This report analyzes Mainfreight's strategic management practices, including its vision, mission, industry environment, global perspectives, and functional strategies. It also critically evaluates the success of Mainfreight's strategies, analyzes its external environment using PEST analysis, and recommends ways to improve its strategic performance.
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Strategic Management
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Table of Contents INTRODUCTION...........................................................................................................................3 PART A...........................................................................................................................................3 Organization's strategy...........................................................................................................3 Evaluating industry environment...........................................................................................4 Examining the global perspectives of the company...............................................................5 Critically analysis its success.................................................................................................5 Presenting two functional strategies for Mainfrieght.............................................................6 Critically evaluating the problem that company facing.........................................................7 PART B............................................................................................................................................8 Examine external environment of Mainfreight......................................................................8 Describing organization's competitive advantages and recommending ways for evaluating success....................................................................................................................................9 Critically evaluating the success of a firm...........................................................................10 Describing the corporate level strategy................................................................................12 Evaluating the mix of capabilities, competencies and personal attributes of BOD.............12 Describing organizational structure......................................................................................14 Analyse some structural characteristics and issues that the organization may face.............14 Recommend cultural environment.......................................................................................14 Critiquehowtheorganizationreviewsitsstrategicperformanceandadjustsstrategy accordingly...........................................................................................................................15 CONCLUSION..............................................................................................................................15 References......................................................................................................................................17
INTRODUCTION Strategic management mainly involves the preparation and implementation of some major goals. Further, it is a continuous planning, monitoring and analysing the assessment that is necessary for the firm in order to meet the goals and objectives. Therefore, it is the process that mainly involves cross functional business decision prior to implementing them. In the same way, the report main aim is to provide a knowledge about strategic management that helps to run a business smoothly. Further the chosen firm for this report is Mainfreight which is logistic and transport company and the company operates its brand at different countries and also consider one of the largest freight company as well. The report is divided in two parts such that in Part A- study will describe company's strategy with its mission and vision, then using Porter five force model in order to evaluate the industry environment. Further, it also examine the global perspectives of the company that needs to implement the strategy. Then report suggest two functional strategies and describe one critical problem as well. In Part B, study, uses PEST analysis in order to examine company's external environment and recommending some ways that help a business to its success. Further, report also show mix of capabilities and competencies of Mainfreight and describe its organizational structure as well. Lastly, it critically analysis its strategic performance and strategy as well. PART A Organization's strategy Mainfreight is one of the leading company and also provide the best logistics and transportation facilities to their customers. In 2012, the company also receive an award for its best growth strategy. Such that the company provides a global supply chain solutions and moreover, company's presence in Australia also continued to expand through acquisition and branch proliferation across strategic location (Mainfreight company's growth strategy,2019). Vision:To provide the best logistic services to their customers and become a top freight company at international level. Mission:The company's mission is to reorganized as a best logistic service providers for the customers and also deliver the tailor made and provides the best sustainable logistic solutions.
Evaluating industry environment. In order to determine the competitive advantages, Porter Five force model is used which determine the company's external environment. This is as mentioned below: Threat of new entrants (low):The Mainfreight faces low threat of new entrant, it is so because the technology provides new business models and due to sharing some new business model, the company's suppliers and customers are not use it, while opening new company. That is why it faces low threat and even it requires high investment for new start up which is not possible for ever businessCordell & Thompson, (2019). Thus, by utilizing the latest technology and offer interactive benchmarking for existing shipping company will help to cope with such situation. Threat of substitutes (low):As the company is fast growing company and also offer variety of products to their customers at different prices. In the same way Mainfreight also provides different ranges from warehousing, supply chain to transport and it has been analysed that the only substitute are offered to transport but for they have to pay extra cost. Therefore, the customers did not have much option for the services and at last they choose low budget services only. In the same way, Mainfreight also offer the services at low and reasonable rates thus it helps to attract the customers towards itScholz, (2019). Rivalry among existing firms (high):Mainfreight faces tough competition and on the other side, due to low differentiation, firm also competing with their prices and quality of services. Thus, the high competition also makes it hard in order to increase their market share. Further, there are many rivals such as FedEx, GAC and the main reason of competition is related to price and quality and when the customer find some better or reasonable options then they easily switch. Bargaining power of suppliers (low):Mainfreight also faces low bargaining power of suppliers such that the suppliers who provides services in auto mobile industry in which they offer lightweight vehicles and cranesAbalkhail, (2019). Even it has been also analysed that suppliers are abundance in market and company chooses on their differentiated prices. BargainingPowerofcustomers(low):Ithasbeenanalysedthatminimum differentiation and low switching cost also gives a lot of bargaining power to customers. But on the other side, now customers are also expecting to receive fast shipment service with flexibility and transparency at low price. Apart from this, buyers also have the power to switch because of
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the availability of large number of the providers and low cost, further they are not amassed their power that is reduces to medium as well. This shows that Mainfreight also faces low bargaining power of customers and they can overcome this by offering the best quality of products or services with low rates. Examining the global perspectives of the company There are some global perspectives which needs to be followed by the company while implementing the strategy such as: Strategy and policy:It is the major perspectives, that Mainfrieght should comply, such that policies refers to guidelines, methods, rules and forms that helps to support and encourages the work towards stated goals. Therefore, the quotes firm is always adhere with some policies and strategy while implementing the strategy at global level and it has been analysed that every country has their own rules and policy that is why it is quite essential firm the firm to adhere all the laws and policyDiekmann & Franzen (2019). Technologyandglobalization:anotherimportantperspectivethatMainfrieghtis monitor and It is also consider the key factor for strategy process and as a result, due to rapid change in the technology, it is quite essential for the firm to adopt all new techniques in order to stay ahead in the competitive edge. On the other side, as Mainfrieght also operates at global level. Therefore, within a global environment, there are various consideration during strategy implementation such as political factor, legal and environmental factorNandan, (2019). Thus, to fulfil this, the company should aim to capture and sustain the competitive advantages in order to make sure that strategy implementation process will help to succeed in the global area. Culture, staff motivation and adaptability to change:Culture refers to the system of shared belief and also affected the managers and employees which directly influence the strategy as well. In order to expand the business at international level, the company must motivate the staff, and they should also understand the need of change in a business. Moreover, Mainfreight also provide some rewards' system to their employees that helps to boost their morale and to adapt quickly changes whenever it comesAdekola & Sergi, (2016). Critically analysis its success It has been critically analysed thatMainfreight uses all the global perspective while implementing the strategy into a business at global level. Such that before implementing new
strategy, it critically evaluates the pros and cons such that it analyse the external environment of the company and then carefully implemented the actions as well. Further, in order to ensure the success, strategy should also be translated carefully which means that the strategy must comply with all rules and guidelines for all daily activities and for that, the managers also direct and controlactionssothattheycaneasilyadjusttheiremployeeswithchanges.Suchthat Mainfreight working culture is quite good and adjustable such that it also motivate the staff members in order to implement the changes and it has been analysed that culture of the firm should be compatible with the strategy and It should aspire to succeed that make sure that strategies are aligned to an organization cultureBocken, Ingemarsdotter & Gonzalez, (2019). However, it has been critically evaluated that technology and globalization also helps in the success of a strategy. Such that the firm is also use all technology and this will help to succeed the strategy implementation as well. On the other side, within the global environment, Mainfreightalso monitor all external factor that helps a business to leads a business towards success. Even in order to achieve the benefits of globalization, the managers of Mainfreight needstorecognizewhenanindustryglobalizationdriversprovidesanopportunityfor implementing the global strategies. Therefore, it is also recommended to the firm to determine the political, economical legal and environment factors of every country that helps to run a business smoothly. In this way, the firm also implement the strategy in better way and apart from this, the company should also comply with all the legal laws and policies that will help a business to sustain its brand image and also stay ahead in the competitive edge as well. Presenting two functional strategies for Mainfrieght Functional strategy is the organization plans that is prepared for different functional areas ofacompany'sorganizationstructuresuchasmarketingstrategy,financialstrategyand production strategy. Even it is the part of overall corporate strategy that is implement in every functional area. The firm also uses some functional strategies, therefore, it is to be suggested to Mainfreight, to use two functional strategies such as: Human Resource Strategies:This strategy is mainly concern with HR planning, recruitment and selection. Further it also deals with training and development, compensation and rewards and labour relationsGerschewski, Rose & Lindsay, (2015). Apart from this, the functionalstrategiesinHRMalsoguidetheeffectiveutilizationofHumanresourceof
Mainfreight so that it will help to achieve an objectives of a firm and also provides satisfaction and development of employees. In the same way, firm should also adopt HR as a functional activity which supports the strategic initiative and the managers of a firm should also be capable of implementing strategy and also carry out some activity that further helps to support the strategic plans as well. Production and operations management:It is one of the main function of a business such that it consist of all the activities that transform all the input into goods and services. This function strategy also provides decisions regarding some technical core and quality, capacity and technology as well. Further, the operational strategy also allocate the resource that further support the business and its strategic goalsSantiago,Andrade & Dawson, (2017). Apart from this, the production strategy also defined what Mainfreight is produces and purchases from the suppliers so that it will help to run the business smoothly and also determine how far the firm has to worked for the production chain. Moreover, this functional strategy is also depended upon some basic characteristic such as cost efficiency, quality, dependability and flexibility. This functional strategy also coordinated with all other departments and also take review that these strategy helps to attain the objectives of Mainfreight or not. Critically evaluating the problem that company facing Mainfreight faces communication as a critical problem that affect the entire business and even the operation or production as a functional strategy. Such that in the firm, if there is a functional strategy exist and communication is the problem which an organization faces, then business faces many difficulties to understand the task (Production/ operational Functional strategies,2018). Even due to lack of communication, the message is not communicated to others and as a result, the aims and objectives are not attained. In order to response this problem, it has been critically evaluated that Mainfreight should check or understand the needs and task on regular basis through staff meetings and there should be an open discussion of a strategy whichever is implemented in the firm. Therefore, this helps to overcome the problem and run the operational or production management in smooth way so that through an open discussion, the company's all departments are easily communicates and they easily come to know about the aims and objectives that needs to be achievedMay, Warner &
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Wingler (2017). On the other side, for Mainfreight, should not only simply communicate the strategy but develop the strategy that helps to convey two way messages with their employees. PART B Examine external environment of Mainfreight Industry:Mainfreight is in logistic and transportation industry By using PEST analysis, the company easily determine the factor that affect the external environment, which is as mentioned below: Political factorï‚·It affect the company's overall performance such that Mainfreigth operatinginlogisticsandtransportingservicesatdifferent countries and that is why, firm needs political stability of the country. ï‚·Apart from this, Mainfrieght also follow the wage legislation as it is describe by the government of country in which the firm pay minimum age to their employees and also promises for pay extra for overtime. ï‚·Apart from this, due to sudden change in tax rates, then price of products are also change and as a result, the customers are not spending much amount on the services. ï‚·Further,thereisaneedtofollowallindustrialsafetyand regulations in service sectorFrolova, N. A., (2019). Economic Factorï‚·The factor generally deals with the inflation rate of the country and as logistic industry operate at different countries, such that when there is a high price in the products, then the company has to manage the prices of the products. ï‚·Apartfrom this, it hasbeenanalysed that ithasskilllevel workforce who helps to make company successful.But on the other side, the firm also Social Factorï‚·Society's culture and the way of doing things also affect the company'scultureandithasbeenanalysedthatwhenthe customers find some new stores who offered the best services with
low rates then they shift towards them. ï‚·It has been analyse that educational level brings more social development than any other component do. ï‚·In the same way, it is quite necessary for an industry that they have to provides the best services to their customers so that it will help to attract them towards a firmGleiser & Tamarit, (2018). Technological Factor ï‚·This factor boost up the business financial performance such that Mainfreight also uses latest technology in its working area that helps to boost up the working performance. ï‚·Further, the company should use all the advance technology into its working place so that it will assist a business to raise its overall working performance. Describingorganization'scompetitiveadvantagesandrecommendingwaysforevaluating success Todeterminethecompany'scompetitiveadvantage,companyusesPortergeneric strategy which is as mentioned below: Cost Leadership strategy:It is one of the traditional method that helps to meet the objectives. Using this strategy, Mainfreight sell their products at low rates in order to earn higher profit and also gain a market share as wellReid, Gutsman and et.al., (2019). Even this strategy also helps a business to raise the level of production, high capacity of utilization, lean production methods as well. Differentiation:This strategy is used by Mainfreight for development of a products and services in which the company offer unique attributes from their rivals. By offering unique products, the company also increases prices of offered products and as a result, it increases the profitability. On the other side, the risk which is associated with this strategy also includes the limitation by a competitors and also changes the taste of customers. Focus:This strategy ore on a narrow segments and with that segments, the company achieve cost advantage and differentiation. Therefore, there is a need to focus on a particular products or services so that it will help a business to stay ahead in this competitive world. This
strategy is also used by Mainfreight in which it enjoys high degree of customer loyalty and also invulnerable loyalty discourages other firm from competing directly. Amongall,thefirmusescostleadershipstrategyforanalysingthecompetitive advantages because ithelps to meet the objectives. Further, company also sell their products at low rates in order to earn higher profit and also gain a market share as well. This way, the competitive advantages can be measures. There are some ways through which the success can be evaluated such as: ï‚·By checking the customer satisfaction, Mainfreight can be easily measure the success. Such that it has been analysed that the customers of Mainfreigh are satisfied with services offered by firm and it is so because it provide the best quality of products with different discount strategy as compared to its rivalsFainshmidt and et.al., (2019). ï‚·Through its employees workingis another ways through which Mainfreight can be analyse the success. Mainfreight employees has enough knowledge that helps Mainfreiht to spend less on training sessions. As a result, it helps to increase sales rather that giving extra time on providing training to their employees. ï‚·CompetitionMainfreight provides high quality of products as compared to its rivals becauseitscompetitorsmainlyworkonmaximizingtheprofitwhileMainfreight employees work together in order to increase the network. As a result, it will help to get the long term growth as well. ï‚·Using Transportation service:Mainfreight uses advance technology and fastest way of transportation as compared to its rivals. Even its transportation is effective which helps to deal with hazards as well while on the other side, its rivals did not use the same. Critically evaluating the success of a firm The company uses customer satisfaction level as a strategy in order to evaluate the success of a business and even it keeps checking the financial viability as well that helps to determine the success of a business for a particular period. Year2009201020112012201320142015201620172018 Profitabilit y2.823.231.924.443.54.664.013.844.354.12
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Interpretation:From the above, it has been interpreted that, the company financial performance is increase such that its profitability is sudden increases in 2011 to 2012 and there are lot of fluctuation in the respective years. Further, it has been also interpreted that now company has stable financial situation and it also achieves its aims as well as objectives. Areas that evaluate the success of an organization: ï‚·Organization performance:the success of Mainfreight can be measures by using Leading indicators such that it helps to measure the action which will affect the future organizational effectiveness. These indicators will help to calculate the profitability and sales that clearly shows the success. ï‚·Employees satisfaction level:If the employees are satisfied and happy, then the productivity automatically increases and in the same way, as the company deal at global level, which means that its employees satisfaction level is high and thus success can be evaluated. ï‚·Level of learning:It has been analysed that the Mainfreight's employees are learn differentthingsfromthecustomerswhichfurtherhelptoshapeupthestrategy. Therefore, effective learning and knowledge will help a business to leads towards success.
Describing the corporate level strategy. Corporate level strategy is an act that is used to gain the competitive advantage by selection and management of a mix business in order to compete in different industries. The firm did not uses any corporate level strategy and that is why, it is recommended to the firm to useGrowth strategy, which could be implemented by expanding the operations both globally and locally and it is also based upon the internal factors and uses different key metrics such as sales/revenue and total assetsDanso and et.al., (2019). It has been analysed that by using the strategy, Mainfreight also participate in a value chain of a product by taking help of suppliers as well. Therefore, firm also uses Vertical growth strategy under growth strategy is quite beneficial for a firm and it can easily track the growth of one product or services that is offered by the company. Corporate level strategy is the strategy that is made by top management for making the best decision for the welfare of a company. Further, it is also concern with the efficient allocation and utilization of scarce. The firm is reach towards its success by using growth strategy because implemented by expanding the operations both globally and locally and it is also based upon the internal factors and uses different key metrics such as sales/revenue and total assets. Using this concept, the company also focus on operational process by integrating a key segments and also analyse that whether, the business is provide the high quality of service to their customers or not. Thus, it is beneficial for the business to use this strategy for its further growth. Google :The corporate level of strategy is to accelerate the innovation and strengthen brand loyalty by transforming the changes. Further its strategy also includes strategic planning at corporate level. Therefore, it uses business diversification strategy. Apple:The quoted firm strategy is to innovate the various products in their internal process. It uses business stability strategy. Nokia :The corporate level strategy followed by the firm is business growth strategy. Evaluating the mix of capabilities, competencies and personal attributes of BOD The list of BOD of Mainfreight are as mentioned below: Strategic governance leadership:
This factor helps to take the main decision by the Board of directors and Bruce Plested (Executive chairman) and he was appointed in 1978 and he also shares his vision with the company's team and also bring focus on quality and culture. He is also well-educated and his beliefs are also related to recycling and sustainability that further helps to continue to positive shape of company's behaviour. Informed decision: In this, the shareholders are involved and the BOD are also involved who help to take the decision for better manner. Such that Don Braid (Group Managing Directors) has more than 328 years of experience in freight industry and his leadership is also underpinned by the strong belief in the firm. Further, he also has the capabilities that provide high range of quality and also provide supply chain solutions as well to their customers. He has a good communication skills that help to motivate their team members (Mainfreight's Board of directors,2018). Business acumen: This are the person who help to take the decision for the welfare of the company and also take risk in order to sustain the image of company. Such that Bryan Mogride (Independent director): He is financially strong and plays an executive and board roles. He has a good business skills that support to not for profit organization and follow the pragmatic approach which is highly regarded in Board table. Simon Cotter (Independent director), was appointed in 2013, such that he is working as a main advisor for the acquisition, debt structure and other matter as well, this shows that he has a strong financial knowledge and business acumen as well that helps a business to run towards success Sun & Lee, (2019).Kate Parsons (Independent director), was appointed as a BOD in 2017, such that her knowledge of high technology companies is welcome addition for company's boards' capabilities. Her familiarity with some complexities of acquisition provides sudden change and growth for a firm. Communication: In this, the employees are also involved in the decision making so that it will help to meet the aims and objectives in better way. Apart from this, through effective communication, all the management and the leaders are clearly effective communicated with their employees in order to reach with defined aim.
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Describing organizational structure Mainfreight should follow functional organizational structure which is mainly used to organize the workers, and they are also grouped which is further based upon their specific skills and knowledge. The main reason for suggesting this particular organizational structure is such that it helps Mainfreight to delegate the task to each department, and then they all also report to their senior managerCirillo (2019). In this way, the employees also have a clear idea of the hierarchy of a firm, and they know their reporting manager as well, therefore, through this, they feel secure and it further helps them to perform better in their working as well. It has been analysed that when the work is divided into smaller groups, then the company will easily manage their work, and they can easily attain the goals of the firm. Analyse somestructural characteristics and issues that the organization may face Characteristic: ï‚·It is one of the strong hierarchy in which the position and function are clearly specified and on the other side, each department is divided into individual department, and they all have their specific functions as well. ï‚·This is the best suitable strategy as a producer of standardized goods and services at large volume and low cost. The main characteristic of this structure is such that it consist of many activities such as coordination, supervision and task allocationDarabaris, (2019). Issue: ï‚·Using this structure, the employees of Mainfreight may start feeling stability and boredom as well and even they did not take any new challenge and as a result, they start feeling unenthusiastic for a job as well. This affect the overall productivity of an employees and that is why it is considered the biggest issue for Mainfreight, which needs to be resolved. Recommend cultural environment It is to be recommended to Mainfreight that it should use the best culture environment that helps to make their employees comfortable in the working environment. There is a need to provide a better working culture to their employees because they are more likely to enjoy their time in workplace and on the other hand, if they are not comfortable, then their productivity is also affectedHuda and et.al., (2019). Therefore, by providing positive working environment to
their employees and hire those candidates who feel comfortable in Mainfreight will help a business to achieve the defined goals. Apart from this, it is also recommended to a firm to use reward system, so that it will help to make employees feel motivated and as a result, it also helps to increase their working efficiency as well. Reward system generally increases the production level of the firm and raise company's brand image as well. Further, by using some reward system such as monetary benefit when employee performs extraordinary, internal promotion option may also helpful for a business. Critique howthe organization reviews its strategic performance and adjusts strategy accordingly In order to review the strategic performance, Mainfreight should use these steps such as: ï‚·Initially, Mainfreight should first review the strategy performance and analyse whether the plan is affected by some external environmentHuber and et.al., (2019). ï‚·Using some key performance Indicators, the company should measure the performance of each phase and these are Benchmarking, Balance scorecard etc. These will help a business to determine the exact performance. ï‚·Next stage for reviewing the strategic performance is to communicate all the changes within an organization so that all the employees are aware about new changes. In this ways, the strategic performance is reviewed and then Mainfreight can also adjust a strategy in better way or according to situation as well. CONCLUSION By summing up above report it has been concluded that strategic management helps a company to leads towards a success. In the same way study concluded that competitive advantage by using Porter five force and also uses advance technology to lead a business. Mainfreight should use Human resource and production as a functionalstrategy and faces communication as a problem. Further, study also concluded that by using PEST analysis, company will determine its external environment and it also uses cost leadership as a competitive advantage strategy and then uses growth strategy as a corporate level strategy that helps Mainfreight to grow its business as well. In addition to this, it has been concluded that company may uses functional organization structure that helps to delegate the task in other groups and lastly, report concluded that the cultural environment of the company should be comfortable so
that it will help make their employees comfortable and start using promotion and monetary benefit to their employees for their good performance. Firm should also uses KPI in order to review its strategic performance and adjust the strategy as well.
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