Strategic Management in Large Scale and Small Scale Organization - Report

Added on - 28 May 2020

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Running head: STRATEGIC MANAGEMENTStrategic ManagementName of the studentName of the universityAuthor note
1STRATEGIC MANAGEMENTExecutive SummaryThis report will highlight the comparison between one large-scale organization and anothersmall-scale organization to identify the difference in strategic management in the organizations.The large-scale organization selected for the report is Zara and the small-scale organizationselected for the report is Le Kilt. The report will provide in-depth detail about the employingconcept, macro and microenvironment analysis, marketing strategy, organizational leadershipand culture, change management and the strategic issues. Comparative analysis will be includedto highlight the contrast between the two organizations. The report will conclude by providingrelevant policy recommendations and conclusion. Thus, it can be concluded from the report thatthere is huge difference in policies in the both the organizations. Zara is aiming at makingimprovement in their business model to hold to their competitive advantage. However, on theother hand Le Kilt is aiming to maintain their sustainability in the market by acquiring newconsumers in the market. Moreover, the supply chain management and overall processes in alarge-scale organization is polished due to the availability of more employees in the organization.
2STRATEGIC MANAGEMENTTable of ContentsIntroduction......................................................................................................................................4Strategic management and leadership of Zara.................................................................................4Background of Zara.....................................................................................................................4Vision and Mission......................................................................................................................4Long-term objectives...................................................................................................................5Situation audit..............................................................................................................................6Marketing strategy.....................................................................................................................12Organizational leadership and culture.......................................................................................15Change management..................................................................................................................16Key strategic issues....................................................................................................................16Policy recommendation.............................................................................................................17Strategic Management and leadership of Le Kilt..........................................................................18Background................................................................................................................................18Employing concept and models.................................................................................................18Situation audit............................................................................................................................19Organizational leadership and culture.......................................................................................23Change management..................................................................................................................24Key strategic issues....................................................................................................................25Policy recommendations............................................................................................................25
3STRATEGIC MANAGEMENTComparative analysis.....................................................................................................................26Conclusion.....................................................................................................................................28References......................................................................................................................................29
4STRATEGIC MANAGEMENTIntroductionThis report will highlight the comparison between one large-scale organization andanother small-scale organization to identify the difference in strategic management in theorganizations. The large-scale organization selected for the report is Zara and the small-scaleorganization selected for the report is Le Kilt. The report will provide in-depth detail about theemploying concept, macro and microenvironment analysis, marketing strategy, organizationalleadership and culture, change management and the strategic issues. Comparative analysis willbe included to highlight the contrast between the two organizations. The report will conclude byproviding relevant policy recommendations and conclusion.Strategic management and leadership of ZaraBackground of ZaraRosalia MeraandAmancio Ortega Gaonaare the founders of Zara in the year of 1975(Zara.com 2018). Zara is the major selling brand of the fashion retail named INDITEX. Zara hasexpanded its business to all parts of the world and has its presence worldwide. INDITIEX is afashion retail who owns Zara and other popular brands. The organization has expanded itsbusiness to different parts of the world, started their expansion in Portugal, and soon spread toother countries such as United States, Japan, Singapore, India, United Kingdom, China and manyother countries (Zara.com 2018). Zara cater to all type of market segments and their productschange depend upon the present trends in the market.
5STRATEGIC MANAGEMENTVision and MissionVision statement of the organisation is focused on fulfilling all the needs of wants of thecosnu7mers in the target segment. Thus, they continuous use innovation into business model toprovide better experience to the consumers and provide them with affordable designer products(Zara.com 2018).The mission statement of the organization is aiming to improve their business model tocontribute to the sustainability of the corresponding society and environment.Long-term objectivesZara has developed certain sets of objectives based on their vision and mission. The long-term objectives of the organization are as follows:Zara have been planning to develop an eco friendly store in order to save energy. Theyhave implemented a business model, which will reduce energy consumption in stores by20% by introducing efficiency and sustainability criteria.Zara is trying to reduce the wastage of resources and recycling the majority of theirmaterials. They recycle the alarms and hangers to mould them in to other plasticproducts. Thus, they are recycling millions of alarms and hangers every year, thecardboards and plastics used for packaging of their products are recycled.Zara is committed to their employees and staffs; they hold frequent awareness programsand training to improving the quality of their workforce. Thus, the staffs are able to adaptto their organizational culture and aligning their personal goals to the strategic goals ofthe organisation.They have started using organic fabrics in manufacturing of some of their products.These products have different labels so that they can be recognized.
6STRATEGIC MANAGEMENTZara have started using biodiesel as a fuel, which constitutes 5% of the overall fuel used.Therefore, Zara has been able to reduce the amount of CO2emission by 500 tons.Situation auditSituation analysis will consist of both macro and microenvironment analysis of Zara.This macro environment analysis will consist of Pestle and the microenvironment analysisconsists of Porter’s five forces. The internal analysis will consist of SWOT.MACRO ENVIRONMENT ANALYSISPESTLEPoliticalEconomicSocialThe impact of politics ishuge on the organization asZara uses verticalintegrations system, whichconsists of owning ofdifferent factories, outletsand transport system. Theyhave to be aware of politicalconditions of the countrythey are operating and thedifferent trade rules in thatparticular country. Theexport rules and regulationsare varying so being awareof the government policies.Political stability of theoperating country is anessential factor foroperating in a safeenvironment.Economy of a target market iscrucial for sustainability ofthe organization. Zara is wellaware if the economicscenario in the countries theyare operating. Thus, interestrates, exchange rates, tariffs,economic growth andinflation are important factorsthat Zara takes in to accountbefore entering a foreignmarket.The buying behaviour and therecent trends in the marketare one of the most importantfactors for gaining success inthe fashion industry. Thus,before making an entry into amarket, Zara will have toanalyze the buying behaviourof the potential consumers inthe market. Thus, identifyingthe disposable income of theconsumers in the market willbe essential, as affordabilityis a crucial factor forinfluencing buying behaviourof the consumers. Moreover,the preferences of consumersare dependent on the socialcultural background and itwill vary in each countries.Thus, identifying changes inbuying behaviour isnecessary.TechnologicalLegalEnvironmentalTechnological excellence isZara has been operating indifferent countries and thereEnvironmental rules andregulation are strict in most of
7STRATEGIC MANAGEMENTnecessary for competing inthe global market scenario.Technological advancementand use of innovation toimprove the quality of theirproducts and efficiency ofthe operational processeswill provide competitiveadvantage to theorganization. The use ofdigital marketing and onlinemedium to improve thecustomer experience is akey reason for their success.are certain legal obligationsthey have to keep in mind,even though they have tomake profits and maintain theoperating cost. Thus,understanding the legalenvironment and fulfilling allthe related obligations tomaintain their reputation inthe market. Moreover, as thebrand is well known all overthe world, keeping track oftheir legal obligations isessential for protect tin g theirreputation in the internationalmarket.the countries. Thus, creatingsustainable environment andsociety will be one of themain objectives of theorganization. Zara has startedvarious eco friendly measuresso that they can contribute asan responsible citizen.Table 1: PESTLE(Source:Ho 2014)MICRO ENVIRONMENT ANALYSISMichael Porter’s Five ForcesThe competitiveness of Zara can be identified by using this model and organizations cantake measures to make improvements in their strategy. The five factors in this model arebargaining power of the buyers, bargaining power of the suppliers, threat of substitution,entry barriers and competitive rivalry(E. Dobbs 2014).Entry barriers:Economies of scale is essential for maintaining profitability where the fixed costis high. The barriers to entry are high as includes investment of huge amount of capital in theorganization. Zara does not use promotional strategies and it takes at least 6months for them totransform a concept to the store. Moreover, availability of duplicate products in some markets iscausing a barrier to entry (Hill, Jones and Schilling 2014).
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