Strategic Management: Process, Tools, and Importance of Change Management

This document discusses the process of strategic management, including the definition, critical assessment of the process, evaluation of tools used, and the importance of change management in Dyson Limited. It also includes a SWOT analysis and PESTLE analysis of the company.

Strategic management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Definition of strategic management.............................................................................................1
Critical assessment of process that is used in companies for determining strategy....................1
Evaluation of critical models along with tools that are used within business enterprise for
determining their strategy............................................................................................................4
Application of tools within real organisation..............................................................................6
Critical appraisal of importance of change management on the basis of complexity in
transforming process, risks, sustainability together with costs....................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management refers to stream of decisions together with actions that results in
development of effective strategy for attaining identified corporate goals (Al Shobaki, Abu
Amuna and Abu-Naser, 2016). In other words, it is a discipline that gathers numerous tools as
well as follows a legal procedure to devise a strategy. It involves management of all resources of
enterprise for reaching great heights in competitive business scenario. For understanding about
strategic management, considered company is Dyson Limited which is a UK based technology
entity that was founded by Sir James Dyson in the year 1991. The venture is specialised in
designing and manufacturing household appliances including air purifiers, hair dryers, bladeless
fans and many more.
The assessment addresses strategic management, process to determine a strategy, critical
evaluation of tools that are preferred in determining a strategy and application of all in real
company. It also appraises importance of change management on the basis of challenges in
transformation process and its cost, risks as well as sustainability.
MAIN BODY
Definition of strategic management
According to Barca (2017), strategic management can be termed as a discipline that
includes formulation addition to execution of major initiatives that are undertaken by top
managers of enterprise. It provides an overall guidance to involved parties in company, specify
objectives, devises plan so to attain all objectives by organising all resources for execution of
programmes. In Dyson Limited, strategic management is all about totality of strategic planning
addition to strategic thinking. It is about determining and describing strategies which
management carry out for attaining better performances, efficiency and competitive benefits. It is
a bundle of decisions as well as acts that is implied by a business administer to enhance
performances. For making wiser decisions making procedures, it is provital that all the strategies
should be placed for supporting all functions and activities. In this aspects, strategic management
entails evaluating goals, vision together with future plans. The discipline is considered as an art
together with science to develop, implement addition to evaluate cross functional decisions
which assist in accomplishing set objectives within bounded time.
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Critical assessment of process that is used in companies for determining strategy
In an organisation, strategic planning provides a place for recording organisational
mission, vision, objectives, purpose, values and action plan to reach towards all (Barney, 2020).
In relevance to Dyson Limited, following steps are taken into consideration for determine
meaningful strategy to stay ahead in game:
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Figure 1: Strategic planning process. 2020
(Source: Strategic planning process. 2020)
Determining position: It is first stage of strategic planning process in which the company
determines future position to attain and ways to reach there. In this stage, managers of Dyson
Limited identify issues which are required to be addressed in coming couple of years. At same
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time, managers identify opportunities addition to threats by gathering relevant insights about
market and industry (Bodrunov and Plotnikov, 2019).
Developing strategy: Once current positions are determined, the next stage is of
developing a strategy. In this, managers of venture set mission, vision, values, competitive
advantage and long-term objectives. In case with Dyson Limited, SMART objectives are useful
to determine a timeline along with resources for attaining objectives by setting a fruitful strategy.
Building action plan: The phase is about building an action plan to reach the goals in
successful aspects. In this stage, organisation determines tactics that are essential for
accomplishing objectives as well as designating a timeline with clear communication of authority
with responsibility (Brovko and Petruk, 2017). For this, managers of Dyson Limited uses
strategic mapping for visualising and devising entire plan. It works in top-down aspect to make
building action plan simple and recognising gaps for further improvements.
Managing project: Once the plan is built then next is to execute and manage it. For this,
it is essential to communicate the action plan with involved parties through exchanging relevant
information and documentation. In case with Dyson Limited, the managers turns out broader
strategy into concrete plan via mapping the process. At same time, they uses KPI dashboards fpr
clearly communicating team responsibilities for the project.
The strategic elements of Dyson Limited are as follows:
Particulars Description
Strategic components Data
About the company Dyson Limited is a technology company that is set at London, UK
since 1991 to design and manufacture multiple household appliances
Organisational purpose Purpose of Dyson Limited is to encourage a new generation of
engineers and selling high quality of household appliances.
Customers The customers of Dyson Limited at population between age of 20 to
60 years old that uses numerous kinds of household appliances.
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Competitive Edge Exclusive designs and manufacturing, specialised manpower, quality
of offerings and powerful brand loyalty.
Future description The future purpose of the entity is to become leading technology
entity in industry of electronics.
Values The values of Dyson Limited includes creativity in designs, clear
communication, ensuring high quality and motivated staff.
Evaluation of critical models along with tools that are used within business enterprise for
determining their strategy
Strategic planning tools are frameworks that are used in managers for determining where
the business is proceeding during next couple of years as well as beyond addition to the ways to
reach there (David and David, 2016). In association to Dyson Limited, critical evaluation of
models and tools for determining a strategy are as follows:
SWOT Analysis: A strategic planning tool which aid business administrators to determine
intrinsic strengths and weaknesses with extrinsic threats and opportunities is delineated as
SWOT Analysis. In an organisation, the tool is used to assess existing position prior to deciding
any new strategy. Moreover, by using the tool, a person or venture makes most of what they have
got to best advantage. It includes strengths, weaknesses, threats and opportunities that are
defined below:
 Strengths: It involved that aspects of company that are done well and in a manner which
distinguishes it from rivals. Strengths highlights what a business excels at as well as what
separates it from others (Deephouse, Gardberg and Newburry, 2019).
 Weaknesses: It is an inherent feature of company that needs more emphasis on people,
systems, procedures together with resources. It stops an entity from performing at
optimum level.
 Opportunities: These are favourable external elements which can provide a company
various competitive edge. It is a favourable combination of situations.
 Threats: Threat refers to those elements that have ability to impact negatively or harm a
venture. These are external variables that affect business adversely (Hitt, Ireland and
Hoskisson, 2016).
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Pros and Cons of the tool: Use of SWOT Analysis leads to various advantage and
disadvantage to a company. The advantages include supporting number of objectives, neutrality
in application, integrates data easily and simple to apply. In contrary, disadvantage related to the
tool includes no mechanisms for ranking importance of individual factor with other one in the
list and is subjective analysis.
PESTLE Analysis: A model which helps in analysing key elements or factors impacting
venture from outside is PESTLE Analysis. It provides individual experts insights into macro
environmental factors influencing the company. The list of factors are as follows:
 Political: It is about how along with to what degree a political system intervenes within
certain industry. All influences associated to government including corruption, instable or
stable political system, international trade regulations, restrictions on trade and hence
forth are political factors (Michael, Storey and Thomas, 2017).
 Economic: The determinants of particular performance of economy are economic factors.
These have direct and indirect impacts of venture. Factors like inflation rates, disposable
consumer income, unemployment level, economic growth and business cycle are part of
economic factors.
 Social: Elements of the universal environment represents customs, characteristics, beliefs,
attitudes, values and choices of people in which an entity works are social factors. These
are very significant for marketers while targeting particular customer base.
 Technology: It pertains to technological innovations which have high possibilities to
affect tasks of sector and company favourably and unfavourably. It comprises
automation, technological change, technology incentives, awareness for technology and
R&D activities which a market posses (Nanda and Rhodes-Kropf, 2017).
 Legal: It covers certain specific legislations, governance and regulations that are
mandatory to be adhered by organisational managers to perform transactions ethically
and successfully.
 Environmental: The factor have come into forehand in last recent years. Environmental
factors comprises aspects of ecology including climatic change, weather, environmental
offsets and so on that hampers business.
Pros and cons of the model: As with the model, there are advantages and disadvantages to
use them for planning strategy. Advantages of PESTLE analysis is that the model provides easy
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to use framework to analysis external factors, encourages development of critical or strategic
thinking and involves cross functional expertise. However, disadvantage of using PESTEL
analysis is that it forms assumption that makes decision making subjective and restrict
involvements because of time along with cost considerations (Ocvirk, Ocvirk and Berg, 2018).
Application of tools within real organisation
The application of above evaluated tools and models within Dyson Limited are as follows:
SWOT Analysis: SWOT Analysis of Dyson Limited is underneath:
Strengths:
 Dyson Limited manufactures unique
designs of various household
appliances.
 The company have huge employee size
which contributes widely in business
success.
Weaknesses:
 The price structure of Dyson limited
products is generally high due to which
it losses its customer base.
 The venture have less penetration in
various segments or areas of globe that
restricts availability of its products
(Roberts and Menker, 2017).
Opportunities:
 Dyson Limited have opportunity to
expand manufacturing units as well as
sales across the world by tapping into
untapped areas.
 The organisation can add new features
in existing products and reduce its price
structure to some extent for riching
customer experience.
Threats:
 Dyson Limited faces threat of market
fluctuations within housing market of
UK and other nations.
 There are various brands which offers
similar products at relative low prices
which is considered as a serious threat
for the enterprise.
PESTLE Analysis: PESTLE Analysis of Dyson Limited is below:
Political: It is analysed that across UK, the political factors are stable that favour home
companies. In context to Dyson Limited, political factors are in favour as all the decisions
implemented by the system are suitable and easy to adhere. However, recently, government is
predicted to undergo certain unstable situations that expectedly impacts performance and
efficiency of the venture.
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Economic: In UK, economic environment is highly developed that reflects growth and
expansion of Dyson Limited. For instance, high growth rate provides huge opportunities for
increasing sales. In contrary, high inflation rate in economy of UK reduces purchasing powers of
customers that directly decreases sales volume of Dyson Limited.
Social: In present era of UK, customers or population of society is much aware about
their requirement so is necessary for companies like Dyson Limited to meet demands of target
audience in context to product quality and services. However, preferences of customers changes
rapidly that impacts adversely on products of Dyson Limited as necessary modifications are
required to be done in all.
Technological: UK is a nation about innovation in technology and provides solution for
issues of customers (Stoyanova, 2018). In case with Dyson Limited, it is necessary to keep
adapting updated technological trends for remaining ahead among competitors. However,
adoption of technological devices requires huge investment that reduces reserves of the company
and impacts on strategic position in terms of gross income.
Legal: Within UK, there are multiple kinds of laws including employment law, health
and safety at workplace, THE Care act, data protection act and many more which are necessary
to be adhered by all institutions. As Dyson Limited operates globally, it have to comply with all
types of governance and regulations for selling products and performing ethically.
Environmental: In UK, citizens and government are area about eh environment and in this
aspect, necessary initiative are undertaken to protect the environment from carbon emission,
pollution and so on (Witcher, 2019). Dyson Limited provides products which includes cleaning
and promoted information related to its products as well as invest heavily in ecological project
that impacts positively in driving sales and playing their roles to save environment.
Critical appraisal of importance of change management on the basis of complexity in
transforming process, risks, sustainability together with costs
Change management is described as a systematic approach for managing people involved in
change for attaining desired business results. It incorporates tools of company which are used for
assisting human resources to make transitions successfully that leads to adoption together with
realisation of any change (Roberts and Menker, 2017). In case with Dyson Limited, it is
established for accomplishing particular long-term goals. However, there are various cyclical
feature of external business environment that creates complexities in maintaining initial strategic
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positions. When some changes occur in Dyson Limited, then in this context, employees resist to
accept them. For this reason, change management practices and policies are adhered by
administrators for managing and leading changes systematically. However, performing such
working is not an easy task. The importance of change management within Dyson Limited in
relevance to the factors are as appraised:
Transformation process and Cost: Transformation is key for survival of business. At same
time, costs can lead to failures in making revenues. In this factor, change management is
significant as it ensures smooth flow of operations by making relevant changes. For example, to
achieve long term objectives in Dyson Limited, various transformation are made in working and
organisational structure that is possible only because of effective change management. However,
in some cases, change management do not succeed then it adds huge costs to business (David
and David, 2016). All projects need particular budget and it is seen as a major constraint in
revenue generation of entity. Moreover, incompetent manpower fails to make productive
decisions which enhances costs or adds huge charges to financial accounts of a venture. In this,
change management is significant to control additional expenses and resolving over budgeting
related complexities.
Risks and Sustainability: In all business concerns, various risks are associated in practices
because of dynamic and uncertain business environment. Similarly, it is essential to sustain
competitive positions by making certain changes in practices or strategies and managing the
changes for minimising risks related factors (Barney, 2020). In relevance to Dyson Limited,
change management is important for decreasing risky elements such as reputational risk,
resource shortage, degradation of ethics of staff, poor competence to managers to devise
effective programs and policies, etc. Change management practice assist administrators of the
firm to take relevant actions for retaining customers and influencing employees to work as per
changes in practices so to sustain in dynamic scenario and reducing associated risks properly.
CONCLUSION
From the assessment, it has been concluded that the concept or idea of strategic management
discharges board responsibilities, provides effective decision making framework, enable
measurement of growth or progress, provides organisational perspectives and supports
understanding. Strategic formulation process prevents organisations from devising aimless
objectives. Key models and tools for determining a strategy are PESTLE analysis addition to
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SWOT analysis. Change management plays important function in an entity on the basis of
factors like transformation process, sustainability, costs along with risks.
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REFERENCES
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Al Shobaki, M. J., Abu Amuna, Y. M. and Abu-Naser, S. S., 2016. The impact of top
management support for strategic planning on crisis management: Case study on
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management theory. Academy of Management Discoveries. 6(1). pp.5-7.
Bodrunov, S. and Plotnikov, V. A., 2019. Strategic aspects of national socio-economic
development. In International Business Information Management Association
(IBIMA) (pp. 4916-4922).
Brovko, P. M. and Petruk, G. V., 2017. Strategic management of development of the military-
industrial complex enterprises with the use of dual technologies under the resource-
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concepts and cases. Florence: Pearson–Prentice Hall.
Deephouse, D., Gardberg, N. and Newburry, W. eds., 2019. Global aspects of reputation and
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Hitt, M. A., Ireland, R. D. and Hoskisson, R. E., 2016. Strategic management: Concepts and
cases: Competitiveness and globalization. Cengage Learning.
Michael, S., Storey, D. and Thomas, H., 2017. Discovery and coordination in strategic
management and entrepreneurship. Strategic entrepreneurship: Creating a new mindset,
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Nanda, R. and Rhodes-Kropf, M., 2017. Innovation Policies☆', Entrepreneurship, Innovation,
and Platforms (Advances in Strategic Management, Volume 37) (pp. 37-80). Emerald
Publishing Limited.
Ocvirk, G., Ocvirk and Berg, 2018. Strategic Management of Market Niches. Springer Gabler.
Roberts, N. C. and Menker, J. M., 2017. Strategic management in the federal government:
necessary and sufficient elements.
Stoyanova, V., 2018. An Analysis of David J. Teece's Dynamic Capabilites and Strategic
Management: Organizing for Innovation and Growth. Taylor & Francis.
Witcher, B. J., 2019. Absolute Essentials of Strategic Management. Routledge.
Online
Stages of strategic planning process. 2020. [Online]. Available through:
https://www.lucidchart.com/blog/5-steps-of-the-strategic-planning-process
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