Strategic Management Analysis Report

This assignment requires students to critically analyze and apply various strategic management frameworks such as the BCG matrix, Porter's Five Forces, Ansoff Matrix, and PESTLE analysis. Students will choose a specific case study and utilize these frameworks to develop a comprehensive understanding of the organization's strategic position, challenges, and opportunities. The report should demonstrate a clear understanding of the chosen frameworks and their application in real-world business scenarios.

STRATEGIC ORGANIZATIONAL
PERFORMANCE
1

Table of Contents
1.0 Introduction................................................................................................................................1
1.1 Background analysis..............................................................................................................1
2.0 Mission, vision and objective of Peugeot Citroen.....................................................................2
2.1 Core competences and capabilities of Peugeot Citroen.........................................................3
3.0 External Environment Analysis.................................................................................................4
3.1 PESTLE analysis...................................................................................................................4
3.2 Porter's five forces.................................................................................................................6
4.0 Stakeholder analysis...................................................................................................................8
4.1 Stakeholder Mapping.............................................................................................................8
4.2 Satisfying the key stakeholders expectation..........................................................................9
5.0 Possible strategic options.........................................................................................................10
5.1 BCG matrix..........................................................................................................................10
5.2 Ansoff Matrix......................................................................................................................11
6.0 Conclusion and Recommendation...........................................................................................12
References......................................................................................................................................13

1.0 INTRODUCTION
Strategic organization performance is the global concept in which firms tries to attain
their goal by utilizing their resources efficiently. Modern era is highly competitive and to sustain
in such environment companies have to measure the performance from multiple criteria so that it
can meet with the standards and can gain competitive advantage (Hogan and Coote, 2014).
Present report is based on the Peugeot Citroen (PSA) which is the second largest auto maker firm
of Europe. Currently company is facing the continuous loss and CEO is planning to change the
strategies of the organization so that it can gain high profit and can sustain in the market for
longer duration. Current assignment will analysis the background of the Peugeot Citroen. It will
discuss the mission, goal and objectives of the cited firm. PESTLE and porters five forces
analysis of cited firm will be done in this study. Furthermore, it will describe the stakeholder
mapping in order to understand the satisfaction level of stakeholders (Scott and Davis, 2015). In
addition, report will discuss the strategy of BCG matrix and Ansoff matrix in respect of Peugeot
Citroen.
1.1 Background analysis
Peugeot Citroen is the automaker company which is well known for its blending
technical innovation and french style. It was the first company that has manufactured the first
petrol-powered car in the year 1890 (Gomez-Mejia, Berrone and Franco-Santos, 2014). Cited
firm has captured 13% of European maker and people are satisfied with the unique designing of
the products. It has strong chain and it operates globally. Peugeot Citroen has sold approx
3390000 vehicles in the year 2014 in more than 150 countries.
PSA is facing the many challenges that is creating problem for the entity. These are
discussed as below:
Many models and little profit
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It is one of the major issues for the Peugeot Citroen and due to this cited firm is unable to
run its operation smoothly (Goetsch and Davis, 2014). Due to too many models operating cost of
the organization is high whereas little profit is creating financial problem for the entity and due
to this it sometimes fails to manufactured new models. It is fact that cited firm has faced net loss
of 7.2bn Euros over last two years.
Reducing market share
It is another issue for the Peugeot Citroen, Dongfeng Motors which is the Chinese partner
of the cited firm. Dongfeng and French government both have 14% stake in the business. That is
why market share of the entity has been reduced from 25% to 14% (Dipboye and Colella, 2013).
Inexperienced staff members
PSA has employed more than 208500 employees in the organization. But when it entered
in the Chinese market then cited firm has released that most of the workers of the company are
not having sufficient skills hat are required to work in this industry. Even many of them have
experience to manufacture the trucks and buses. Whereas, Peugeot Citroen is manufacturing the
passenger cars. For that reason cited firm has to give them additional training so that they can
understand the procedure and can perform their duties well (Dong and et.al, 2014). But due to
this, operational cost of the entity gets increased that reduces its profitability to great extent.
Cultural differences
Peugeot Citroen is the second largest automaker firm of Europe but due to cultural
differences employees of the company are unable to communicate with the population of the
Chinese and French market. Some times it creates the problem of miscommunication that create
negative circumstances for the entity to great extent (Child, 2015).
New CEO of the PSA has announced that company will focus on the creative power of
team and it will produce the products as per the demand. It will help the cited firm in reducing its
issues and entity will be able to improve its condition soon.
2.0 MISSION, VISION AND OBJECTIVE OF PEUGEOT CITROEN
Peugeot Citroen is the brand name in the automobile industry, it is popular for its
innovative designs and models (Chen and et.al, 2014). Cited firm has good people those who are
committed towards the brand, they are focusing on the basic needs of the consumers and

according to this they try to manufacture the cars so that cited firm can meet the expectation of
the customers in different regions.
Mission:
Mission of the PSA is to manufacture high quality cars that can meet with the expectation
of the target audience and can reduce operational cost of the entity (Schneider, Ehrhart and
Macey, 2013). Its focus on minimizing the cost and delivery deadlines.
Vision:
Vision of the Peugeot Citroen is to contribute well in the sustainable development of the
nation and place the each model in top 3 categories.
Objectives:
Peugeot Citroen main objective is to give value to the managers and employees so that
they be loyal towards the brand and perform better. It wants to develop good relationship with
the clients and suppliers so that cited firm can identify their needs and can meet with their
expectations (Phillips and Phillips, 2016).
2.1 Core competences and capabilities of Peugeot Citroen
Peugeot Citroen is operating in the global market, it has 13 production sites and 8 joint
ventures in the United Emirate, Asia and South America. Core competencies and capabilities of
the cited firm are as following:
Produce innovation
PSA is popular for its innovative models and designs of cars. It manufactures the
passenger cars and consumers appraise the designing and innovative ideas of the cited firm
(Kelly, 2015). The company has 7 research and development departments which are spread
across the world. They try to identify the needs of the consumers and bring creativity and
innovation in order to manufacture the innovative products. Due to the strong R&D department
Peugeot Citroen has become the well known brand of this industry.
Strategic approach
Peugeot Citroen always takes support of strategic approach, it identifies the things
evaluate the ideas and them implement this in the workplace. It makes good strategist so that it
can sustain in the market for longer duration. This strategic approach of the entity has helped the
PSA in sustaining in the market after huge loss also (Wamba and et.al., 2015).

Leadership and management
It is another core competency of the Peugeot Citroen. Cited firm takes support of
democratic leadership and involve its workers in the decision making process. It helps the
organization in motivating them and making them loyal towards the brand. It takes suggestion
from the staff members so that they can share their feelings with the management well and can
perform their work with loyalty (Knowles and et.al., 2014). In addition to this, managers of PSA
are talented and they have good experience of managing the team. They identify the skills of the
people and allocate them duties accordingly so that people can feel comfortable and put its best
efforts in order to achieve the goal of the company.
Sufficient Resources
PSA is having sufficient resources, it has number of employees those who contribute well
in the success of the entity. Company also has enough technological equipment so that it can
design innovative cars that can meet with the expectation of the consumers (What is the Ansoff
Matrix?, 2017).
Good relationship with the suppliers
It is another core competence of the Peugeot Citroen that it has strong relationship with
the suppliers. Due o this bonding, suppliers trust on the entity and they provide them good
quality raw material that helps the firm in manufacturing the quality products. In addition to this,
this capability of the entity helps the organization in attracting many more suppliers and they
give them credit facility. This feature is supporting the corporation and due to this it is able to
sustain in the market for longer duration (How to use the BCG Matrix model, 2017).
3.0 EXTERNAL ENVIRONMENT ANALYSIS
3.1 PESTLE analysis
PESTLE analysis is the tool that is used by the entity to track or evaluate the external
environment of the organization. It is the framework through this, organization can monitor the
external activities and can modify its business operations accordingly (Hogan and Coote, 2014).
Macro environment analysis of Peugeot Citroen is as following:

Illustration 1: PESTLE analysis
Source: (Child, 2015) Political factors: Companies have to look upon the political condition of the nation in
which they are operating. Stability of government, taxation policy etc are some major
political factors that impact on the overall performance of the industry. If there is
restriction on import and export then company will not be able to work better. Political
condition of the UK is good and due to this automobile industry is gaining the high profit
and contributing well in the economic development of the nation. Cited firm is operating
in China, French and many more countries so this factor impact on the overall operation
of the entity to great extent (Gomez-Mejia, Berrone and Franco-Santos, 2014). Economic factor: It is the determinate that directly impact on the overall industry and by
this way company is getting affected. If there is inflation then purchasing power of the
customers will be affected. In such condition PSA will not be able to make good profit
thus, profitability of the cited firm will be affected. Changes in demand and supply may

cause that will affect the objective of the Peugeot Citroen. Changes in exchange rates,
inflation rates, foreign exchange rates, economic growth impact on the production and
operation of the PSA (Gomez-Mejia, Berrone and Franco-Santos, 2014). Social cultural factors: Europe is the country whee aging population is high, growth of
middle class people inn the South America etc impact on the company. Peugeot Citroen
is operating in many locations, culture and social preferences of each place are differed
from each other. In such condition it is required for the company to manage the people
well so that they can identify the needs of consumers of particular location and can
manufacture products as per the needs (Chen and et.al, 2014). It will help the entity in
meeting with expectation of the target audience of particular nation. Technological factors: It is the major element that affect the overall quality of the
production. If new technology come in the market then it is necessary for the entity to
adopt it so that it can meet with the standards and can manufacture the quality products.
Green technology, safety, low emission etc. are some advanced techniques which are
necessary for the car market to adopt (Schneider, Ehrhart and Macey, 2013). This helps
the Peugeot Citroen in gaining competitive advantage and satisfying the needs of the
consumers. Environment factor: Peugeot Citroen looks upon the environment safety and it products
such products which can be Eco-friendly.
 Legal factor: Safety standards, labour law, R&D legislation etc impact on the business
operation and helps the Peugeot Citroen in improving its quality standard. Cited firm
follows all norms so that it can run its business legally.
3.2 Porter's five forces
It is another environment analysis tool that supports the Peugeot Citroen in identifying
the overall effectiveness of the business (Goetsch and Davis, 2014).

 Threat of new entrant: It is low because new company is required lots of funds to invest
to come in this industry. Capital requirement, knowledge, economic scale etc are several
factors due to this threat of new entrant are low. Threat of substitute: It is high in nature because there are many other automaker firs such
as BMW, Volkswagen, Toyota those which are providing high quality products so
consumers can easily turn to substitute firm. Customer bargaining power: It is high in nature because consumers can change their
mind any time and can go towards other brand if they are not satisfied with the products
of existing firm (Scott and Davis, 2015). Suppliers bargaining power: It is average because there are limited suppliers those who
supply quality raw material.
 Competitor rivalry: It is the high because there are big players those which have strong
command over the market such as Ford, Volkswagen etc (Dipboye and Colella, 2013).
Illustration 2: Porter's five forces
Source: (Hogan and Coote, 2014)

4.0 STAKEHOLDER ANALYSIS
4.1 Stakeholder Mapping
It is the collaborative process that helps to analysis the stakeholders. It has four main
phases, which are as following:
Identifying
It is the first stage in which Peugeot Citroen identify the list of investors, stakeholders
and their objective in the business. Main stakeholders of the cited firm are Dongfeng, French
government, staff members, potential consumers etc. These are essential element and company
needs to treat them well so that their ca feel satisfied (Chen and et.al, 2014).
Analyzing
One the list of stakeholder is being identified then PSA analyses them and try to find out
their usefulness in the organization. Skilled engineers are useful for the company because they
can contribute well in the success of the entity. If any of the stakeholder is having high power to
influence the business then company pays more attention on to satisfy them (Phillips and
Phillips, 2016).
Mapping
It is another tool that helps the PSA is identifying the most beneficial or useful
stakeholder of the organization.
Illustration 3: Mapping
Source: (How to use the BCG Matrix model, 2017)

Prioritizing
It is not possible for the PSA to engage all stakeholders because it will be time
consuming process. So PSA can prioritize the stakeholders and can involve them as per their
priority in the business.
4.2 Satisfying the key stakeholders expectation
Employees and investors are the major stakeholders of the Peugeot Citroen. Skilled
engineers support the organization in gaining success, with the help of this company can achieve
its objectives. Cited firm needs to provide them incentives, accommodation facilities, recognition
etc. as per the needs so that they feel satisfied and perform in the workplace with more efficiency
(Wamba and et.al., 2015).
In addition, Peugeot Citroen focus more on investors, French government and Dongfeng
invest amount so that company can run its business smoothly. Cited firm is required to involve
Illustration 4: Stakeholder mapping
Source: (How to use the BCG Matrix model, 2017)

them in decision making process and it should inform them about performance of the
organization so that they keep faith on the entity and be connected with the organization.
5.0 POSSIBLE STRATEGIC OPTIONS
5.1 BCG matrix
The BCG matrix tool is the strategy that helps the organization in portfolio planning for
improving the condition of the organization to great extent. It is the long term strategic planning
tool that gives the growth opportunity to the entity so that it can develop its products and can
enhance the satisfaction level of the consumers. Dogs: These are such products which are of low growth products. Question marks: The product which are having high growth with low market share. Cash flow: Low growth products with high market share.
 Starts: High growth market with high market share.
Illustration 5: BCG matrix
Source: (How to use the BCG Matrix model, 2017)
One of the main issue in front of PSA that it has many models and profit is very low. So
cited firm is required to focus on such models which are very popular among the target audience
and it should invest in such products. By this way company will be able to develop or improve

its high demand products. Cited firm needs to discontinue such models which are of low growth
because due to this operation cost is increasing and company is unable to gain profit on such
models. This strategy will help the organization in achieving its goal.
5.2 Ansoff Matrix
It is the strategic planning strategy that provides the way to the manager of the
organization so that they can devise strategies for achieving the goal of the company.
 Market penetration: It is the great strategy for the entity and can help the organization in
improving its performance. Peugeot Citroen has many models which are of high demand
and having high market share. Company is required to exploit that products in the
existing market so that its sales volume can be improved (Phillips and Phillips, 2016). Product development: Currently PSA is acing the issue of lower profit because of low
sales volume. Cited firm can develop its products and can invest the amount in new
hybrid cars so that demand can be raised. By this way it will be able to meet with the
expectation of the consumers and it will help in increasing profit of the entity (Wamba
and et.al., 2015).
Illustration 6: Ansoff Matrix
Source: (What is the Ansoff Matrix?, 2017)

 Market development: It is another strategy in which Peugeot Citroen can develop the
market and can expand its cars into Asia or South American market. It can go to new
geographical location when income level of the persons are good and hey like to buy the
cars. By adopting this strategy cited firm will be able to expand its business and it will
help in accomplishing the goal of the organization (Scott and Davis, 2015).
 Diversification: It is another strategic planning framework in which PSA can sell its new
products into the new market. With the help of diversification cited firm will be able to
expand its business and it will increase demand as well (Goetsch and Davis, 2014).
6.0 CONCLUSION AND RECOMMENDATION
Conclusion
From the above report it can be concluded that PSA is the global brand it is famous for its
quality vehicles. The company is facing the challenge that it has many models but profit is
continuous declining. From the analysis it is found that working with too many models is
creating the problem for the PSA so automaker can focus on its loop fall and can improve its
operational process in order to accomplish the goal of the entity.
Recommendation
There are several ways through which PSA can improve its performance significantly.
These are as following:
 Peugeot Citroen should manufacture the cars with the use of high technology such as
green technology, low emission etc. so that it can manufacture the quality vehicles and
can satisfy consumers. It will help in meeting with the expectation of the consumers well.
 Peugeot Citroen should develop its market so that it can enter into new geographical
location and can enhance its sales volume by increasing number of consumers.
 PSA should utilize the resources well such as skills of the employees needs to be
effectively used and financial resources must be used effectively.
These all suggestions will help the cited firm in improving its performance and by this
way goal of the company will be accomplished soon.

REFERENCES
Books and Journals
Chen, X. P. and et.al., 2014. Affective trust in Chinese leaders linking paternalistic leadership to
employee performance. Journal of Management. 40(3). pp.796-819.
Child, J., 2015. Organization: contemporary principles and practice. John Wiley & Sons.
Dipboye, R. L. and Colella, A., 2013. Discrimination at work: The psychological and
organizational bases. Psychology Press.
Dong, X. and et.al., 2014. NVSim: A circuit-level performance, energy, and area model for
emerging non-volatile memory. InEmerging Memory Technologies (pp. 15-50). Springer
New York.
Goetsch, D. L. and Davis, S. B., 2014. Quality management for organizational excellence.
Upper Saddle River, NJ: pearson.
Gomez-Mejia, L. R., Berrone, P. and Franco-Santos, M., 2014. Compensation and
organizational performance: Theory, research, and practice. Routledge.
Hogan, S. J. and Coote, L.V., 2014. Organizational culture, innovation, and performance: A test
of Schein's model. Journal of Business Research. 67(8). pp.1609-1621.
Kelly, J. M., 2015. Performance budgeting for state and local government. Me sharpe.
Knowles, M. S. and et.al., 2014. The adult learner: The definitive classic in adult education and
human resource development. Routledge.
Phillips, J. J. and Phillips, P. P., 2016. Handbook of training evaluation and measurement
methods. Routledge.
Schneider, B., Ehrhart, M. G. and Macey, W. H., 2013. Organizational climate and
culture. Annual review of psychology. 64. pp.361-388.
Scott, W. R. and Davis, G. F., 2015. Organizations and organizing: Rational, natural and open
systems perspectives. Routledge.
Wamba, S. F. and et.al., 2015. How ‘big data’can make big impact: Findings from a systematic
review and a longitudinal case study. International Journal of Production Economics. 165.
pp.234-246.
Online

How to use the BCG Matrix model, 2017. [Online] Available through:
<http://www.smartinsights.com/marketing-planning/marketing-models/use-bcg-matrix/>.
[Accessed on 31st May 2017
What is the Ansoff Matrix?, 2017. [Online] Available through: <http://www.ansoffmatrix.com/>.
[Accessed on 31st May 2017]