Organisational Strategy Report

This report analyzes the organizational strategy of Pilkington Glass, a leading glassmaking company. It examines the macro-environmental factors, industry position, internal resources and capabilities, and stakeholder perspectives using PESTEL analysis, Porter's Five Forces model, and SWOT analysis. The report also explores the stakeholder theory and stakeholder mapping to understand the company's relationships with key stakeholders.

ORGANISATIONAL
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
Macro environmental factors......................................................................................................3
Industry position..........................................................................................................................3
Internal resources and capabilities..............................................................................................3
Stakeholders perspectives. .........................................................................................................4
CONCLUSION................................................................................................................................5
REFRENCE.....................................................................................................................................6

INTRODUCTION
Organisational strategy is a collection of a clear vision, connected with a significant
mission and purpose, outlined with some broad steps to assure that right resources and plans are
in place to accomplish business objectives (Aldea, 2015). It sums up all the actions that designate
to take in order to accomplish long term business goals. Organisation undertaken in this report
Pilkington which was founded in 1826 and is a glassmaking company which designs
windscreens for auto mobile industries. This report will explain the macro environmental factors,
industry analyses, internal resources and capabilities and stakeholders perspectives.
Macro environmental factors.
PESTEL ANALYSIS
PESTEL analysis is an tool which is used to identify the impact of macro environment
forces on an organisation strategic plan. It is used by companies to track the environment they
are operating in or are planning to launch a new product or services (Cserháti and Szabó, 2014).
Macro environment factors include all the factors that influence an organisation, but are out of its
direct control. Pestel analysis includes political, social, technological, legal and other
environmental factors affecting an organisation which can be further studied below:
 Political Factors: These factors includes Taxation policies, Regulatory practices and
Government systems. Due to increase in regulatory scrutiny. Pilkington has to mange
diverse regulation as it is presented in different market segments. It is important for
organisation to keep itself updated with other countries regulations in order to work
globally. Lower taxation policies have resulted in increased profits and it has also enabled
company to invest more in research and development. Which will help company to work
on its existing product offering and also in its expansion to different market segments. It
is also important for company to monitor other government policies related to business
environment regulations in order to survive in the industry (Dhliwayo, 2014).
 Economic Factors:These factors are determinants of an economy's performance that
directly impact a company. Which includes efficiency of financial markets, skill level of
workforce and different government intervention. The economic performance of the
market directly impact the companies performance. If the economy is blossoming it will

give different opportunities to the company to expand and increase its functional areas
across industry on the other hand if it is declining it will effect the level of generated
revenue and sales as well.
 Social Factors: These factors focus on the social environment and identify emerging
trends. With the rise in liberalization the attitude toward health and safety are getting
tense. Company needs to keep itself away from these attitudes because of the high cost of
failure (Eason, 2014). Where as certain economic factors such as Media outlets can play
an important role in influencing customers. As the social media is growing rapidly
company can take advantage of it for attracting customers and building strong marketing
networks.
 Technological Factors: These factors consider the rate of technological innovation that
can effect a companies performance. Companies needs to keep a close eye on the level of
technology used by its competitor in order to satisfy customer. Factors like use of latest
technology can facilities organisation to work on lowering its cost of production on other
hand the cost involved in up gradation of technology can put a financial burden on the
company.
 Environmental factors: Environmental norms are also altering the priorities of
companies. Companies are producing products based on environmental norms then
catering to traditional value propositions. Extreme weather is one of the factor that is
adding cost of operation of the Pilkington glass. As it effects the supply chain and
company have to invest more in order to make it more flexible. On the other hand by
taking initiative such as recycling companies can reduce cost and attract customers by
building a strong brand image.
 Legal Factors:An organisation must understand what is legal and allowed within
territories they operate in and should act accordingly. Factors such as Business laws, laws
related to intellectual property, patent, copyright and data protection laws are influencing
the performance of the organisation (Hernaus, Bosilj Vuksic, and Indihar Štemberger,
2016). Company needs to work accordingly to the set government rules and regulations
in order to avoid law suits which involves large amount of cost and time. Which can be
used in other department such as research and development and promotional activities
which will help organisation to serve its customer in a better and efficient way.

Industry position.
Porter's five force model
It is an competitive analysis model that is developed to analyse the profit potential of a
market. The combined power of porters five force model determines the eventual profit potential
of the industry. Companies need to study these factors in order to identify threats and ways to
address them in an effective way (Lancaster and Di Milia, 2014). It also needs to keep an close
eye on its existing competitors and new competitors in order to cope up with their marketing
strategies and increase their profit potential. Based on five force analysis management can decide
how to influence or to exploit particular characteristics of their industry. It can be further studied
below:
 Competitive rivalry: Glass being a commodity, price plays an important role in
competition. There are companies such as Masco, PPG and Guardian Industries that are
giving a high level of competition to the company in the industry. These Companies have
come up with strong brand and aggressive strategies in order to tap more market share.
Hence there is intense competition with in the industry and it also faces competition from
unorganized sector consisting of local manufactures producing similar product and
offering it to customers. As customers are price sensitive they tend to get attracted toward
low price product which will effect the sales of the company.
 Threat of new entrants: It refers to the entry of new companies in the industry. Threat
of new entrant in this industry is low because it requires high level of capital investment
to enter in this industry. It also requires high level of technology and highly skilled
workforce which may be difficult to collect for a new entrant. As the players of this
industry have already achieved economies of scale it deterrent the entry of new players.
 Bargaining power of suppliers:It is an assessment of how easy it is for suppliers to
manipulate companies in order to extract higher prices from them for the supply of raw
material (Maylor, Turner and Murray-Webster, 2015). The power of supplier is high due
to availability of the raw material. In order to be cost effective manufactures needs
suppliers that resides within the prescribed distance. Otherwise the transportation cost

will increase and eventually it will increase the cost of product. This effect the bargaining
power of pilkington. Therefore there is high level of powers in the hand of suppliers.
 Bargaining power of customers: It is an assessment of how easy it is for buyers to drive
prices down. The Bargaining power of customers is low because of the nature of the
industry. This is because of low switching power of end customers in the industry due to
the non availability of perfect substitute of the product.
 Threat of substitute: It refers to the availability of substitute product available in the
market. As organisation has already established itself as a strong brand in the market.
Still it faces competition from local manufacturers and other competitor. They are
producing smilier products and with the use of aggressive marketing strategies trying to
capture more market share. Therefore the threat of substitute in the industry is high.
Source : Porter's Five Forces Model. 2019
Illustration 1: Porter' s Five Forces Model. 2019

Internal resources and capabilities.
The internal resources and capabilities of the organisation are identified by applying
SWOT analyses. It is an analytical technique which is used to determine and define various
important characteristics of strength, weakness, opportunities and threat (Nankervis and et. al.,
2016). Pilkington will apply this to identify internal strength and weakness and external
opportunities and threats. Following is the SWOT analyses of the company :
Strength
 Independent company which is listed
on London stock exchange.
 Innovative in designing glasses.
 Huge entry cost is a strength to prevent
another player enter in a industry.
 High demand in auto mobile and
infrastructure industries.
 Uses renewable sources of energy.
 One of the biggest brands in Japan
which have even acquired many small
global brands.
Weakness
 Diseconomies of scale.
 Overleveraged of financial position.
 Poor supply chain.
 Capital intensive market.
 High internet and energy cost.
 Need greater amount of investment in
packaging and transportation.
 It has less brand awareness in global
market compared to its competitors.
Opportunities
 Bright future through efficient
innovation in research and development
department (SWOT Analyses, 2019).
 Expansion of applicability and market
into new segment like solar.
 Increased acceptance of green building
concept.
 It can do aggressive branding to
increase its brand awareness.
Threat
 Faces strong competition from top
companies.
 Risk of interest rate as this company is
capital intensive.
 Risk and danger to the employees while
manufacturing and producing glasses.
 Threat of substitutes products.
 Changing demographics.
 Shortage of skilled human resources in

 This can also leverage its distribution
network globally to enter into new
segments.
some parts of the country.
 Political risk in countries where the
government is not stable.
Stakeholders perspectives.
Stakeholder is an individual, group or an organisation which has a strong impact on the
result of the task or business objectives (Nieboer and Gruis, 2014). They can have positive or
negative influence on the business goals. These stakeholders can be the customers, employers,
employees, suppliers, distributors, etc.
Stakeholder theory of Edward Freeman
This theory aims for a business to create as much value as possible for stakeholders. It
holds that a companies stakeholders are anyone who is affected by the acts of the company. This
determines that how a healthy company never losses sight of everyone involved in its success. It
includes stakeholders like employees, vendors, suppliers, owners, community, local ecology,
community groups, oversight organisation, governmental bodies and competitors. This theory is
more crucial in global economy as the increasing competetion puts pressure on the company to
treat its stakeholders effective and efficiently so that they will contribute with their full potential
in accomplishing organisational goals and objectivs.
Stakholder Mapping
This process is useful in identifying the key stakeholders of the company who are
interested in the results of the company. Once all the stakeholders are identified then they are
mapped or cataegorised according to various levels of engagements. It can be done according to
the two levels that is level of interest and level of influence. By interest it means that staeholders
are affected but they do not hold any power to influecne the requirements. Whereas, by influence
it signifies that stakeholders have power in seting and modifying project requirements. Mapping
of stakeholders is a visual excersise which can munally map the stakeholders or can use the
software to perform the actions. After mapping effectively, they create an action plan. It is useful
for the success of the project which involves the number of stakeholders which will help in better
managing their expectations. This can also be taken as a risk management technique because
when stakeholder requirements will be fulfiled and they will be happy then this will reduce the

risk of failure as they will work with full zeal and confidence by staying motivated in the
company (Omotayo, 2015).
CONCLUSION
From the above report it has been concluded that organisational strategy is dynamic long
term plan that maps the route towards the realisation of a companies goals and mission. Every
organisation needs to evaluate the various strategies for accomplishing business goals and
objectives effectively and efficiently. The PESTLE analyses is applied to analyse the macro
environmental factors which has a strong influence on the company. Porter's five forces model
is used to determine the level of profitability and competitive advantage. SWOT analyse is done
which has determined the various strengths, weakness, opportunities and threat for the company.

REFRENCE
Books and Journals
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Online
SWOT Analyses. 2019. [Online] Available Through :
<https://www.mindtools.com/pages/article/newTMC_05.htm>.

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