Strategic Management: A2 Milk Company Analysis and New Strategic Initiative
Added on 2023-03-20
34 Pages6992 Words34 Views
FinanceLeadership Management
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Strategic Management
Running Head: Report
Contents
Summary..........................................................................................................................................2
Introduction......................................................................................................................................3
Resources and capabilities of A2 milk company (VRIO framework).............................................4
Generic strategies.............................................................................................................................9
New Strategic Initiation: Marketing Mix......................................................................................12
Product.......................................................................................................................................12
Pricing........................................................................................................................................13
Suitability of new strategic initiative.............................................................................................17
Strategic implementation plan.......................................................................................................19
Required changes.......................................................................................................................19
Implementation and management of changes............................................................................20
Action Plan.............................................................................................................................21
Measurement of a strategic initiative.............................................................................................23
Balanced Scorecard....................................................................................................................23
Strategy map..............................................................................................................................25
Conclusion.....................................................................................................................................27
References......................................................................................................................................29
1
Contents
Summary..........................................................................................................................................2
Introduction......................................................................................................................................3
Resources and capabilities of A2 milk company (VRIO framework).............................................4
Generic strategies.............................................................................................................................9
New Strategic Initiation: Marketing Mix......................................................................................12
Product.......................................................................................................................................12
Pricing........................................................................................................................................13
Suitability of new strategic initiative.............................................................................................17
Strategic implementation plan.......................................................................................................19
Required changes.......................................................................................................................19
Implementation and management of changes............................................................................20
Action Plan.............................................................................................................................21
Measurement of a strategic initiative.............................................................................................23
Balanced Scorecard....................................................................................................................23
Strategy map..............................................................................................................................25
Conclusion.....................................................................................................................................27
References......................................................................................................................................29
1
Running Head: Report
Summary
This report is compiled to analyze the strategic capability analysis of the organization named as
A2 Milk. The research also involves proposing a new strategic initiative for the organization that
helps in achieving a competitive advantage. On the basis of all the findings of this report, an
actionable strategy implementation plan is prepared and evaluated for the purpose of achieving
success. The implementation plan that prepared in the research is very realistic and achievable.
The main purpose of conducting this research is to demonstrate about the key strategic initiative
and a plan of strategic implementation that assists A2 Milk Company to achieve the sustainable
competitive advantage and evaluate the plan by following some measures such as balanced
scorecard. The report includes the identification of the resources and competencies of the
organization by using the VRIO framework. On the basis of the strategy statement and value
chain activities, the current generic type of business strategy implemented by A2 milk is also
discussed in this research project. A new strategic initiative for the organization to implement is
proposed and this initiative is a functional initiative related to the marketing of the company. The
evaluation of strategic initiative is done on the basis of the external environment of A2 company
its strategic capabilities and current business strategy. An implementation plan that going to be
developed is focusing on the need for strategic initiative and how to manage and implement the
proposed changes. At last, the main focus is given on how the proposed strategic initiative
measured by using the set of key measures and strategy map is drawn.
2
Summary
This report is compiled to analyze the strategic capability analysis of the organization named as
A2 Milk. The research also involves proposing a new strategic initiative for the organization that
helps in achieving a competitive advantage. On the basis of all the findings of this report, an
actionable strategy implementation plan is prepared and evaluated for the purpose of achieving
success. The implementation plan that prepared in the research is very realistic and achievable.
The main purpose of conducting this research is to demonstrate about the key strategic initiative
and a plan of strategic implementation that assists A2 Milk Company to achieve the sustainable
competitive advantage and evaluate the plan by following some measures such as balanced
scorecard. The report includes the identification of the resources and competencies of the
organization by using the VRIO framework. On the basis of the strategy statement and value
chain activities, the current generic type of business strategy implemented by A2 milk is also
discussed in this research project. A new strategic initiative for the organization to implement is
proposed and this initiative is a functional initiative related to the marketing of the company. The
evaluation of strategic initiative is done on the basis of the external environment of A2 company
its strategic capabilities and current business strategy. An implementation plan that going to be
developed is focusing on the need for strategic initiative and how to manage and implement the
proposed changes. At last, the main focus is given on how the proposed strategic initiative
measured by using the set of key measures and strategy map is drawn.
2
Running Head: Report
Introduction
Any organization working in the market conditions is affected by many external factors which
affect the performance of the organization. With the changes in the market conditions, the
success of the organization is dependent on the ability of the company’s resources to evaluate the
internal and external conditions and a new strategic initiative to implement that shape the future
of the organizations. The good performance or successful competitive advantage is only
achieved through the continuous improvement in the organizations. Every organization has set
objectives for the future and to achieve those objectives, the strategy is used as an action plan.
The strategic planning and the operation is a new management process that organization adopts
in time to the changes in the external environment by effectively utilizing its current capabilities
and potential.
This report is compiled to analyze the strategic capability analysis of the organization named as
A2 Milk. The research also involves proposing a new strategic initiative for the organization that
helps in achieving a competitive advantage. On the basis of all the findings of this report, an
actionable strategy implementation plan is prepared and evaluated for the purpose of achieving
success. The implementation plan that prepared in the research is very realistic and achievable.
The main purpose of conducting this research is to demonstrate about the key strategic initiative
and a plan of strategic implementation that assists A2 Milk Company to achieve the sustainable
competitive advantage and evaluate the plan by following some measures such as balanced
scorecard. The report includes the identification of the resources and competencies of the
organization by using the VRIO framework. On the basis of the strategy statement and value
chain activities, the current generic type of business strategy implemented by A2 milk is also
discussed in this research project. A new strategic initiative for the organization to implement is
3
Introduction
Any organization working in the market conditions is affected by many external factors which
affect the performance of the organization. With the changes in the market conditions, the
success of the organization is dependent on the ability of the company’s resources to evaluate the
internal and external conditions and a new strategic initiative to implement that shape the future
of the organizations. The good performance or successful competitive advantage is only
achieved through the continuous improvement in the organizations. Every organization has set
objectives for the future and to achieve those objectives, the strategy is used as an action plan.
The strategic planning and the operation is a new management process that organization adopts
in time to the changes in the external environment by effectively utilizing its current capabilities
and potential.
This report is compiled to analyze the strategic capability analysis of the organization named as
A2 Milk. The research also involves proposing a new strategic initiative for the organization that
helps in achieving a competitive advantage. On the basis of all the findings of this report, an
actionable strategy implementation plan is prepared and evaluated for the purpose of achieving
success. The implementation plan that prepared in the research is very realistic and achievable.
The main purpose of conducting this research is to demonstrate about the key strategic initiative
and a plan of strategic implementation that assists A2 Milk Company to achieve the sustainable
competitive advantage and evaluate the plan by following some measures such as balanced
scorecard. The report includes the identification of the resources and competencies of the
organization by using the VRIO framework. On the basis of the strategy statement and value
chain activities, the current generic type of business strategy implemented by A2 milk is also
discussed in this research project. A new strategic initiative for the organization to implement is
3
Running Head: Report
proposed and this initiative is a functional initiative related to the marketing of the company. The
evaluation of strategic initiative is done on the basis of the external environment of A2 company
its strategic capabilities and current business strategy. An implementation plan that going to be
developed is focusing on the need for strategic initiative and how to manage and implement the
proposed changes. At last, the main focus is given on how the proposed strategic initiative
measured by using the set of key measures and strategy map is drawn (A2 Corporation Limited,
2012).
Resources and capabilities of A2 milk company (VRIO framework)
VRIO framework is a very useful strategic tool to analyze the internal resources of the A2 Milk
Company Limited and assess whether these resources and capabilities provide a sustained
competitive advantage. This VRIO framework also analyzes whether the resources and
capabilities of A2 Milk Company can be improved to provide a greater competitive advantage.
Valuable (V)
According to the Valuable element in the VRIO framework, it is analyzed whether the resources
of A2 milk add value to organizational success or not. Some of the resources of the A2 Milk
Company are also analyzed in the context to its value for the organization which is mentioned as
below:
Financial resources: The Financial resources of the A2 Milk Company are highly
valuable as they required by the organization to invest in external opportunities. The
4
proposed and this initiative is a functional initiative related to the marketing of the company. The
evaluation of strategic initiative is done on the basis of the external environment of A2 company
its strategic capabilities and current business strategy. An implementation plan that going to be
developed is focusing on the need for strategic initiative and how to manage and implement the
proposed changes. At last, the main focus is given on how the proposed strategic initiative
measured by using the set of key measures and strategy map is drawn (A2 Corporation Limited,
2012).
Resources and capabilities of A2 milk company (VRIO framework)
VRIO framework is a very useful strategic tool to analyze the internal resources of the A2 Milk
Company Limited and assess whether these resources and capabilities provide a sustained
competitive advantage. This VRIO framework also analyzes whether the resources and
capabilities of A2 Milk Company can be improved to provide a greater competitive advantage.
Valuable (V)
According to the Valuable element in the VRIO framework, it is analyzed whether the resources
of A2 milk add value to organizational success or not. Some of the resources of the A2 Milk
Company are also analyzed in the context to its value for the organization which is mentioned as
below:
Financial resources: The Financial resources of the A2 Milk Company are highly
valuable as they required by the organization to invest in external opportunities. The
4
Running Head: Report
financial resources are must to grab the opportunities and also helps in combating the
external threats to the organization.
Local Food products: According to the VRIO framework, the local food products of the
company are highly valuable as they add value to customer satisfaction because of its
quality of differentiation. Product differentiation is playing a major role in gaining a
competitive advantage (Pesic, Milic, & Stankovic, 2012).
Employees (Human resource): Employees are always considered as valuable assets for
the organizations and they can contribute to achieving the set organizational goals and
objectives. The employees of A2 Milk Company are highly trained and skilled that helps
the organization to achieve high productivity levels. The rate of employee retention is
also high in the organization which shows that the company is much more capable of
retaining the employees for a longer period of time.
Patents: Patents are also very valuable resources for the company as they help the
organization to sell its products and services in a fair way and without any interference.
The patents also allow organizations to earn licensing revenue by giving these patents to
other manufacturers.
Distribution network: The distribution network of A2 Milk Company Limited is very
strong and considered as the valuable resource of the organization. The strong
distribution network is very essential to reach the customers quickly and improve the
customer services and ensure to achieve the high revenues for A2 Milk Company
(Jugdev, 2017).
Cost structure: it is observed from the VRIO analysis that the cost structure of A2
Company is not a valuable resource as the cost of production is much higher in
5
financial resources are must to grab the opportunities and also helps in combating the
external threats to the organization.
Local Food products: According to the VRIO framework, the local food products of the
company are highly valuable as they add value to customer satisfaction because of its
quality of differentiation. Product differentiation is playing a major role in gaining a
competitive advantage (Pesic, Milic, & Stankovic, 2012).
Employees (Human resource): Employees are always considered as valuable assets for
the organizations and they can contribute to achieving the set organizational goals and
objectives. The employees of A2 Milk Company are highly trained and skilled that helps
the organization to achieve high productivity levels. The rate of employee retention is
also high in the organization which shows that the company is much more capable of
retaining the employees for a longer period of time.
Patents: Patents are also very valuable resources for the company as they help the
organization to sell its products and services in a fair way and without any interference.
The patents also allow organizations to earn licensing revenue by giving these patents to
other manufacturers.
Distribution network: The distribution network of A2 Milk Company Limited is very
strong and considered as the valuable resource of the organization. The strong
distribution network is very essential to reach the customers quickly and improve the
customer services and ensure to achieve the high revenues for A2 Milk Company
(Jugdev, 2017).
Cost structure: it is observed from the VRIO analysis that the cost structure of A2
Company is not a valuable resource as the cost of production is much higher in
5
Running Head: Report
comparison to the competitors. There is a need to work on the cost structure as it is a
competitive disadvantage and affects the overall profitability of the company.
Research and development: The research and development at A2 Milk Company are
very costly and does not add value to the company’s competitive advantage. The cost of
research and development is much higher than the benefits provided to the company in
terms of innovation. However, the company needs to adopt some innovative ideas for
gaining competitive advantage.
Rare (R)
The resources that only acquired by one or very organizations are said to be rare and contributes
to gain competitive advantages. All the resources and capabilities of the organization are
analyzed and evaluated. Not every organization has the strong financial resources for the
investments, but A2 Milk Company has these resources which said to be rare. Moving ahead, the
local food products of the A2 Milk Company limited are not considered as rare as they are
offered to the customers by many other competitors. Talking about human resource, then having
a skilled and trained workforce is the biggest strength for the organization as it is identified that
these resources are rarely found in many organizations. Low employee turnover is a positive
point for organizations. Patent as resources considered as rare as they are not processed by the
competitors and also not easily available. In addition, it is also very rare to find strong
distribution networks in the organizations because it requires a huge amount of investment as
well as time. There are very few companies in the industry having strong distribution networks
(John Wiley & Sons, 2012).
6
comparison to the competitors. There is a need to work on the cost structure as it is a
competitive disadvantage and affects the overall profitability of the company.
Research and development: The research and development at A2 Milk Company are
very costly and does not add value to the company’s competitive advantage. The cost of
research and development is much higher than the benefits provided to the company in
terms of innovation. However, the company needs to adopt some innovative ideas for
gaining competitive advantage.
Rare (R)
The resources that only acquired by one or very organizations are said to be rare and contributes
to gain competitive advantages. All the resources and capabilities of the organization are
analyzed and evaluated. Not every organization has the strong financial resources for the
investments, but A2 Milk Company has these resources which said to be rare. Moving ahead, the
local food products of the A2 Milk Company limited are not considered as rare as they are
offered to the customers by many other competitors. Talking about human resource, then having
a skilled and trained workforce is the biggest strength for the organization as it is identified that
these resources are rarely found in many organizations. Low employee turnover is a positive
point for organizations. Patent as resources considered as rare as they are not processed by the
competitors and also not easily available. In addition, it is also very rare to find strong
distribution networks in the organizations because it requires a huge amount of investment as
well as time. There are very few companies in the industry having strong distribution networks
(John Wiley & Sons, 2012).
6
Running Head: Report
Imitable (I)
This aspect of the VRIO analysis demonstrates how difficult it is for the organization to imitate
the resources. The financial resources in the organization are costly to imitate in the organization
as these resources are acquired by A2Milk Company from the longer period of time and there is
a less threat of new entrants because high financial resources are required to set up a competitive
business. In terms of the local products, it is not difficult to imitate as competitors can easily
acquire these products by investing some amount in the research and development of the
companies (a2 Milk Company Limited, 2018). Therefore temporary competitive advantage is
provided by this resource. Also, employees are not costly to imitate as other companies can also
improve the skills of their workers by providing proper training, better compensation and career
growth opportunities. Moving further, it is not legal to imitate a patented product and it is costly
to develop the same resources and getting patent for that. Talking about the distribution
networks, then it is costly to imitate. It is observed that the competitors of A2 Milk Company
need to invest an amount to imitate a similar network of distribution.
Organization (O)
This part of the VRIO framework analyzes how the resources are organized to capture value
from them. The A2 Milk Company has clearly organized its financial resources with the intent
to capture the value as the company makes use of these resources very effectively. The company
invests its money at right time and at right place. The organization is unable to capture the value
from patents as the company lacks in using the patents to its full potential. Also, the distribution
7
Imitable (I)
This aspect of the VRIO analysis demonstrates how difficult it is for the organization to imitate
the resources. The financial resources in the organization are costly to imitate in the organization
as these resources are acquired by A2Milk Company from the longer period of time and there is
a less threat of new entrants because high financial resources are required to set up a competitive
business. In terms of the local products, it is not difficult to imitate as competitors can easily
acquire these products by investing some amount in the research and development of the
companies (a2 Milk Company Limited, 2018). Therefore temporary competitive advantage is
provided by this resource. Also, employees are not costly to imitate as other companies can also
improve the skills of their workers by providing proper training, better compensation and career
growth opportunities. Moving further, it is not legal to imitate a patented product and it is costly
to develop the same resources and getting patent for that. Talking about the distribution
networks, then it is costly to imitate. It is observed that the competitors of A2 Milk Company
need to invest an amount to imitate a similar network of distribution.
Organization (O)
This part of the VRIO framework analyzes how the resources are organized to capture value
from them. The A2 Milk Company has clearly organized its financial resources with the intent
to capture the value as the company makes use of these resources very effectively. The company
invests its money at right time and at right place. The organization is unable to capture the value
from patents as the company lacks in using the patents to its full potential. Also, the distribution
7
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