Business Strategy Analysis and Models

This assignment delves into the realm of business strategy, examining various theoretical frameworks and their practical applications. Students analyze renowned models such as Porter's Generic Competitive Strategies, the Ansoff Matrix, and stakeholder mapping. Real-world case studies of companies like Marks & Spencer and McDonald's illustrate how these strategies are implemented in practice.

Business
Strategy
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TABLE OF CONTENTS
Introduction .....................................................................................................................................4
Task 1- Understand the process of strategic planning.....................................................................4
2.1 An assessment of how the missions, visions, objectives, goals and core competencies.......4
of a business inform the process of strategic planning (AC1.1).................................................4
2.2 An analysis of the factors that have to be considered when formulating strategic plans......5
(AC 1.2)......................................................................................................................................5
2.3 An evaluation of the effectiveness of the techniques which are used when developing.......6
strategic plans for a business......................................................................................................6
3.0 Task 2- Be able to formulate a new strategy..............................................................................7
3.1 Brief background on the company.........................................................................................7
3.2 Conduct an Organizational audit of McDonalds (AC2.1).....................................................8
3.3 Conduct an Environmental audit of McDonalds (AC2.2) ....................................................9
3.4 The significance of stakeholder analysis when formulating a new strategy (AC2.3).........10
3.5 Present a new strategy for McDonald's (AC2.4).................................................................11
Task 3- Understand approaches to strategy evaluation..................................................................11
4.1 Background on the company...............................................................................................11
4.2 An analysis of the appropriateness of alternative strategies related to market entry
substantive growth, limited growth or retrenchment for Marks and Spencer( AC 3.1)............11
4.3 A justification of the strategy that is selected for Marks and Spencer (AC3.2)..................13
Task 4- Understand how to implement a chosen strategy.............................................................14
5.1 Background on the company...............................................................................................14
5.2 An assessment of the roles and responsibilities of personnel who are charged with strategy
implementation (AC4.1)............................................................................................................14
5.3 An analysis of the estimated resource requirements for implementing a new strategy for
Honda (AC4.1)...........................................................................................................................15
5.4 An evaluation of the contribution from SMART targets to the achievement of strategy
implementation in Honda (AC4.3)............................................................................................15
Conclusion ....................................................................................................................................15
References......................................................................................................................................17
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Illustration Index
Illustration 1: Ansoof Matrix Model................................................................................................7
Illustration 2: Stakeholder mapping ..............................................................................................10
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INTRODUCTION
In the modern era, every enterprise is required to formulate effective business strategies
in order to accomplish its aim and objectives. Nowadays, the competition among companies in
almost every sector has become so intense that it is not easy for them to gain advantage over
other market players (Singh, Sharma and Chahal, 2011). Thus, development of potential
strategies results in increasing sales and profitability of a business enterprise by creating more
and more awareness among people in the market. The present research reports explores the
contribution made by vision, mission, objectives, core competencies in strategic planning of a
business enterprise. Along with this, it also highlights the key factors which needs to be
considered at the time of carrying out the process of strategic planning.
TASK 1- UNDERSTAND THE PROCESS OF STRATEGIC PLANNING
2.1 An assessment of how the missions, visions, objectives, goals and core competencies
of a business inform the process of strategic planning (AC1.1)
In the current scenario, formulation of strategic plans has become very important for
overall growth and success of an organization. Further, strategic planning is termed as a system
process in which companies determine how resources allocation will take place. Strategic
planning also involves formulation of action plan to accomplish aim and objective of a business
enterprise.
Key terms Definition Example
Mission It can be defined as the core
purpose for which a company
operates (Dimitrakopoulou,
2015)
The mission of McDonald's is
to become the favorite place
for customers in terms of
eating and drinking.
Vision It is defined as the statement
which reflects what a company
wants to achieve ultimately
To be a progressive burger
company by providing
customers with the best service
and product experience
Objectives These are the end points which To offer healthier alternatives
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a business enterprise wants to
achieve
to its customers within next
one year
Goal Goal of a company reflects
what particular things it wants
to accomplish over a specific
time
To provide customers with
products and services which
are of high quality and has
value for money
Core competencies These are the unique attributes
and things which make one
business different from other
market players
High quality products at low
prices is core competency of
McDonald's.
It can be expressed that in order to formulate effective strategic plans, it is required by
every business enterprise to consider its aim, objectives, vision, mission and core competencies.
The purpose behind development of strategic plans is to operate smoothly and gain competitive
advantages (Casadesus-Masanell and Ricart, 2010). Therefore, all the above mentioned elements
provides businesses with a clear direction regrading the fact what it wants to achieve. On the
basis if its core competencies, businesses can develop suitable plans to accomplish their aim,
objectives, vision, mission.
2.2 An analysis of the factors that have to be considered when formulating strategic plans
(AC 1.2)
At the time of formulating strategic plans, businesses are required to take care of different
factors. The rationale behind this is that these factors have direct impact on strategic plans and
can affect their effectiveness in negative sense. The key factors are mentioned below as:
 Impact on managers- In the present scenario, it is required by companies to determine
that what kind of impact will the formulated strategic plans will have on managers.
Nowadays manager are playing very important role in success of a business enterprise by
managing its operations ion effective manner (Zott, Amit and Massa, 2011). Thus, during
the process of planning, company needs to make sure that is the plans are feasible and do
not affect manager in negative sense.
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 Targets- It is another important factor which needs to be considered during the process of
strategic planning. The reason behind this is that all plans are being made with a purpose
to accomplish a particular thing. Thus, targets supports in developing more effective
plans as strategies are being develop with the help of a clear direction provided by those
targets.
 Resources- Companies also required to considered the major resources which they have
at the time of formulating strategic plans (Baden-Fuller and Morgan, 2010). On the basis
on resource available, businesses can determine how much financial and human resource
can be invested.
 Time- It is another major factor which needs to be considered during the process of
strategic planning. It is required by businesses to develop an appropriate and specific time
in which the plans can be accomplished.
Positive Negative
Taking care of the strategic plans impact on
managers will support in developing sense of
satisfaction among all managers
It will make the process of strategic planning
more complex.
2.3 An evaluation of the effectiveness of the techniques which are used when developing
strategic plans for a business
In order to develop effective strategic plans, here are various techniques which can be
used by a business enterprise. Some common techniques are Space, Boston Matrix and Ansoff
Matrix model which can be implement for carrying out the process of strategic planning. The
model of Ansoff matrix is considered as one of the most effective technique which can be used
by managers and businesses. Furthermore, the matrix consists of four major grid or quadrants
which is used in order to develop strategies to achieve aim and objectives (Astrachan, 2010). On
the basis of aim and purpose of a business enterprise can choose any one of all the available
strategy. For example if a brand aims at increasing its sales and profits in home market, it can
adopt strategy of market development. According to this strategy companies are required to
establish new sales channels and carry out strong marketing in order to increase sales in existing
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market. On the other hand, risk taking businesses can adopt the strategy of diversification where
new products and services are introduced to new markets.
Thus, it can be stated that the technique of Ansoof Matrix is more effective in terms of
strategic selection. The rationale behind this is that it provides businesses with more effective
and the best suitable strategy as per their need, objectives and nature.
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Illustration 1: Ansoof Matrix Model
(Source: Carroll and Shabana, 2010)

3.0 TASK 2- BE ABLE TO FORMULATE A NEW STRATEGY
3.1 Brief background on the company
McDonald's is one of the leading international chain of hamburgers restaurant which is
presently operating in more than 121 countries of the world. Furthermore, is operates with more
than 30000 restaurants and has employed more than 42000 employees. The brand was
established in the year 1954 and its core products includes french fries and hamburgers. It can be
stated that since its establishment, McDonald's has always followed the strategy of aggressive
expansion (McDonald, 2015). This means that irrespective of market conditions, it has always
looked forward to increase its number of store and expand in international markets. The key
concept behind selection of aggressive strategy was that more number of outlets will attract more
customers and this will directly results into increasing sales and profits. At present, McDonald's
is leading brand in fast food industry of the world and it has acquired high degree of customer
loyalty and satisfaction.
3.2 Conduct an Organizational audit of McDonalds (AC2.1)
Organization audit can be defined as the process in a systematic assessment is carried by
out in order to become aware of the methods, operations, strategic and processes of a business
enterprise. Furthermore, it is very beneficial for companies to carry out organizational audit as it
directly contributes in development of effective strategies to gain advantage over other market
players (Aaker, 2008). Value chain analysis, bench-marking and SWOT analysis are some
techniques which can be used for carrying out audit of an organization. It can be stated that
SWOT analysis is one of the most commonly used technique for organizational audit. It supports
in getting aware about the key strengths, weaknesses, opportunities and threats faced by
company (Baker and Hart, 2008). On the basis of this assessment, companies can become aware
the key areas where they are lacking. SWOT analysis of McDonald's is mentioned below as:
Strength
 One of the core strengths of
McDonald's is its brand name which is
highly recognized all across the world
 Quality of its food products and
Weakness
 McDonald's is very weak in terms of
new product development
 Declining market share in last few
years has emerged as another major
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services is another core strength of the
brand
weakness of McDonald's.
Opportunities
 The brand has opportunities to carry
out international expansion as there are
many markets which are not explored
by McDonald's.
 It also has opportunity to form joint
ventures with retail supermarkets
Threat
 High degree of competition in market
has emerged as the major threat in front
of McDonald's
 Another threat is that people have now
become health conscious and they are
now looking forward for healthier
products
3.3 Conduct an Environmental audit of McDonalds (AC2.2)
Environment audit can be termed as an effective assessment carried out with an objective
to become aware of external environment factors which can affect performance and operations of
a business enterprise. PESTLE and Porter five forces are the two common techniques used to
carrying out environment audit of a business enterprise (Hagel and Brown, 2005). Further
PESTLE analysis is a technique which assist companies to become aware of major external
factors and their relevant impact on business operations. The PESTLE analysis of McDonald's is
carried out below as:
PESTLE FACTORS
Political factor McDonald's is executing their chains in most of the countries therefore,
political factor mainly impact their activities in the different region. The
company need to abide various regulation and rules that are framed by
the government in order to maintain hygiene factor within their products.
Along with this, political factor also include different trade agreements
as well as tax reform that company must ensure to sustain its position
within different region.
Economical factor Another external factor that impact the operations of McDonald's include
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economical factor that assists the fast food company in taking effective
decisions regarding importing or exporting their raw material. The factor
also include tax rates, tariffs etc. that ensure calculations of Tariffs on the
raw material that is imported within the countries.
Social factor Another factor that exists in the external marketplace that directly impact
the performance of fast food chain is changing or evolving lifestyle and
preferences of the customers. In the present scenario, preferences of
customers get change as they are seeking to purchase healthier fast food.
Therefore, McDonald's must ensure change in their products that they
offer to satisfy the demand of customers.
Technological factor Another external factor that impact the performance and operation of
McDonald include technological factor. Implementing high
technological equipment will develop the activities of management as
well as it also improve the productivity of the fast food organization.
With the increasing technological factor it support the customers in
making payment of food in effective manner.
Legal factor In addition to this, another external factor that is key concern to fast food
company is adhering the legal requirement in the workplace. The legal
factor mainly include implementing labour laws, employment law etc. so
that they may not engage in any unethical activities. For instance,
company need to abide animal welfare regulation that support in
implementing the practices and policies to ensure proper welfare of
animals.
Environmental
factor
The last external factor that affect the operational activities of McDonald
include environment factor that ensure fast food company must engage
in conducting Corporate Social responsibilities activities for protecting
the surrounding or society.
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3.4 The significance of stakeholder analysis when formulating a new strategy (AC2.3)
Stakeholders can be defined as all people and parties which are indirectly or directly
affected by operations of an organization. Furthermore, external and internal are the two main
stakeholder of a business enterprise (Loeppke and et. al. 2007). Stakeholder analysis is a process
which is carried out with an objective to determine how major stakeholder will be affected by a
proposed plan. On the other hand, stakeholder mapping is an effective tool which is used to carry
out analysis of firm different stakeholders.
It can be stated that it is very important for businesses to carry out stakeholders analysis
at the time of formulating and implementing a new business strategy. Internal stakeholder such
as employees and managers are directly affected by operation of a company therefore, it is
required to carry out analysis of these stakeholders before implementing any strategy. On the
other hand, analysis of external stakeholder such as suppliers and customers help in getting
aware of the fact that whether the developed strategy will produce desired results or not.
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Illustration 2: Stakeholder mapping
(Source; North and Macal, 2007)

3.5 Present a new strategy for McDonald's (AC2.4)
On the basis of above carried out internal and environment audits, it can be stated that the
strategy of product development can be adopted by McDonald's. Further, the brand will be
required to develop new product as per chaining demands and taste of people in marketplace. As
it has been already discussed that the major threat which has been faced by McDonald's is related
to the fact that people now prefer to consume healthier food products instead of burger and fries
(Olson, Slater and Hult, 2005). This threat can be converted into potential opportunities by using
strategy of product development. Here the brand can introduce new range of burgers which are
healthier and do not contain any kind of fat or cholesterol. This will help McDonald's to attract
customers and increase it sales. Along with this, it will also support in getting competitive
advantages over other market players.
In addition to this, McDonald's must also focus on the framework that is Porter's generic
model that basically target on the three generic strategies that support the company in attaining
growth in competitive fast food industry. Basically this framework focuses on three growth
strategies that cost leadership, differentiation as well as focus strategy. The foremost strategy is
cost leadership through implementing this strategy company would attain superior profit through
offering their products in the lower cost. On the other hand, another strategy within the model is
differentiation strategy that focuses on creating unique product within the industry to attain
growth and target the large audiences. This new strategy must be focused by McDonald that
assists them in attaining the growth in fast food industry. The last strategy within the framework
include focus strategy under which company concentrate the specific area or segment within the
market so that they may sustain in the market. Therefore, the proposed new strategy according to
porter's generic strategy is differentiation strategy through which they can create unique fast food
product that keep attract customers towards McDonald's.
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TASK 3- UNDERSTAND APPROACHES TO STRATEGY EVALUATION
4.1 Background on the company
Established in the year 1884, Marks and Spencer is considered as one of the leading
clothing retailer in the world. Furthermore, it is operating with more than 1300 stores in different
nations all across the globe (Marks & Spencer's, 2015). One of the key reason which has
contributed in success of Marks and Spencer is that it has always taken well care of all its major
stakeholder. This includes satisfying changing needs of customers and meeting demand of its
staff members. Along with this, it has always looked froward for the ways through which it can
deliver high quality products and services to its clients.
4.2 An analysis of the appropriateness of alternative strategies related to market entry
substantive growth, limited growth or retrenchment for Marks and Spencer( AC 3.1)
In last few years, the clothing and food retail industry has become highly competitive as
there are many small, medium and large market players operating in this industry. Thus, it is
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Illustration 3: Porter's Generic strategy
(Source: Three Generic Competitive Strategies, 2005)

required by Marks and Spencer to determine and implement appropriate strategies to attain high
growth rate. Different strategies along with their appropriateness is mentioned below as:
Alternative strategy Options Explanation
Market entry strategy Mergers, acquisition and
strategic alliance
Marks and Spencer has an
option to carry out mergers and
acquisition with other small
brands operating in the
marketplace. Along with this,
it can also form strategic
alliance with different
companies to enter new and
potential markets.
Substantive growth strategy Vertical and horizontal
integration
Marks and Spencer can go for
horizontal integration where it
can merge with other company
operating in clothing retail. On
the other hand, it can also use
vertical integration by using
different channels of
distribution.
Limited growth strategy Market development,
diversification, product
development and market
penetration
In market development
strategy, Marks and Spencer
will be required to sale existing
products and new market. The
concept of diversification will
result in introducing new
product to new market (Bower
and Gilbert, 2005). In strategy
of product development,
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Marks and Spencer will need
to develop new product for
same market. At last in
strategy of market penetration,
the brand will need to increase
sales of existing products in
existing markets.
Disinvestment strategy Retrenchment and turn around Marks and Spencer can go for
retrenchment where it will be
required to lower down its
scale and size of operations in
order to become more effective
(Chaffey and White, 2010).
Other than this, turnaround
strategy will support in
converting businesses or areas
of loss into profits making.
4.3 A justification of the strategy that is selected for Marks and Spencer (AC3.2)
In the present scenario, the market in developed nations has become highly competitive
and this has resulted in creating several kinds of obstacles in Marks and Spencer growth and
development. As per the above carried out discussion, it can be expressed that there are various
types of growth strategies available in front of businesses. Furthermore, companies are required
to choose any one of the above mentioned strategies (Loeppke and et. al. 2007). For a brand like
Marks and Spencer, the strategy of market development will be more suitable. According to this
strategy, the company will be required to introduce existing products and services in some new
markets where it is not operating (Astrachan, 2010). Due to intense competition in existing
markets, this strategy will support in finding new and potential customers. However, it can be
argued that in-depth and effective market research will be required to carry out by Marks and
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Spencer before entering new market. The justification of suggested strategy is that as compared
to other strategy market development is more suitable. The use of disinvestment strategies may
results in lowering down sales of the company whereas merges will force the brand to share
profits. Acquisition will require large amount of investment and the strategy of diversification
will be very risky. Thus, market development is one of the most effective and suitable strategy
for Marks and Spencer.
TASK 4- UNDERSTAND HOW TO IMPLEMENT A CHOSEN STRATEGY
5.1 Background on the company
Honda is an automotive manufacture company which was established in the year 1946.
Its products line includes bikes, auto motives and other power related equipment. It can be also
argued that Honda is considered as one of the leading internal combustion engine manufacturer
in the world. Every year more than 14 million engines are being manufactured by Honda and it is
one the major contributor in Honda's overall revenue. In terms of competitor, it can be expressed
that the brand is facing intense competition from organizations such as Toyota and Suzuki
motors (Zott, Amit and Massa, 2011). On the other hand, the company has always encouraged
innovations and creativity in its operations, products and services.
5.2 An assessment of the roles and responsibilities of personnel who are charged with strategy
implementation (AC4.1)
The process of strategy implementation can be considered as a tough task as companies
are required to take care of various factors and deal with lots of challenges. Furthermore,
personnel in charged with strategy implementation posses lots of roles and responsibilities which
they are required to accomplish in the best possible manner. It is the key responsibility of
personnel in charge to carry out stakeholder analysis and ensure that stakeholders are not
negatively affected by strategy of business. Along with this, the person also plays very crucial
role in carrying out effective communication (Carroll and Shabana, 2010). In simpler terms,
communication can be defined as the process of passing information from one person to another.
Formal communication include exchange of information takes place through a well defined
medium. On the other hand, informal communication do not follow any kind of specific channels
to exchange information. It can be expressed that communication is a very important process as
effective communication directly results in accomplishment of aim and objectives of a business
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enterprise. Furthermore, horizontal and vertical are the two common forms of communication
which are used (Hagel and Brown, 2005). Horizontal communication is carried out between
people working at same position and vertical is carried out between superior and subordinate.
Horizontal communication is important to manage and coordinate activities within different
departments and vertical communication is essential to provide suggestion and instructions.
5.3 An analysis of the estimated resource requirements for implementing a new strategy for
Honda (AC4.1)
Resource allocation can be termed as the process in which effective plans are being
developed in order to make use of available resources in the best possible manner. At the time of
implementation of new strategy, Honda will be required to consider factors such as financial,
time, money and human resources (North and Macal, 2007).1. Financial resources- If the brand is looking forward to adopting strategy of product
development then it will be required to determine how much amount of financial
resources will be needed to carry out the same. Adequate financial resources will support
them in successfully implementing their strategy in proper manner so that they can drive
innovation within their product line. For example, finance will be needed to set up
manufacturing units in new market, hire employees, day to day operations etc. A
minimum 400,000.00 GBP will be finance required to implement new strategy of market
development for Honda.
2. Human resources- On the other hand, it will also need to identify the numbers and skill
set required in terms of human resources. This is going to support in implementing
strategy in the best possible manner and get desired results. Effective planning and
allocation will also result in allowing the company to eliminate situations such as lack of
resources. For instance, human resource are the key resources that is required for
implementing the new strategy within Honda. In order to implement new strategy such as
marketed development the brand will personnels such as managers, technicians,
supervisors etc. In the new market, human resources in the field of marketing,
management,operations etc. will be needed in order to develop the same.
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5.4 An evaluation of the contribution from SMART targets to the achievement of strategy
implementation in Honda (AC4.3)
The concept of SMART targets is used to carry out the process of goal creating in the
best possible manner. It can be stated that at the time of formulating strategies, SMART targets
plays very important role as they provide specific directions to a business enterprise. Honda can
make use of these targets in order to get the desired outcomes of the implemented strategies. One
of the most important benefit of such target is that they are not vague (Zott, Amit and Massa
2011). This means people and businesses can also identify the fact that whether they are heading
towards right direction or not. On the other side of this, setting up SMART targets will also
allow Honda to monitor its overall progress very easily because they are accurate and
measurable. Setting up these targets will also result in motivating Honda and its employees to
implement strategy and obtain best results of the same. The example of SMART objective and
their contrition is mentioned below :
 To establishing two new manufacturing unit in new countries such as India and china
within next one year. This smart objective will support the brand in increasing its overall
market share, sales and customer base.
 To develop one new model of automotive within next 2 years. This smart objective will
help the company to attract new customers and increase its existing sales.
CONCLUSION
From the above carried out research, it can be concluded that in order to sustain in
marketplace and gain competitive advantage over other businesses, it is required by
organizations to develop effective strategies. Further, companies are required to take care of
various factors at the time of formulating strategic plans. It can be inferred that McDonald's can
make use of product development strategy to increase its customer base and sales in existing
markets. On the other hand, it can be concluded that for a brand like Marks and Spencer, the
strategy of product development is more suitable as compared to other strategy.
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Online
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[Accessed on 22nd June 2016].
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[Accessed on 22nd June 2016].
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