Strategic Operational Management

This document provides an in-depth analysis of strategic operational management, including strategy formulation and implementation. It also explores the application of Michael Porter's Competitive Five Forces model and Value Chain model in strategic management practices. The case studies of ANZ Bank, Toyota, P&G Ltd, and IKEA are discussed.

Running head: STRATEGIC OPERATIONAL MANAGEMENT
Strategic Operational Management
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Table of Contents
Question 1a.................................................................................................................................2
Strategy formulation...............................................................................................................2
Strategy implementation.........................................................................................................3
Question 1b................................................................................................................................3
Supply Chain Management....................................................................................................4
Quality management...............................................................................................................4
Question 2a.................................................................................................................................5
Michael Porter’s Competitive Five Forces model as an approach to strategic management
practice...................................................................................................................................5
Question 2b................................................................................................................................6
Porter’s Competitive Five Forces model to P&G Ltd............................................................6
Question 2c.................................................................................................................................8
Porter’s Value Chain model as an approach for strategic management practice...................8
Question 2d................................................................................................................................9
Question 3a...............................................................................................................................10
Question 3b..............................................................................................................................11
Question 3c...............................................................................................................................11
Question 3d..............................................................................................................................12

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Question 1a
The strategic management enables formulation of strategies along with the
implementation of these strategies to resolve the issues and furthermore at ANZ bank in New
Zealand. The Australian and New Zealand Banking Group Limited, also known as the ANZ
bank is one the largest financial institutions in Australia that has been considered as holding a
sustainable position in terms of the market capitalisation. It has been ranked after
Commonwealth bank and Westpac Banking Corporation and thus most of the business
operations and processes of ANZ bank dominate the retail banking sector. The bank offers
good personal banking and financial solutions along with other facilities such as internet
banking, management of bank accounts, providing credit cards, home loans as well as
personal financial services too, which caters the needs and preferences of clients largely.
Strategy formulation
The internal resources of the organisation are the skilled and knowledgeable
employees of ANZ bank while the capabilities include business operations, processes,
routines and culture (Anz.com.au, 2019). The resources can be physical, tangible and human
resources as well and the capabilities enable managing complex patterns associated with the
utilisation of resources for achieving the desired positive outcomes (Slack & Brandon-Jones,
2018).
The interest rate has been reduced by RBA, which can affect the costs of borrowing
and thus lesser money will be able to be drawn from the bank loans and mortgages (Brown &
Bessant, 2013). The regulatory factors also include subjecting to constant regulatory
changes and legal oversight as well. The environmental factors contributed to issues like
increased costs of operations, such as the taxes, insurance, infrastructures which
enabled changes to the Government policies and principles and affected the rules related

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to carbon tax and emissions of gases. The increased amount of costs should help in
monitoring the changes in climatic conditions and furthermore implement policies to reduce
the carbon emissions and greenhouses too (Hitt & Duane Ireland, 2017). The political
turmoil or issues have enabled Tonga and Solomon Islands to create an impact on the
growth in economy of the nation and even affected the credit worthiness for the bank.
Due to this, the level of investments has deteriorated and it has affected the other business
areas too, furthermore led to lesser investment scopes and opportunities and reduced sales
generation for ANZ bank too. Other issues are caused with the emergence of competitors
such as Commonwealth bank, Westpac, etc (Annarelli & Nonino, 2016). The lack of
achieving the sustainability targets should be a major issue that support the business
strategies and also reflects the material issues aligned with ANZ bank’s purpose (Ansoff et
al., 2019).
Strategy implementation
Another major issue or challenge could be the leadership aspects. The leaders
must implement new organisational policies and frameworks that should be informed to the
employees and ensure proper innovation along with prevention of a risk averse culture to
provide value to its shareholders. The leaders of ANZ bank should be responsible for the
arrangement of necessary training and developmental sessions for structuring the staffs and
manage effective systems and process needed to ensure appropriate execution of formulated
strategies (Meyer et al., 2017). For example, once the cost leadership strategy is
implemented, the leaders must check whether the clients are satisfied with the kinds of
services made available at that specific cost or not, which could raise their level of
satisfaction and influence their buying behaviours too. In case of lack of minoring, there
might be various areas ignore, which could not only deteriorate the quality of services, but

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should even result in dissatisfaction among the clients largely for ANZ bank (Jackson,
Schuler & Jiang, 2014).
Question 1b
Toyota is a Japanese multinational automotive organisation that has its headquarters
in the Toyota City, Aichi in Japan and it has successfully flourished and even has been
managing good business in Australia. The company has over 364445 employees and has been
ranked as the sixth largest company in terms of market sales and revenue generated within
the automotive industry. There are a wide range of services that allow for fulfilling the
demands and expectations of clients and to ensure high level of client satisfaction at large
(Gamble & Thompson, 2014).
Supply Chain Management
One of the major issues experienced at Ford during the supply chain management is
poor supplies of raw materials and resources, i.e., the brakes, steering wheels and other spare
parts. The supply chain management system is on the verge of breakdown due to the quality
crisis which has been found on the faulty accelerator pedals used in the vehicles. The
streamlined supply chain base is faulty, which has further resulted in increasing the chances
of risks and having rely more on the only suppliers and various vehicle parts used across the
vehicles and different platforms, thus increasing the risks too (Youn et al., 2013). The major
issues in the management of supply chain also include globalisation, quality and compliance.
With the outsourcing activities, the production process is extended along with the
procurement networks which also poses serious threats by complicating the supply chain
networks (Baumgartner & Rauter, 2017). Toyota has also faced major issues related to poor
visibility of brand, lack of control and improper management of inventories while expanding
sales in the global markets due to the cultural differences and failing to adapt to the foreign
culture too.

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Quality management
The quality management is also another issue and the company failed to make
appropriate decisions to manage proper quality of goods and services delivered. The
introduction of social media channels has vastly increased the consumers’ expectations for
the quality of products and this has damaged he product recalls too, furthermore created
pressure for Toyota to deliver the best quality products with ease (Eden & Ackermann, 2013).
The floor mats and sticky pedals used in the vehicles created unprecedented acceleration and
speed, which hindered the safety of vehicles and passengers too. Poor decisions were made
regarding the quality control techniques, which ignored the monitoring of product defects and
thus the company failed to track how quality could be improved. The decisions should be
made to recall the use of Total Quality Management or TQM procedures for re-committing to
the existing ideals, values and beliefs, furthermore ensure maintenance of good quality
systems and raise customer satisfaction to the utmost level possible (Kortmann et al., 2014).
Question 2a
Michael Porter’s Competitive Five Forces model as an approach to strategic
management practice
The five forces model introduced by Michael E. Porter are assessed by the business
organisations to analyse the competitiveness within the industry and develop strategic
approaches to gain higher profit and competitive advantage in business (David & David,
2013).
Threat of new entrants
With the entry of new companies, the strategies implemented by companies might
face difficulty to enter new markets and new products and services would be delivered. This
might affect the business’ ability to sustain in the marketplace.

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Threat of substitution
Similar kinds of products made available in the marketplace can act as substitutes to
the major products of the brand and make the clients inclined to those, which are offered at
lower prices.
Buying power
According to David & David (2013), the buying power is immense and thus
developing products that can cater the needs of people is important for keeping their buying
behaviours influenced.
Supplier power
Suppliers deliver raw materials and resources and so keeping good relations with
them is critical to the success of a business
Competitive rivalry
The presence of competitors could also affect the business strategies implemented and
further reduce the market share through sales decline (David & David, 2013).
Question 2b
Porter’s Competitive Five Forces model to P&G Ltd
Competitive rivalry
The competitive rivalry force is strong considering the fact that P&G competes with
multiple rivalries within the consumer goods industry and due to this, the competitive forces
pose serious threats due to low switching costs (Pg.com, 2019). The company is well
positioned within the industry, which could allow for gaining a good leadership and market
share position too, which could improve the quality of products, improve business

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performance and maage differentiation conveniently, which could allow P&G to stay ahead
of the competitive rivalries.
Buying power of consumers
The buying power of consumers is weak because the company has successful met the
requirements of clients. The availability of substitute products is low and thus the clients
cannot access natural or homemade products from any other companies other than P&G. The
company delivers health care items by achieving growth in adult incontinence segment,
which has resulted in superiority and higher value creation. The demands in market has
further reduced the impact on consumer buying decisions contributing to the business
performance (Mackelprang et al., 2014).
Bargaining power of suppliers
The bargaining power of suppliers is also low because there are multiple third parties
that manage flow of raw materials from the suppliers of P&G. There is huge availability
suppliers, which further limits influence of individual suppliers for the company and thus the
bargaining power of suppliers is a minor threat (Pg.com, 2019).
Threat of new entrants
The threat of new entrants pose moderate threat because the moderate cost of capital
has limited the threat again P&G. The moderate scale economies have also limited the
impacts created by new entrants in the market for the organisation (De Waal, 2013). The
innovation principles followed by P&G have assisted in managing good production,
packaging and use of sustainable technologies to fuel the investment scopes too.
Threat of substitute products

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The threat of substitute products is low due to the low switching costs and the
products of P&G are quite effective and reliable when compared with similar kinds of
products of other companies. The vision of synchronising the supply chain has allowed to
update the manufacturing and production schedules by keeping suppliers inclined with the
brand, which should ensure commitment to win in the competitive marketplace, thus leaving
the substitutes behind.
Question 2c
Porter’s Value Chain model as an approach for strategic management practice
The value chain model by Porter enables managing various activities required to
operate within a specific industry aimed at delivering the best quality products and services
and ensure high level of customer satisfaction. It is an important aspect of the strategic
business management practice, which includes inputs, transformation processes along with
the acqusitions of resources and delivering the best possible outputs for generate higher
revenue and attain competitive advantage (Kramar, 2014).
Figure: Value chain

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(Source: Kramar, 2014)
The primary activities include the inbound and outbound logistics that are managed to
ensure successful distribution networks along with the management of supply chains too for
improving the efficiency of supply chain management strength. There are various business
operations and processes including the management of shipping, packaging, manufacturing
and production that are associated with the marketing activities, which could further improve
the sales revenue. The support activities are also part of the strategic management practice,
which involve maintaining a stable firm infrastructure along with managing the human
resources and technologies (Liu & Zhang, 2013). The procurement of strategies could also be
beneficial for businesses to establish relations with the international and local suppliers with
the goal of delivering the best possible goods and services and gain success both locally and
globally.
Question 2d
Porter’s Value Chain model to IKEA
The primary activities of IKEA include the inbound logistics that are related to the
purchase of raw materials acquired from over 1000 suppliers from more than 50 countries
worldwide. The stores hold a wide range of products and proper economies of scale are
managed to form strategic relationships with the suppliers (Ikea.com, 2019). The operations
include assessing the market conditions and producing units worldwide, which has also saved
a significant amount of cost while managing the human resources (Taylor, Doherty &
McGraw, 2015). IKEA’s outbound logistics include different distribution sites along with
delivering the products directly to clients without the involvement of any intermediaries. The
marketing and sales are managed through various advertisements and promotional activities
while the products are sold through stores, catalogues and even with the management of an

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online website, which is responsible for value creation all throughout. The Customer
services’ support team provides advices on the products and services to the customer and
collects necessary information, which can help in understanding their needs and buying
behaviours, furthermore influence their choices and decisions while making purchases from
IKEA (E. Dobbs, 2014).
Figure: Porter’s value chain process (E. Dobbs, 2014)
Question 3a
Google is considered as one of the largest technology organisations that has
prioritised on the delivery of internet related services along with the management of online
advertising technologies along with the best possible feature, i.e., the search engine. There are
other services delivered by the company such as cloud computing, hardware as well as
software components that have met the expectations of clients and kept them satisfied.
Google is currently considered as the Big Four technology companies in the entire world.

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The operational management is a major practice of the strategic management
procedure, which is associated with the designing and controlling of business operations and
processes related to the production. It is also related to the redesigning of business operations
and processes and focusing on the management of resources, both human resources and
financial resources properly for meeting the preferences and expectations of clients and
fulfilling the responsibilities of maintaining efficient business operations all throughout. The
strategic management practice involves using a balanced scorecard for evaluating the
business performance and making progress towards the achievement of goals and objectives
along with meeting the expectations of stakeholders. For example the company has achieved
accolades and glory by providing internet services like search engine, cloud computing,
software and hardware. Continuous improve and sustainable growth strategy enhances the
brand image of Google (Google.org, 2019). The strategies of the functional level include
innovations and facilities of work from home, which lures the clients and the customers.
Question 3b
The strategic formulation phase of the strategic management practice has assisted
Google to select the best course of action required to accomplish the business objectives. This
process has been efficient in terms of organisational growth, success and for maintaining a
framework for managing actions aimed at the achievement of anticipated outcomes. It is a
part of the situational analysis that enables appropriate strategy selection and allows for
implementing those at different levels (Holweg & Helo, 2014). Considering the example of
differentiation in the services of the data centres and search engines, continuous improvement
in these services has fulfilled the needs, demands and requirements of the customers.
Corporate level strategies of Google have enabled diversification of products and allowing
the company to enter the foreign markets with ease.

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Question 3c
The managerial skills are important for allocating the resources properly, manage
resistance to change, give rewards to the employees for keeping them motivated, which is an
essential part of the HRM and even changing the organizational structure according to the
design requirements for meeting customers’ expectations. The strategic implementation
enables management of Google to develop effective communication and revising the
organisational policies for meeting the organisational requirements with convenience. The
annual objectives are set with the assessment of organisational resources and by managing
approaches that can allow the company to respond to changes, furthermore introduce new
reward systems for gaining the best potential of employees through encouragement and
motivation (Moore, 2014). It has been linked with the operational strategy through
redistribution of roles and responsibilities between the managers and making them implement
new policies required to manage teams and foster effective teamwork and coordination at
work.

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Figure: Strategic management process (Moore, 2014)
Question 3d
At Google, the strategy evaluation phase enables undertaking control actions like
measurement of performances, reviewing the internal and external issues faced by the
organisation and undertaking corrective measures finally for achieving the desired positive
results. The company has identified the parameters at first and then measures those in terms
of performance for evaluating the progress through measurement of results with the actual
plan that has been designed. The monitoring of internal and external issues further has
contributed to the management of changes within the organisation and enabled repetition of
steps when the results might not be favourable (David & David, 2013). For example, it is
found that Google has gathered data and information to establish strategies that can help in
sustaining within the competitive business environment in the future as well. The cost
leadership strategy is an evident option which has allowed for delivering good quality
services at reasonable prices to cater the needs of people.

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Figure: Strategic implementation and formulation process (David & David, 2013)
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