Strategic Operational Management

This study explores the strategic management process through case studies on ANZ, Toyota, IKEA, and Samsung. It discusses issues in strategy formulation and implementation, as well as the application of Porter's five forces and value chain models.

Running head: STRATEGIC OPERATIONAL MANAGEMENT
Strategic Operational Management
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Executive summary
The main purpose of this study is to understand the strategic management process with the help
of a range of case studies used in this report. The report firstly talks about ANZ, the bank
identified to have been facing issues related to its strategic management processes like ‘Strategy
Formulation’ and ‘Strategy Implementation’. It then discusses about Toyota and identifies some
challenges being faced by the company. These challenges are related to supply chain and human
resource management operations. At the later stage of this report, it describes an application of
Porter’s five forces on the company and identifies some areas of improvement for the company
to attain business sustainability. Similarly, Porters’ value chain model is being applied to IKEA.
It is being found that IKEA can be benefitted from applying the model on its stores’ operations.
However, the model has no scope for its online business. Finally, Samsung is found to have been
facing issues related to its operations management. These issues are related to the company’s
analysis and assessment, strategy formulation, strategy implementation and strategy evaluation.

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Table of Contents
Question 1:.......................................................................................................................................3
Part A: HSBC, UK.......................................................................................................................3
1.1 Key issues of ‘Strategy Formulation’ and ‘Strategy Implementation’..............................3
1.2 Impact of these issues on the strategic management practices of HSBC, UK..................4
Part B: Toyota, Japan...................................................................................................................5
1.1 Key issues of decision-making in regards to ‘Supply Chain Management’ and ‘Human
Resource Management & Job Design’....................................................................................5
1.2 Impact of these issues on the strategic management practices of Toyota, Japan..............6
Question 2:.......................................................................................................................................7
a) A critical analysis of Porter’s Competitive Five Forces model as an approach for strategic
management practice in the contemporary business environment..............................................7
b) Application of Porter’s Competitive Five Forces model in the contemporary operational
environment at P&G Ltd.............................................................................................................8
c) Application of Porters’ value chain model to contemporary business environment...............8
d) Application of Porter’s Value Chain model to IKEA as an approach they can use for
strategic management practice in their contemporary operational environment.........................9
Question 3:.......................................................................................................................................9
a) A critical evaluation of analysis and assessment phase Samsung in its contemporary
operating environment.................................................................................................................9
b) A critical evaluation of strategy formulation phase of Samsung in its contemporary
operating environment...............................................................................................................10
c) A critical evaluation of strategy implementation phase of Samsung in its contemporary
operating environment...............................................................................................................10
d) A critical evaluation of strategy evaluation phase Samsung in its contemporary operating
environment...............................................................................................................................10
References......................................................................................................................................12

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Question 1:
Part A: HSBC, UK
1.1 Key issues of ‘Strategy Formulation’ and ‘Strategy Implementation’
Strategy Formulation:
Strategy formulation can be broadly divided into four distinct stages. Each of the four
stages has its own issues. These are (David & David, 2016):
 During the Listening stage, it is challenging to get the right people and their help. Hence,
it becomes difficult to identify potential opportunities.
 Under the Aim stage, issues include rejecting opportunities in low-probability areas and
avoiding common mistakes being done in selecting moves.
 During the Move stage, the issues include identifying the situations one encounter and its
proper responses. This is also challenging to know the appropriate time of doing
innovation to create the momentum.
 During the Claim stage, employee empowerment is the main issue.
Strategy Implementation:
Strategy implementation can face a number of barriers such as those mentioned below (David &
David, 2016):
 Poor strategy making
 Lack of resources
 Ineffective training
 Ineffective communication
 Absence of effective monitoring of the implementation process

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1.2 Impact of these issues on the strategic management practices of HSBC, UK
In the current operating environment these issues will have an influence on the strategic
management practices of HSBC. Currently HSBC deploys a range of strategies. These are as
follows (Hsbc.co.uk, 2019): Managing the growth: The main objective of the company is to attain leadership position
in financial services sectors. The banking industry is hugely competitive. It is important
to identify and execute appropriate strategy at the most appropriate time. This helps
taking advantage of the opportunities. However, the strategy formulation of the
strategic management processes suggest that businesses are clueless on the appropriate
time of using innovation. In summary, HSBC may face issues in getting its objective
fulfilled. Strategic human resource management: The SHRM at HSBC adheres to customer
relationship management (CRM) to improve its understanding of the global banking
consumers and be able to provide them relevant services. CRM generates large-scale
data; however, an appropriate utilisation of these data require high employee engagement
rate. On the other hand, empowering the employee participation was found as one of the
issues of strategy formulation. Hence, an effective management of CRM could be
challenging due to an uncertain employee engagement rate.
 Emphasis on four customer groups: Four customer groups for HSBC includes Private
Banking, Commercial Banking, Personal Financial Services and Investment Banking.
HSBC believes that by effectively managing both its internal and external reports for
each of the customer groups, customer satisfaction could be attained. A smooth operation
of these reporting will require many things to be in place such as an effective
communication between the global staffs of HSBC. On contrary to this, ineffective
communication is one of the barriers of strategy implementation in the strategic
management processes. If this is true then HSBC’s vision of customer satisfaction could
be affected from ineffective communication between organisational members in the
HSBC’s global network of people.

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Part B: Toyota, Japan
1.1 Key issues of decision-making in regards to ‘Supply Chain Management’ and ‘Human
Resource Management & Job Design’
Supply Chain Management:
Decision-making in supply chain is challenged for many reasons. It is pretty difficult to
prioritize between numbers of supply chain objectives. Reputed companies would never want to
compromise on any of these objectives. Some of these objectives are as below (Tamošaitienė et
al., 2017):
 High sales
 Low cost
 Quick delivery
 Low carbon footprint
Quick delivery of orders will help to fetch more other clients and the orders. This implies to
increased delivery on a monthly basis and so, the sales. However, increased sales will result in
increased revenues only when the logistics costs are the same as that of before. Indeed, this is not
feasible considering that a quick delivery will require more investments to be made on the mode
of delivery and the technology being used for it. On the other hand, if costs are kept the same as
that of before the efficiency of delivery will remain the same. In addition to these complexities,
carbon footprint is a growing issue. If the decision-making is oriented more with the reduction of
the company’s carbon footprint, the total logistics cost will increase. It is, therefore, pretty
difficult to prioritize between sales, cost, delivery and CO2.
Human Resource Management & Job Design:
The decision-making challenges to the HRM can be broadly divided into two categories
such as ‘controlling the costs’ and ‘keep adding upgraded features to the operations’.

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Globalization has impacted the way business used to be before. It has boosted women
participation at the workplace. The modern workplace now has employees from diverse cultural
background. On the other hand, the modern workplace has increased participation from ageing
population. An alternative to ageing population is conducting fresh recruitment of skilled
professionals. However, there is a global shortage of skilled professionals. In addition, emerging
technologies are increasingly becoming the part of organizations. These technologies have
impacted the organizational capacity to deliver more efficiently. It is to be noted that both fresh
recruitment and technology adoption will elevate the total operational costs (Tooranloo, Azadi &
Sayyahpoor, 2017). In summary, this can be said that decision-making is troubled for prioritizing
between the two highlighted factors in this paragraph.
1.2 Impact of these issues on the strategic management practices of Toyota, Japan
Supply Chain Management: Toyota is recently making investments in building up a
hydrogen facility at the Port of Long Beach in America. This will be done in collaboration with
Shell Oil Products US (Shell). This will attract huge investments from Toyota. The facility will
be used for fuelling vehicles with hydrogen (Aoki & Wilhelm, 2017). Hydrogen is better than
fossil fuels in reducing the greenhouse gas emission (Lenferna, 2018). Indeed, this is still
questionable whether it is ever realistic to reverse the adverse impact of man-made climate
change. However, this may be a step away from excessive reliance on fossil fuels, which will
keep intensifying the greenhouse gas impact of logistics operations. On the other hand, the move
will require Toyota to bear huge investments on the project. Hence, this will elevate the overall
costs of the supply chain operations for Toyota. The decision though has been taken; however,
this will have an impact on the net revenue.
Human Resource Management: The modern HRM as stated earlier broadly faces two
issues in respect to decision-making such as controlling the cost and keep adding latest features
to the operations. Toyota also faces one of these issues. The human resources in the company has
struggled with the speed of change in business. It means either the opportunities were not being
realised or that the HRM failed to respond to it. Technology today is causing disruptions. For
example, Uber and Airbnb have caused taxi firms and hotels to struggle respectively (Sisson &
Elshennawy, 2015). The HRM at Toyota needs to be agile and resilient. One of the biggest

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challenges for Toyota is now to remain cost-competitive while keep introducing innovative
ideas.
Question 2:
a) A critical analysis of Porter’s Competitive Five Forces model as an approach for
strategic management practice in the contemporary business environment
Porters’ competitive five forces can be criticized in context to its feasibility with the
contemporary business environment.
‘Bargaining power of buyers’ is one of the porter’s five forces to have an impact on
some industries like the food industry. However, this is not universally true as buyers’ power can
be influenced by applying new ideas to the businesses like selling tasty foods at affordable price.
Notably, tasty foods might not be very healthy; however, still preferred by many customers.
‘Bargaining power of suppliers’ says that if there are limited suppliers the suppliers will
have the dominating negotiation power for a deal. However, the fact can change with times. The
number of suppliers can grew. If this happens the industry will be much more attractive for the
businesses and the bargaining power of suppliers will also decrease.
When ‘Industry rivalry’ is high the porter’s model discourages business to enter with the
same product or service. However, quality, which is a factor of competency can be used to make
a difference. Indeed, an increased competition is beneficial to customers as due to availability of
quality products at competitive price. In this scenario, any new business with an appealing
business model could be a success. For example, the success of Aldi in Australia (Inside Retail,
2019).
‘Threat of new entrants’ says that existing businesses can suffer from a new entrant.
This is true to an extent; however, the fact is reversible as well. This means existing businesses
can still be able to perform by implementing emerging technologies and innovation. For an
example, Woolworths was still able to perform despite a solid counter from Aldi.
‘Threat of substitutes’ does really affect the existing products and services. However, the
new concept can be adopted to recreate the market value. For an example, Woolworths has
realised the need to respond to increased market competition. Hence, Woolworths is going

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digital. For example, smartphone shopping trials in one of its Sydney store, ‘express delivery’
pilots in Melbourne and Sydney and an improved Woolworths app (Supermarket.co.za, 2019).
b) Application of Porter’s Competitive Five Forces model in the contemporary operational
environment at P&G Ltd
P&G has identified five measures of superiority for business sustainability. These
measures are also mentioned in the annual report of the company. These measures are products,
packaging, retail execution, brand communication and consumer & customer value equations.
P&G believes that if at least four of the five measures are attained P&G will attain business
sustainability (Pg.com, 2019). Applying porters’ five forces to see whether four measures are
attainable. Bargaining power of suppliers: P&G need to maintain a reliable relationship with its
suppliers to be able to get quality materials and also attain a cost-advantage. This will
require P&G to create a digital channel between the company and its suppliers. This will
help its suppliers understand the business needs of P&G. Bargaining power of buyers: Customer nowadays needs customized products. It means
different customers have their own product related requirements. P&G need to engage
with its customers on social media sites like Tweeter. In this way, the company will be
able to know customers’ feedbacks of a product and their expectations with the
company. Industry rivalry: Industry rivalry is an opportunity provided that P&G learns from its
competitors. P&G should learn from Samsung about how smartly it replicates the
designs and other features of its competitors like Apple Inc. (Son & Kim, 2016) Threat of new entrants: Threat of new entrants is not too much of a problem for P&G
considering that the company has a large product portfolio and a very good market
value. Threat of substitutes: Threat of substitutes should never be a problem to P&G as the
company has capabilities to replicate the strategy of others with its own innovation.
c) Application of Porters’ value chain model to contemporary business environment

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Porters’ value chain model though have benefitted the businesses in past is no longer a
useful model. Value chain model was more beneficial for bulk productions where one product
strategy used to be considered as the universal. Nowadays, customers especially millennials want
products customized to their preferences. They want to be involved in live communication with
the company. They want it to share their feedbacks for a product or share their expectations of a
product (Harvard Business Review, 2019). Customization of products will affect the
procurement and inbound logistics. Stock items will increase and so the cost. Contemporary
firms will also require using latest and emerging technologies to be able to respond to the
change. After-sales service, which once was a part of the value chain model would see an
addition of customized after-sales service.
d) Application of Porter’s Value Chain model to IKEA as an approach they can use for
strategic management practice in their contemporary operational environment
IKEA as evidenced from the annual report is intended to become more affordable,
accessible and sustainable to its customers. To serve the purpose the company is developing
stores in new formats and e-commerce capabilities (Newsroom.inter.ikea.com, 2019). Porter’s
value chain model could be applied to new stores but not to e-commerce capabilities. This is
because the value chain model is feasible more with a bulk production, not the customized
products.
Question 3:
a) A critical evaluation of analysis and assessment phase Samsung in its contemporary
operating environment
Samsung is widely known for its frequent change of direction and development of new
products. The company’s capability to be aware of its organizational strengths and the external
business environment has helped it achieve the success in most instances. The company’s
capability to replicate designs and other features of Apple shows the utilisation of its strengths. It
constantly looks for gaps in the market and bring products to seal the gaps (Samsung.com, 2019).

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However, Samsung has met with some failures as well. The battery explosion case in Galaxy
Note 7 phones and its poor evaluation strategy post the incident just reveal one of its failures.
b) A critical evaluation of strategy formulation phase of Samsung in its contemporary
operating environment
Strategy formulation in Samsung is done in many ways such as also by learning from its
competitors. They follow the market trends with their version of the copied innovation. The way
Samsung became the world’s leading smartphone makers just reveal the cited fact. However, in
recent times its strategy formulation process seems to have outclassed by low-budget phone
makers. In Q4’17, Samsung witnessed a drop in units shipments. The company stood at 74.1
million units in the quarter (Statista, 2019). In the same quarter during the last year the company
stood at 77.5 million units (Statista, 2019). On the other hand, Xiaomi sales have risen from 14.3
million units to 28.1 million units in Q4’17 (Statista, 2019). These facts indicate that in recent
time low-budget phone makers like Xiaomi is witnessing increased sales.
c) A critical evaluation of strategy implementation phase of Samsung in its contemporary
operating environment
Samsung has been good in replicating its competitors’ strategies. The company invests
more than Apple in research and development (R&D) works. The company itself manufactures
chips, displays and lot more. This is why Samsung has the cost advantage that allow the
company being flexible with its product making strategy (Samsung.com, 2019). However,
Samsung has been a slower adopter of market trends. The low-budget phones like Xiaomi are
enhancing their market presence with passing days. However, Samsung is yet to implement
strategies to produce low-budget phones and compete with the likes of Xiaomi and Huawei
(Statista, 2019).

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d) A critical evaluation of strategy evaluation phase Samsung in its contemporary
operating environment
The strategy evaluation process in Samsung has met with failures. One of such incidents
is of battery explosion. The case execution strategy was not appropriate that also impacted its
strategy evaluation process. With powerful features in Galaxy Note 7 phones Samsung had
expected a big success. However, it did not happen. It failed miserably. A millions of units sold
to customers were recalled post the series of battery explosion incidents (Forbes.com, 2019). The
evaluation strategy missed out on identifying the hidden flaws in the phone and also in
effectively mitigating the post-incident circumstances.

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Samsung_Electronics_Sustainability_Report-2017.pdf

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