Corporate Strategy Assignment: Hornby Hobbies Limited

CORPORATE
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
STRATEGIC ISSUES OF HORNBY HOBBIES LIMITED..........................................................1
RESOCURES AVAILABLE TO THE COMPANY AND THEIR KEY CAPABILITIES ..........3
IMPACT OF ORGANISATIONS COMPETITIVE STRATEGY ON STRATIGIC ISSUES
..........................................................................................................................................................5
CONCLUSION ........................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Every company has some vision, they make long term plan for forwarding towards their
mission. Strategy is the planning of actions for attaining overall aim of the firm. Hornby Hobbies
Limited is Britain based by toy trains company (Grinblatt and Titman2016). They manufacture,
develop and supplies hobby and supplies hobby. They are running their business in UK and they
offer variety of products in various categories like locomotives, spares and accessories, wagon
coaches etc. This assignment will discuss about three strategic issues of mentioned enterprise.
The factors which give competitive advantages to the firm will also become part of this project.
The role of competitive strategy regarding strategic issues will be included in this report, this file
will also cover some suggestion for improvement.
STRATEGIC ISSUES OF HORNBY HOBBIES LIMITED
If a company do not work according to plan then it is impossible for them to reach the
target which they have set for attaining organisational objectives. Strategic planning focuses on
finding the key issues which may become significant hurdle for the company in present or
upcoming time. The day a day problems can be resolved by making good tactics but the main
trouble need special attention because they have capacity to the derail the compete operation of
the organisation (Purce, 2014). Their was a time when many companies were not focusing on
making plans, but gradually they understood its importance that it can save them from
unexpected loss and it can assure optimum utilisation of the available resources.
The actual definition of strategic planning is '' finding and addressing unresolved main
issues''. Their is general perception that an ''issue'' is always negative, it will create trouble for an
organisation but this thinking is not completely right as the sometime problems can be positive
and it can make a favourable impact on an enterprise. Hornby Hobbies Limited is current facing
loss because they are failing to resolve some of they key hurdles. The future of mentioned
company is in dark and they can solving key strategic issues:
Huge expenditure of technology – Every organisation know that if they will not
upgrade their technology then other companies may earn some competitive advantages on them.
Hornby Hobbies Limited started online services, their customers could buy their products
through without making any physical contract. This company signed a deal with the subsidiary
of PayPal (Rugman and Verbeke, 2017). Their most significant problem for cited firm is that
their profit is going down but still they have to invest huge sum in adopting latest technology so
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they maintain their position in the industry where they are operating from many years. This
organisation want to increase their sales like of all companies, but the financial burden of
adopting latest techniques of working is hampering their profit. They are decreasing their product
line so they can reduce their capital spending. This firm is trying to minimise their losses but the
expenditure on technology is failing their effort. The main objective of this company is to
improve their financial position, if this key strategic issue is solved in upcoming 2-3 years then
they may face much bigger problems in upcoming time.
Why it is ''Strategic''
For earning more money, Hornby Hobbies Limited has to upgrade their services and
products. They have to use new technology and spend large sum on buying modern equipments
but their condition is not sound (Sethi, 2012). Senior managers of this company wanted to
increase profit of firm, they thought that if they will adopt latest technology then customers will
get better product and services and this will make a positive impact on their revenue, but this
strategic did not work according to their plan because the revenue did not grow according to the
expectation.
Problems with suppliers - Hornby Hobbies Limited was increasing their dependence on
the Chinese suppliers because they were providing goods at low price. Their quality was also
fine. Some of they key vendors has stop their supply and this is making a negative impact on
operation of the company. This firm want to increase their profitably but reducing cost of
production and increasing their sale by entering in emerging market but these small hurdle
become key strategic issues because they they stop have significant amount of contribution in
widening the losses of Hornby Hobbies Limited. This is not a new problem fir cited firm, it
started in 1990 but the top level management of the enterprise face to solve this key issue. They
always focused on finding temporary solution and never worked on permanent answer of
strategic matter.
Why it is ''Strategic''
When Hornby Hobbies Limited shifted their production from UK, they thought that it
will help them in reducing their cost of business (Kleinbaum and Stuart, 2014). Manufacturing in
European country is much expensive compared to Asian region. Their strategy was clear, reduce
the amount of production cost and earn more profit. But they fail to keep good connection with
their foreign suppliers and it raise a severe strategic issue in-front of the enterprise.
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