(PDF) Strategic Management Process

Strategic
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
2. Mission, Vision and Objectives..........................................................................................3
2. Environmental analysis .....................................................................................................4
3. Capability analysis............................................................................................................10
4.Proposed Strategy..............................................................................................................18
5.Strategy Evaluation.............................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................5
.........................................................................................................................................................8

INTRODUCTION
Strategic Management refers to process of planning, monitoring and analysing activities
of a company which is required to attain goals and objectives (Ahlemann and et.al., 2012). This
report is based on IJM Plantation, Berhad which is a public trading company. Its headquarter is
situated in Malaysia and IJM Corporation is its parent organisation. Along with this, respective
company was founded in 1983 as well as there are subsidiaries companies which are working
under IJM Plantation such as Dynasive Enterprise Sdn. Bhd, Laserline Sdn. Bhd and many more.
This report explains about mission, vision and objective of respective organisation. Along with
this, analysis of macro environment with the help of PESTEL analysis. Therefore, capability
analysis, industry examination and so on assist in formulation of effective strategic plan. In
addition to this, respective company has also conducted resource audit as well as value chain
analysis which will help them to prepare their VRIO Model. Along with this, SAF analysis was
conducted on the basis of issues that was determined by TOWS model. This will aid organisation
that the strategy that they have chosen was suitable, acceptable as well as feasible.
Strategic Challenge:
According to the article published by Arthur Neslen (2018), EU institutions is defying by
UK in order to push hike of palm oil imports which have been linked to deforestation, leaked
document show (UK defies EU over Indonesian palm oil trade, leaked papers show, 2019).
European parliament has ban EU biofuels with the use of palm oil which incurred loss of 150000
orangutans in Indonesia since 2002.
2. Mission, Vision and Objectives
IJM Plantation Berhad along with its subsidiaries direct as an upstream agribusiness firm
in Indonesia as well as Malaysia. This company is indulging in process of cultivating of oil
palms, processing of fruit brunches into crude palm oil any many more. Mission, vision as well
as objectives of respective company is described below:
Mission
To maintain highest standards of performance in plantation and agribusiness
Vision
To be a leading regional plantation group
(Annual Report For The Financial Year Ended 31 March 2018, 2019)

Evaluation of Statements:
Mission as well as vision statements of an organisation is necessary to clarity to the
stakeholders. Analysis of the mission is based on criteria of clarity, focus and motivation. It is
explained as follows:
Clarity Mission of respective organisation is specific and clear which means in
order to maintain performance standard of plantation as well as agribusiness.
Focus Mission of IJM plantation is to concentrate on its core business in plantation
sector as well as agribusiness with vision to become the leading regional
plantation group. The main motive of this two statement is to enhance
market position and aware people about business and its product and
services.
Motivation Vision as well as mission statement are market oriented as it does not consist
any benefit of staff. As the mission statement describes about delivering
customers value of organisation. The vision statement states about inspiring
and motivating workers in order to accomplish goals and objectives of
company.
2. Environmental analysis
Macro trend analysis
Macro trend refers to external environment such as political, economic, social and other
factors which affect the functioning as well as operations of an organisation. In context of IJM
Plantation Berhad company in Malaysia are affected by these macro factors:
PESTEL Description
Political  These political changes have a great impact on the industries in
Malaysia. Though this country is free form corruption but has high
taxes and subsidies of government.
 But to operate business in Malaysia is effective. Industries like
plantation can operate their business effectively.

Economic  It means change in interest rates, exchange rate and many more.
Economic factor is favourable in Malaysia (Austin and Pinkleton,
2015). It is because this country provides economic opportunities and
is very popular location for international trade.
 Along with this, business operating in this country can easily perform
their transaction across the world. Therefore, economic factor for
plantation industry is favourable.
Illustration 1: Malaysia Corruption Index
(Source: Malaysia Corruption Index, 2019)

Illustration 2: Malaysia GDP Annual Growth Rate
(Source:Malaysia GDP Annual Growth Rate, 2019)

Social  Malaysia has a multi-cultural society and support immoderate of their
religion (Cartwright and Cooper, 2012).
 In this country, business must operate their business in ethical manner
and also take care of the needs as well as preferences of their societies,
communities and many more.
Technological  Malaysia has high speed of Internet as well as individuals used eco-
friendly vehicle as their source of transportation.
 Communication in Malaysia is defined by extreme form of politeness
as well as negotiation.
Environmental  Malaysia environment is deeply influenced by deforestation as well as
pollution. The country has effective policies for rainforest protection.
 Plantation industry, can effectively operate their business because
having facilities such as deforestation, rainforest protection, it will
bring a growth and development in the organisation.
Illustration 3: Malaysia Population
(Source:Malaysia Population, 2019)

Legal  Malaysia has several legal laws that every business operating in this
country has to follow it so that they can run their business in effective
and legal manner. Laws in Malaysia is based on British law
developments (Bang and et.al., 2012).
 Along with this, every organisation must have two directors as well as
it need to be a registered firm. These legal laws must be followed as
well as adopted Plantation industry in order to perform their day to
day operation as well as functions in effective and legal manner.
PESTEL Analysis Summary:
PESTEL Overall rating Opportunity/threat
Political
 Free from corruption
 Ease of doing business
Favourable Opportunity
Economic
 Change in rates
Favourable Opportunity
Illustration 4: Malaysia Average Temperature
(Source: Malaysia Average Temperature, 2019)

 Economic plans
Social
 Urbanization
 Business ethics
Favourable Opportunity
Technological
 High speed of internet
 Eco friendly vehicles
Favourable Opportunity
Environmental
 Pollution Unfavourable Threat
Legal
 Two directors Moderate Opportunity
Industry Issues (Porters Five Force Model)
These factors are described below in terms of IJM Plantation company:
Porters five forces Description
Bargaining power of Suppliers-High Plantation industry has a high impact of
supplier on their cost as well as production
(Conley, Bican and Ernst, 2013). Due to this,
companies operating in plantation industry
such as IJM plantation have to incur high cost
on their products. In addition to this, it also
have a great impact on profits of plantation
organisation.
Bargaining power of Customers-High: Plantation industry has high influence of
customers on their products. It is because there
are times when customer buy product in bulk
for which they pay low price to the company.
For example IJM plantation company have to
lower the price of their product so that they

able to gain sustainable profits.
Threats of new entrants-Low: Industry of plantation have less threat of new
entrants because they become barrier for the
new entrants. Plantation industry such as IJM
Plantation are not affected by current players
and they are able to maintain their profits as
well as chain of customers.
Threat of substitutes-Low: Plantation industry have less number of
substitutes which does not create barriers for
them. For instance, IJM Plantation company
does not have substitutes which provides them
opportunities to create strong customer base as
well as also fluctuate the price of product.
Competitive rivalry-High: Industry that belongs to plantation have large
number of competitors which affect their
operation as well as functions (DeWaal, 2013).
Plantation industry such as IJM Plantation
company have strong competitors which
influence their sales as well as profits.
Summary of Industry Analysis:
Porters Five Force Level of force Industry attractiveness
Bargaining power of Suppliers High Unattractive
Bargaining power of
Customers
High Unattractive
Threats of new entrants Low Attractive
Threat of substitutes Low Attractive
Competitive rivalry High Unattractive

3. Capability analysis
Value chain analysis:
Value chain activities Activities Value? Competitive
Advantage?
Primary activities
Inbound Logistics Plantation industry have
strong supply chain so that
they can supply their product
in different countries as per
the need and preferences of
the customers.
Strong customer base, increase
in profitability ratio.
Operations Plantation industry use quality
fertilizing seeds which aid
them to produce organic as
For better quality crop. Build
customer trust
Illustration 5: Value Chain Analysis
(Source: Value Chain Analysis, 2019)

well as eco-friendly products.
Outbound Logistics IJM plantation supply their
products and services in
different countries
Build strong chain of customers
and fresh good quality plants as
well as crops.
Marketing and Sales IJM Plantation company does
not make use of advance
technology due to which they
are not able to improve their
quality of their goods and
services (Ethiraj, Gambardella
and Helfat, 2016).
Better quality Products. Strong
brand image
Service IJM plantation provide quality
products as well as centre for
training and research.
Satisfy needs and preferences
of customers.
Support activities
Firm Infrastructure This company deals in the
production of plantation and
serve their products and
services at international level.
For smooth functioning of cash
flow as well as it also provide
support of rich resources.
HR Management HR management of Plantation
industry hire skilled and
talented employees as per the
need of company.
Experienced as well as skilled
employees to operate activities
which will aid in the growth of
an organisation
Technology Development Due to lace in use of advance
technology, respective firm is
not able to produce of
effective quality of products.
Provide quality as well as cost
effective products.
Procurement This company provides goods
and services at affordable
Better management of cost.

price to their customers.
Resource Audit
Resources Competences
Building/Plant By making effective use of plant, respective firm will be ale to grow
healthy and fresh crops (Dzhandzhugazova and et.al., 2015).
Skilled workers IJM Plantation must hire skilled and talented staff so that they can
contribute their efforts in order to achieve goals and objectives of
organisation.
Financial
resources
Respective company must have effective resources so that they can
perform their activities in proper as well as effective manner.
VRIO Model:
It is define as tool which examine organisation internal capabilities as well as resources in order
to identify if these resources can be retained for competitive advantage (Evans, 2015).
Respective company has prepared their VRIO model which is explained below:
Value chain
activities
Valuable Imitable Rarity Organised
Primary activities
Inbound
Logistics
Yes Yes Yes Yes
Operations No Yes Yes Yes
Outbound
Logistics
Yes No No No
Marketing and
Sales
Yes No Yes No
Service Yes No Yes No
Secondary activities

Firm
Infrastructure
Yes No Yes Yes
HR
Management
Yes - Yes Yes
Technology
Development
Yes - Yes Yes
Procurement Yes - - Yes
VRIO
It is valuable? Imitable?
Inbound Logistics is valuable for respective
company because through it they able to
supply their products to other countries in
specific time duration (Godoy, Sabloff and
Naidich, 2012).
Operations is one of the valuable asset for
respective company as with fertilizing seeds,
firm is able produce organic as well as good
quality of commodities.
Outbound logistics is valuable as it helps in
storing and transporting of goods and services
to potential customers.
Marketing and sales is valuable for IJM
Plantation company because with the help of
advance technology, organisation is able to
produce quality products as per their customer
Inbound Logistics is not imitable because
competitors of respective organisation can
easily get it copied.
Operations is imitable because respective
organisation get supply of these seeds from
other countries where these seeds are premium
and have better quality from other seeds. Along
with this, they become first mover advantage
and produce effective profits from products as
well services.
Outbound Logistics is also imitable as
outbound logistics, which is adopted by
respective company, is also adopted by some
other companies.
Marketing and sales is not imitable as other
organisation can easily adopt strategies for

preferences. This will help them to increase
their sales as well as profits.
Services are valuable because through this
they are able to serve their customers in
effective manner.
Firm's infrastructure is valuable because it is
a resource through which it will able to attract
customers at its store.
HR management is valuable as this
department is responsible for managing
activities of respective company.
Technology development is valuable through
this respective company is able to modify its
products and services.
Procurement is valuable because through this
respective company is able to keeps their
seeds, crops fresh.
their products.
Service is not imitable can be easily applied by
other companies in order to serve their
consumers.
Firm's Infrastructure is not imitable because
by observing the infrastructure its competitors
can adopt in their store so that it will be easy
for them to acquire customers of their
competitors.
HR Management is not imitable because there
are higher chances of acquiring HR from its
competitors by providing them better benefits
as well as compensation.
Technology development is not imitable
because technology development can easily be
copied other companies.
Procurement is not imitable because process
of procurement of products can easily be
adopted by other rivals.
Is it rare? Organised?
Inbound logistics is not rare because it is
available to rivals of IJM Plantation company.
Operations is rare because, IJM Plantation
company use such seeds which make their
product different from others. In addition to
this, goods produce from such seeds gives
tough competition to their competitors.
Outbound Logistics is not rare because the
procedure which is required by respective
company can easily be adopted by its
Inbound Logistics is not organised because it
is every business can take effective advantage
of it.
Operations is not organised as it is easily
available to every business and they can take
effective benefit of it.
Outbound Logistics is not organised because
it is not adopting different strategy for its
storage and transportation of its goods and
services.

competitors.
Marketing and Sales is rare because
respective company use such technologies that
are not easily available to other organisation.
Along with this, using rare technologies make
respective company leading organisation of
Malaysia.
Service is rare because services are that
resource that every company modify as per the
dynamic environment.
Firm's Infrastructure is rare because
infrastructure of IJM plantation cannot be
easily adopted by its competitors because it
keeps on modifying as per the dynamic
environment.
HR Management is rare because IJM
Plantation recruit their HR at international
level so that they can perform their activities in
better manner.
Technology development is rare because IJM
Plantation purchase their technologies from
other countries which is not easily adopted by
its competitors.
Procurement is rare because IJM Plantation
changes their procedure of procurement
frequently.
Marketing and Sales is not organised as it is
easily available to every business and they can
take effective benefit of it.
Service is not organised because it can be
adopted by other companies for their growth
and development.
Firm's Infrastructure is not organised
because it can be adopted by other companies.
HR Management is organised because it not
possible for every other companies to invest in
their HR and provide them effective training
and development.
Technology development is organised because
it not possible for every other companies to
invest high cost for their development of
technologies.
Procurement is organised because it is not
possible for every other company to invest high
price for their process of procurement.

Benchmarking:
From the above bar graph, it is examined that respective organisation is one of the largest
corporation in Malaysia with 11.1 billion of market capitalization. Along with this, it can also be
analysed that its shareholders earning as well as operating revenues are fluctuating in every year.
4.Proposed Strategy
SWOT analysis:
Strength Weakness
 First mover advantage: It is beneficial
for company to take first moving
advantage in this competitive market
place where there is much and more
competition (Kramar, 2014). The new
 High costs: In IJM Plantation,
replacement of existing employees with
great experience cause many difficulties
and it increases cost. Due to decrement
in dealer network. IJM Plantation has to
Illustration 6: Here Are 8 Things You Must Know About IJM Corporation Bhd
(Source: Here Are 8 Things You Must Know About IJM Corporation Bhd, 2019)

products of IJM Plantation assist top
increase market share of this company
in Crop industry.
 Brand recognition: IJM Plantation
products has created a strong brand
image in market of crops (Phaal and
et.al., 2012). It earns high premium and
profits comparing to their competitors.
In this brand image and brand
recognition plays a vital role.
build new robust supply chain network
which will cost high.
 Market share loss: With increment in
revenues the market share of IJM
Plantation are declining. For growth in
future the firm has to take some serious
steps regarding new trends.
Opportunities Threat
 Online services: With change
customers preferences and development
where they are shifting to online
services, its an opportunity for IJM
Plantation to gain higher profits
through providing online services
 Government rules: For other
companies it is harmful to regulate
business during change in government
rules. But its an opportunity for IJM to
increase its customers.
 Competitors: As reduction in new
product cycle, IJM Plantation came into
threat of their competitors. It puts
pressure on IJM but they can't respond
on needs of niche markets (Priem and
Swink, 2012).
 Unskilled human resources: Due to
lack of innovations and higher
dependency on others, IJM Plantation
can suffer from shortage of skilled
employees.
TOWS analysis:
TOWS Matrix Internal Strength
 IJM plantation is highly
innovative company which
adopt new technology and
come up with new ideas.
 The respective company
Internal Weaknesses
 Existing employees are
experienced but not
creative and innovative.
 Respective company use
old or traditional method

staffs are also very
experienced.
 Respective company have
strong brand image.
of conducting operations
and functions.
External Opportunities
 Expand their
business in order
to grow business
operation.
 Attract customers
by offer creative
products and
services.
 IJM plantation
can also
introduce as well
as adopt Online
services and
advance
technology.
 Hire new and
creative
employees.
 By taking first steps
towards innovation, it can
create many chances for
IJM Plantation to grow
and increase their market
share. Creativity in
products and services can
open doors for many
opportunities.
 IJM Plantation already has
strong brand recognition, it
have chances that if IJM
start online services it will
prove successful. Brand
image is reason
government regulations
doesn't affect IJM
Plantation and can leads
towards profit
maximisation.
 Replacement of old and
existing employees from
fresh and innovative ones
will be helpful in
recovering from high
costs. Their new ideas
and creativity results in
increment of production
and reduction of cost
(Reid, 2012).
 New trends and
techniques like online
services, reduction in
competitors growth,
advance techniques etc.
helps IJM Plantation to
regain their market share
and high demand in share
market.
External Threat
 Enhanced
competition
 Employees
Retention
 High cost of
 For reducing issues of
competition at marketplace
IJM Plantation takes many
first moving steps such
new products launch,
trending services, up-to-
 High cost can be reduced
in IJM Plantation with
reduction in replacement
of existing employees and
promotion of new talent
in appropriate manner.

production.
 Loss of market
shares due to
untrained
employees.
date techniques and
innovative ideas and
processes. (Ruff, 2015).
 IJM Plantation's
recognition play as trump
card in market it can
reduce threat related to
unskilled human resources
and it will proved as
strength.
 There should be
increment in skilled
human resources and
providing proper training
to them it can result in
new trend and
creativeness in IJM
Plantation which reduce
market share losses
(Tassabehji and
Isherwood, 2014).

Issues
While conducting analysis of TOWS, the management of IJM Plantation identify major
two issues which they need to resolve in order to attain market competitive advancement
(Ungson and Wong, 2014). For which they can adopt several model or method. Major two issues
identify by respective company manager and model used by them in order to overcome it are
mentioned below:-
 Issue 1: Implementation of new technology and trends in order to gain high competitive
advancement.
 Issue 2: Launch new product and service which attract potential service users.
In respect of these issues management of IJM Plantation adopt Ansoff Matrix which help
them in overcoming problems in effective manner, explanation of this matrix is given below:-
Porters genreic model:
Proposed strategy Following operational efficiencies in order to
decrease the cost of production through
innovation as well as business operation
practices.
Strategy Model Cost leadership
Analysis Cost leadership is define as a process in which
company produces a product in order to take
advantage of economies of scale. This strategy
is adopted by respective company so that it can
enhance their sales as well as profit by
providing quality goods and services to their
customers.
Benefit  Enhances profit and sales
 Helps in making strong brand image.
Proposed strategy In order to make products different and unique
from competitors so that it can lead to

increased sales and profits.
Strategy Model Differentiation
Analysis By adopting differentiation strategy. IJM
plantation company will able to produce
different products by adding extra value as well
as features in it.
Benefit  Helps in gaining competitive
advantage.
 It also result in increased sales as well
as profits.
Ansoffs Model
Proposed strategy To introduce existing products in new market
segment.
Strategy Model Market development
Analysis By adopting market development strategy,
respective firm will be to acquire customers
and aware them about their products and
services.
Benefit  Build customer base.
 Create brand awareness.
Proposed strategy To introduce new products in new marketplace
for product growth and development.
Strategy Model Diversification
Analysis In order to sustain products at competitive
marketplace, respective company must launch
their product in new market segment. This will

help them to make their brand image stronger.
Benefit  Enhance position at marketplace.
 Help in building brand loyalty.
5.Strategy Evaluation
Strategic evaluation is define as a process of gathering data about the progress of strategic
plan formulated by a company. Along with this, evaluation also determine about effectiveness of
strategy that is framed in order to achieve goals and objective of an organisation. The IJM
Plantation conduct SAF analysis in order to identify effectiveness of strategies which they
develop to solve issues. Evaluation of which is given below:-
 Suitability: This strategy is adopted by a company in order to determine that strategy
which they develop is appropriate for resolving issues or not. IJM Plantation analysis that
in order to resolve issues they can adopt product development and diversification
strategies. This is suitable for issues because through it respective company able to
develop new range of products by adopt new technology and trends which help them in
gaining high competitive advancement.
 Acceptability: At this stage an organisation management analysis that how effective they
are in order to accept particular strategies in order to overcome issues. In respect of IJM
Plantation they have various resources such as skilled and experienced employees,
effective research and development department, funds and so on. Through these
resources they can adopt products development as well as diversification strategies in
order to resolve issues effectively.
 Feasibility: It is stage or strategies which is adopted by a company in order to determine
how effective and feasible their strategies that it will provide them positive impact. In
respect of respective company they are facing several issues for which they can adopt
product develop as well as diversification strategies. This is so because through it they
able to develop new products according to current trends and technology which leads to
increase in customers base along with high profitability.
By conduct SAF analysis IJM plantation able to determine that their strategies for overcoming
issues is effective and appropriate. This will also help them in attaining effective competitive
advancement by attracting huge customers base.

CONCLUSION
Therefore, from the above report it can be concluded that if an organisation expand their
business in international country, then they have to determine the external environment with the
help of PESTEL analysis. This will help them if country selected is beneficial for them or not as
well as with the aid of porters five force model they will able to determine their market position.
Along with this, with assistance of resource audit and value chain analysis, company formulate
which activity is valuable, rare, imitable as well as organised for the company. On the basis of
this they have to select the strategy so that they can examine if it is suitable, acceptable and
feasible for the organisation.

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