Critical Assessment of Process Used by Organisations to Determine Their Strategy

This article provides a critical assessment of the processes used by organizations to determine their strategy. It discusses the importance of external and internal analysis in formulating effective strategies.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Critical Assessment of process used by organisations to determine their strategy.....................1
TASK 2............................................................................................................................................3
Evaluation of critical models and tools used by organisations to determine their strategy........3
TASK 3............................................................................................................................................4
Application of the tools above to Google...................................................................................4
TASK 4............................................................................................................................................6
Critical Appraisal of the importance of the change management..............................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic Management refers to all the processes, procedures and techniques, which an
organisation adopts and implements in order to manage their strategies and attain a competitive
advantage within their respective markets (Rothaermel, 2017). It is a highly essential process
which includes implementation of several management procedures which are required by a
company in relation to ensure sustainability and high market growth. The report below is based
on how best the organisations determine their strategy. In addition to this, the report also covers
an evaluation of critical models that are used by companies to determine their strategies, along
with their application on Google, which is one of the most recognised web browsers in the world.
In context of this company, the report includes importance of change management based on
complexity of the transformation process.
TASK 1
Critical Assessment of process used by organisations to determine their strategy
In order to ensure effectiveness in performance, there are several processes which are
usually implemented by companies to form their strategies and put the same into effect
appropriately. Such processes are required to be critically implemented in order to analyse their
effectiveness towards appropriately formulating the strategy.
Hence, some of the prominent procedures in this context are analysed below:
 External Analysis:
One of the prominent procedures in order to determine the strategy is related to analysis
of external environment. This refers to evaluation of all the factors within the external business
surroundings of a company that has a prominent influence over its business decisions and
strategies (Ansoff and et. al., 2018). This process requires the company in context of analysing
factors which are associated with the political stability, economic performance, social trends,
advancements in technologies, environmental concerns as well as appropriate adherence to the
legislative requirement of the industry.
Along with this, this process is inclusive of analysis of industrial position of a company
against customers, suppliers, substitutes, new companies in the market as well as the existing
competitive organisations. All these forces have prominent impact on the organisation as well as
their decisions. Hence, this process is quite effective in formulating the strategies in relation to
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enhancing its competitive and sustainable position in the marketplace (Moutinho and Vargas-
Sanchez, 2018).
However, as effective as it may sound, there are several limitations associated with this
procedure in relation to helping the company in determining its strategy. For example, while is
very important in relation to determining the external forces and its impact on the company, it
fails to evaluate the competencies which are likely to be present within the organisation. In
addition to this, it does not take several facts into consideration, that whether exclusivity is
present within the firm's offerings, which might overpower the external forces due to its
uniqueness.
 Internal Analysis:
Another process which is and could be adopted by a company in relation to determine
their strategy is related to analysing internal competencies and weaknesses of the firm. Such
analysis is very important in relation to having an appropriate insight within the firm's
capabilities, whereas elements which require effective improvement. These processes
appropriately include several essential elements within an organisation, such as its core strengths
and weaknesses, along with several opportunities which the firm could cease, as well as threats
related to the business practices.
This type of analysis is very necessary which are required to determine as to what factors
within the company is required to be improvised to overcome the threats and effectively cease
the opportunities in the environment. Hence, in relation with determining the strategy, it is
related to the company's current functioning and how best to contribute in enhancing the same. A
positive side within the same is related to the fact that organisation gets quite effectively aware
of the current competencies and functioning of themselves. However, minimal focus is provided
by the organisation with respect to the external environment, which could be a major threat for
the company in determining its strategy that could be adopted and implemented as per the
external environment as well (Ginter, Duncan and Swayne, 2018).
Hence, it could be said from the above analysis that both internal and external analysis
are required to be appropriately adopted by an organisation, which would further give a wider
spectrum towards determining their strategy. In addition to this, while internal analysis is very
effective if the company has exclusive products to offer, external analysis could be adopted
widely by firms irrespective of the products or services offered by the organisation. With respect
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to this, organisations must adopt both these approaches in a way where its internal weaknesses
and external threats, both are minimised by their strengths and market opportunities.
TASK 2
Evaluation of critical models and tools used by organisations to determine their strategy
As analysed above, the processes used by companies are highly essential in context to
determining their strategies in a better manner. In relation to this, there are certain models which
provide support as well as guidelines to firms as to how best they could use and implement the
above processes to determine their strategy (Lasserre, 2017). These models are very much
effective when it comes to assisting a company in determining their strategy. Reason for this is
because all the elements reflected in these models helps a company in identifying their weak and
strong points, along with external and internal factors which are likely to have an impact on
operations of the organisation.
Hence, several models in terms for internal and external analysis for the firm is
mentioned below:
 PESTLE Analysis:
This framework is followed, adopted and implemented by a company to determine
several factors within the external environment of the organisation. This is necessary to
determine the position of the market, as well as preferences of customers, along with legislative
and political requirement, that could actually drive a business towards success. In addition to
this, this model could also be utilised in determining the positive, as well as negative impacts of
these factors on the organisation, which could appropriately ensure pathways through which the
organisation could gain success in the market. All the factors adopted by the organisation allows
an appropriate and critical analysis of the marketplace, which helps in shaping up the strategy
pretty well (Hitt and Duane Ireland, 2017).
However, while this model is good enough in shaping up the strategies in alignment with
the environment, it does no take in account one particular force that is required to be dealt with,
which is competition. This crucial factor is very much important to be analysed in a way which
assists a company in moulding its functioning to gain competitive advantage. Hence, this could
cause the company a little bit of disadvantage as the competitors might also implement the same
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strategy which would be adopted by the firm. This might also threaten the company in relation to
gaining sustainability in its performance in long term.
 SWOT Analysis:
This framework is utilised by companies when they have to determine their strengths and
weaknesses, along with potential threats and opportunities. It is perhaps one of the most simple
models which require limited analysis and effective overview of organisation's practices to
analyse the potential opportunities and threats related to the same. In relation to its application,
this model is applied through first determining strengths and weaknesses of the organisation and
then appropriately and effectively determine the opportunities and threats that are associated with
the external environment (Noe and et. al., 2017).
In terms of the positive sides of this model, this is perhaps one of the most universally
applicable theories for a business, regardless of its industry and sector. In addition to this, this
model could be used to determine key competencies and capabilities as well, that are required to
be analysed in formation of strategies.
In relation to its negative aspects however, there are certain limitations in perspectives
and scope of in which this is implemented. For example, a company focusing on its core abilities
and weaknesses could only formulate strategies which could satisfy the internal agendas of the
organisation. However, where other crucial factors such as industrial and change come into
question, this model becomes slightly ineffective in relation to its limited reach.
However, both the models have their own benefit and disadvantages, which are needed to
be evaluated and analysed by the company to develop a strategy which fulfils agendas of both
these models.
TASK 3
Application of the tools above to Google
With respect to the above analysis, it is required to adopt models and tools over an
organisation which helps in suggesting one of the most enhanced and adequate strategy for the
firm (Meyer, Neck and Meeks, 2017).
Moreover, out of the two models mentioned above, PESTLE is being adopted as the
model to analyse the external environment of the company and determine the impact of all the
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external factors to analyse as to what the overall position of the organisation is with respect to
the sector. Hence, application of this model with respect to Google is discussed below:
 Political Factors:
These factors are related towards the political factors related to the markets in which the
organisation operates. Google is an organisation that has a strong global presence. Hence,
conditions in each prominent market will definitely ensure impact on the company. For instance,
one prominent market of the company is in the United Kingdom. Currently, due to the likelihood
of Brexit, there is a strong political uncertainty within the country. Hence, such changes might
have a negative impact on the company and hence, is pushing the firm towards change
(Trigeorgis and Reuer, 2017).
 Economical Factors:
This factor is associated with the economic performance of markets that have the
company's presence. There is a strong global recession that has been evidently experienced by
the organisation. In addition to this, while the company has been operating in a sound manner
despite this aspect, areas like Asia and the United Kingdom are witnessing times of high inflation
and lower value of their currency. Hence, this also affects the standard of living of individuals
within the company in the market and therefore, change is required to appropriately be inherited
by the company to ensure compliance with such conditions.
 Social Factors:
These factors are related towards the current trends in the market. Customers these days
are inclined towards high speed browsing and heavy digitalisation. Moreover, academic and
professionally, internet has been a very prominent source of information. In addition to this, the
firm also deals in variety of technological products such as mobile phones. Moreover, due to
lower switching costs, customers require products that are high in quality and low in prices. This
requires the company to modify its existing strategy which would help the firm in enhancing its
market preference.
 Technological Factors:
There are several technological advancements happening all around the world, that is
required to be adopted by the company to gain a strong competitive advantage. Hence, to ensure
adaptability in such dynamic business environment, flexibility and modifications for continuous
improvement are required (Aguinis, Edwards and Bradley, 2017).
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 Legal Factors:
There are several legal frameworks that are required to be assessed and appropriately
adhered to in order to gain support of the government. In relation with the organisation, the
company is required to deal with more strict and effective regulations in relation to data security,
supply chain management in the EU nations and the UK, as well as better customer service.
Thus, the company is required to build its structure in ways which effectively assures adherence
to these requirements (Baumgartner and Rauter, 2017).
 Environmental Factors:
This factor is related towards the ongoing environmental concerns in the world. Hence,
there is a high requirement for organisations like Google in relation to how best they effective
and positive practices are performed by the organisation.
TASK 4
Critical Appraisal of the importance of the change management
In terms of the analysis above, it is required by Google to have several positive and
essential changes within the organisation that appropriately helps the company in complying
with the changing environmental conditions within the organisation. For example, the firm has
appropriately and effectively implemented several structural changes within its parent company
by the name of Alphabet (Examples of Organizational Change: A Tech Giant Showcase, 2019).
This structural change and emergence of the parent company has been quite profitable for the
company in relation to coping up with the external factors mentioned above.
However, it is required to critically appraise the importance of change management. It is
the process adopted by an organisation with respect to implementing the change within the
organisation. In terms of Google, the significance of this aspect is reflected through several
pointers explained below: Complexity: One of the most prominent aspect within the overall change management is
the complexity. This is because restructuring is one change which reflects on each and
every department and levels of an organisation. With respect to Google, it might have
definitely created heavy resistance amongst employees at first. Hence in such situations,
the future anticipated benefits are required to be communicated to the employees.
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Moreover, research and development with respect to the effectiveness and future
appropriateness is required to be analysed. Cost: It is necessary or an organisation in relation to analysing its cost in context of the
change planned in the company. With respect to the structural change, there are certainly
several things is required to be considered by a firm. For example, new technical and
human resources are required to be analysed. In addition to this, additional training costs,
along with marketing and promotional aspects would also be counted in prominent
expenses. Hence, this aspect is somewhat unfavourable in terms of such change within
the company. Risk: In terms of structural changes, there are several appropriate and effective risks
associated with the same. For example, risks are very much related to the management of
the change within an organisation. Hence, if ineffectiveness is emerged, it could cause a
complete failure of the plans of the organisation. Hence, this factor too is quite critical
with respect to the company and the change associated with it. However, to deal with the
same, risk management plans could be developed by the organisation, which would be
subjected towards dealing with risks related to the change.
 Sustainability: Every action of an organisation directed towards ensuring sustainability
within a company. However, in Google's context, the company took a step towards
change seeing the current environment conditions previously, along with analysing the
need for expansion and better sustainability. Hence, this positively reflects the need for
change management in he company, so that it could lead to a sustainable growth and
betterment in the future. (Michael, Storey and Thomas, 2017)
Thus, it is important for a firm like Google to implement change management in its
processes like the structural changes reflected above. Currently as well, the firm is required to
adapt its structures to the environmental conditions externally. Hence, with respect to risks and
costs, each better and effective strategy is associated with risks and better cost. Thus, risk
assessment and implementation of sustainable practices must be kept in mind by the organisation
in relation to enhancing the scope of improvement where change management is concerned.
CONCLUSION
Hence, it is concluded from the report above, that strategic management is very important
for an organisation in order to gain a competent position within the marketplace. Moreover, it is
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essential that processes used by companies to determine their strategies are evaluated, which
reflects the effectiveness of these strategies in relation to develop a competent strategy for the
firm. In addition, evaluation of critical models and tools used by companies assists in realising
which tool serves the company best in relation to determining their strategy. In addition to this,
appropriate and effective application of these tools to a company provides an appropriate
implementation of strategy within the organisation. Lastly, change management process must be
appraised as it is essential for an organisation to appropriately and effectively ensure competence
in dynamic business environment.
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REFERENCES
Books and Journals
Aguinis, H., Edwards, J. R. and Bradley, K. J., 2017. Improving our understanding of
moderation and mediation in strategic management research. Organizational Research
Methods. 20(4). pp.665-685.
Ansoff, H. I. And et. al., 2018. Implanting strategic management. Springer.
Baumgartner, R. J. and Rauter, R., 2017. Strategic perspectives of corporate sustainability
management to develop a sustainable organization. Journal of Cleaner Production. 140.
pp.81-92.
Ginter, P. M., Duncan, W. J. and Swayne, L. E., 2018. The strategic management of health care
organizations. John Wiley & Sons.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Meyer, G. D., Neck, H. M. and Meeks, M. D., 2017. The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Michael, S., Storey, D. and Thomas, H., 2017. Discovery and coordination in strategic
management and entrepreneurship. Strategic entrepreneurship: Creating a new mindset,
pp.45-65.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Noe, R. A. and et. al., 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Rothaermel, F. T., 2017. Strategic management. New York, NY: McGraw-Hill Education.
Trigeorgis, L. and Reuer, J. J., 2017. Real options theory in strategic management. Strategic
Management Journal. 38(1). pp.42-63.
Online
Examples of Organizational Change: A Tech Giant Showcase. 2019. [Online] Available
Through: <https://change.walkme.com/examples-of-organizational-change/>
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