sustainable profit and this includes a customer-focus imperative and a service orientation ( 2003).
If all aspects of the firm and how the firm creates and delivers value to the customer are focused on the customer, the firm can provide a superior level of customer value. Such a firm is well positioned for a sustainable competitive advantage. A customer focus necessitates a deep understanding of customers and their activities, interests, and opinions around the particular value or solution that the firm is providing. It should be an attitude that is pervasive and that permeates throughout the firm such that it becomes ingrained as a culture. Once this focus becomes a given, then the firm will find itself in the mode of serving the customer while ensuring a reasonable profit (2003). Every firm in any industry provides some customer value. The firm that provides superior customer value is the one that has a sustainable competitive advantage. Firms compete with each other on differentiable aspects of the total solution. If organizations can conceptualize that every product has parts that are commodities and parts that differentiate it from others, superior value is in the augmented product, not in the conceptual core (2003).
As firms focus on customer needs and become service oriented to deliver satisfaction, there are favorable ripple effects throughout the firm. Consistent delivery of customer satisfaction persuades customers to be loyal because perceived risk in buying a product from that firm is substantially reduced. By way of their continued patronage, they become more valuable to the firm. When customers are loyal to the provider by choice, it is also in their best interest to support the provider because the prosperity and longevity of the provider is beneficial to the customer ( 2003). Similarly, with regard to employees, research has shown that when employee satisfaction is high employees are more likely to be loyal to the company. When employee loyalty is high, employees are likely to be more productive and to be providing quality products and does for the customer and everything associated with it (2003). The McKinsey 7S Framework helps in making sure that the organization runs effectively. When an organization runs well it satisfies clients and employees thus sustainable advantage is acquired by the company.
Styles of decision making found in the case study
Decision making process is done when a company wants to make new, polices, goals, and strategies. All of companies have this and it is the best way to settle problems in the company. The decision making process must come up with the best result to prevent more problems to come. The decision making process should be done accordingly and with so much care. When companies need to make decisions on certain issues they use strategic decision making process to make the best decisions. Decision makers must make decisions and take actions in this rapidly changing world. The ability to view the current situation through the good judgment viewpoint is weakened through increasing external noise and changing epitome of how people think about social, cultural, organizational and economic issues.
The style of decision making involved in the case includes thinking, extroversion, judgment and sensing styles of making important decisions. The main decision making situation that must be dealt with involves who will succeed the leader of the company. The different decision making styles assist in dissecting the information that can be acquired from the different situations in the case and in the end it guides in discerning what action should be done. The different styles of decision making helps not only in finding solution for the apprenticeship in the company but it assists in determining what actions should be done so that the company can improve its operations and have sustainable competitive advantage.
Development of a new strategy
Because any new arrangement is likely to decrease some valued benefits of past associations, and outcomes of new activities are often uneven, the period of affirming a new strategy continues to be unstable. Interaction among those in the middle of the organization will also bring conflicting interests and concerns to the attention of top executives, which can be an important impetus for developing new strategy. The true second order change will be more likely if people across the organization gain ownership in the new strategy by putting together pieces of it for themselves ( 2000). New assignments also divert attention to new issues. These factors, in conjunction with social norms about fair trial, help generate a honeymoon period following formal adoption of a new strategy. In the formal model, the affirmation of the new strategy is assumed to be accompanied by a reduction in stress, such situations out of the old strategy (2000).
In developing a new strategy the environmental analysis needed to be successful is the PEST analysis. This kind of analysis provides a wider picture of the situation in the environment and it provides assistance in determining what may give the company threats. PEST analysis can help the company prepare for problems brought by the environment, it provides information on what external environment should the company prioritize and what strategies will be enough for the situation in the environment.
Strategy in action
A specialized element of strategy implementation is addressed to the conduct of acquisitions, divestments, joint ventures, and other large reallocations of capital resources that modify the corporate structure. While some of this work can be done at the division/subsidiary level, responsibility for the policies directing these functions almost always rests at a high corporate level. This is because significant alterations of corporate structure and large allocations of capital always require the directors' approval and sometimes require shareholder approval ( 2004). Top managers, and even planning executives, seem to make a widespread assumption that, if a brilliant strategy has been formulated, it then will be implemented simply by virtue of its intellectual merit. Moreover, the conventional wisdom seems to be that forming strategy requires more talent, if not intelligence, than implementation; implementation accordingly is a matter to be delegated down the chain of command to managers and supervisors who probably weren't involved in forming strategy in the first place. There is the fatal flaw. Senior management assumes that strategy will be self-fulfilling. To the contrary, we have concluded that there is no such thing as a self-fulfilling strategy. Implementation of strategy surely calls for methods and skills much different from those required to form good strategy. However, there appear to be far fewer methodological guidelines for implementing strategy than forming it ( 2004).
Whether it is through consensus or the more direct device of a lucrative incentive compensation program that links rewards to objectives' accomplishment, individuals must be more than just willing to enact the firm's strategy; they must be enthusiastic about doing so. The level of motivation must be sufficient to sustain persistent, vigorous effort in the pursuit of strategic objectives (2004). A firm's ability to draw upon all three categories of generic implementation capabilities balanced resources, a properly aligned organizational structure, and effective motivation will be greatly affected by leadership. Indeed, leadership combines all three of these implementation capabilities. Leaders themselves are valuable resources. They provide and sustain motivation throughout the organization, especially when difficult obstacles are encountered and problems must be solved. Finally, leaders are the ultimate structural integrating mechanisms; good leaders guide organizations in adapting and learning from experience and in changing strategy when it is necessary to do so (2004).
Resistance to change can take many forms and be pervasive throughout most organizations. There seems to be a natural resistance to strategic planning itself. Moreover, there is a tendency, especially at higher levels of management, to persist in the pursuit of obviously unsuccessful strategies in a form of behavior that has been called escalating commitment (2004). Managing resistance to strategic consensus thus may be one of the most difficult of all strategy implementation skills to master. Here is where the difference between conceiving and implementing strategy becomes most apparent. Top management may be able to conceive brilliant strategy in bursts of creative insight, but realizing strategy requires sustained, vigorous, focused effort. Forming strategy is an intellectually stimulating exercise, but implementing it is just plain hard work ( 2004). Thinking of what strategy to use is a hard thing to do, implementing it is even harder. In implementing the strategy the company must be prepared for problems they might encounter.
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