Organizational Strategy Analysis of Adnams: Recommendations for Growth

This report provides a comprehensive analysis of Adnams, a UK-based SME, focusing on its organizational strategy. It begins with an introduction to organizational strategy and its importance, followed by an examination of the external environment using PESTLE analysis, highlighting political...Read More

ORGANISATIONAL
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Key Challenges Faced by Adnams in the External Environment..........................................1
Important Aspects of Internal Business Situation..................................................................3
Strategic Options and Direction to Adnams...........................................................................5
Recommendation to Adnams over Ten Years........................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Organisational Strategy can be defined as the actions taken by an organisation in order to
plan for future and make the achievement of organisational goals to be successful (What Is the
Meaning of Organizational Strategy?,s 2019). These strategies are after properly analysing the
market conditions and based upon them, these are prepared so as to reduce their impact on the
organisation and get good results from the work of employees. These strategies work as a
guidance for the employees as on the basis of these strategies, employees are guided about what
to do and how to do? The following assignment is based on the Adnams company which is UK
based SME Company which is located in Southwold, Suffolk, England. This assignment will
cover the impact of external environment, important aspects of the internal situation of Adnams,
strategic options and directions for Adnams to consider sustainable future growth and some
recommendations to the company for the next ten years.
MAIN BODY
Key Challenges Faced by Adnams in the External Environment
In order to know about the impact of external environment on the working of the
company, the use of PESTLE Analysis will be done (Aboumatar and et. al., 2017). The
following analysis is used in order to know about the impact of external environment on the
working of the company. The description of this analysis on Adnams Company is provided as
under:
Political Factors: These are those factors which impacts upon the working of an organisation
due to the changes in the governmental policies, rules and regulations such as the tax policies,
labour laws, employment laws, political stability of the company.
When smoking was banned in UK in the premises or building, so this had accelerated the
trend of drinking beer and gave rise to the demand of these kinds of products and services and
hence impacted positively on the working of the company. The possible negative impact of the
government policies could be related to the increase in the tax rates which will create negative
impact on the working of the company as the increased tax rates will make an increment in the
prices of the company and also the impact will be on customers of the company.
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Economic Factors: These are those factors which impacts upon the working of an organisation
due to changes in interest rates, disposable income of customers, GDP, employment rate and
some other factors. The impact is shown as under:
The decreased tax rate by the government of UK increased opportunities for the company
to grow and develop as the company was having the cost advantage. Large portion of the
disposable income of customers was spent on the purchase of drinks and beers which also
impacted positively on the income of the company. The increase in the distribution cost for the
company impacted negatively on the working of the company as the distribution costs increased
the overall costs of the products of the company. The increase in the distribution cost will also
create cost burden on the company and this increased cost will be charged from customers. So as
the price increases, the demand decreases and hence creates the chances of becoming a challenge
to the company to reduce the costs.
Social Factors: These are those factors which impacts upon the working of the company due to
changes in the feelings, beliefs, tastes and preferences of people that influences their decisions to
buy a product or not. The impact of these factors on the company are drawn as under:
The ban on smoking in UK changed the preference of people as they shifted themselves
to the drinks and beers and that has impacted positively on the working of the company. The
negative impact on Adnams could arise with the opening of new micro breweries that could have
some market share of the company and this could impact negatively on the taste and preference
of the people. So the sales of the company will be impacted as the customers will now have more
choices.
Technological Factors: These are those factors which impacts upon the working of an
organisation due to changes in the way of working, producing goods and services or the
enhancement in the ways of completing the operations or processes of the company. The impact
has been drawn as under:
In order to reduce the costs to the company, the innovation was made by making use of
dual fuel trucks (using both biogas and diesel) that impacted positively for the company as the
costs were reduced (Hernaus, Bosilj Vuksic and Indihar Štemberger, 2016). The processes used
by the company in their operations has also increased the emissions of harmful gases in the
environment that has crated negative impact as the technology used in the processes by the
company does not proved to be upto the level.
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Legal Factors: These are those factors that impacts upon the working of an organisation due to
some special rules and regulations laid down by the government. The impact of this factors is
also provided as under:
The ban initiated by the government on making use of cigarettes and other smoking items
has created positive impact on the working of the company. In the negative impact which
occurred due to the increased use of alcoholic items that impacted negatively on the health of
people and forced to government to take suitable actions.
Environmental Factors: These are those factors that impacts upon the working of an
organisation due to the impact that it had created on the environment by means of completing
their operations.
As to reduce the effect of carbon emission caused due to the completion of operations of
the company, Adnams opened an Anaerobic Digester Plant in 2010 on the Adnams Bio Energy
Site. Before the establishment of this plant, the operations of the business have impacted much
adversely on the working of the company. Before 2010, the operations of the company have
impacted negatively on the environment (Nankervis and et. al., 2016).
From the above analysis, it has been clear that the company is capable of handling both
the positive and negative aspect impacting upon the working of Adnams. The negative aspects
are not considerably much as compared to the positive ones.
Important Aspects of Internal Business Situation
With the help of SWOT Analysis, it will be easy to know about the internal business of
situation of Adnams Company. The following analysis can be defined as the one use to know
about the internal strengths and weaknesses and the opportunities and threats confronting to the
business situation. The explanation of this analysis is also provided as under:
Strengths and Weaknesses
STRENGTHS WEAKNESSES
 Adnams is almost dealing the
monopoly sector where there is no
capable competitors to give
competition to the business which has
 The low expansion of the business
restricted the pace of growth and
expansion of the business as the
company was operating only at small
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become its strength and additionally the
good quality of products has also
helped in increasing the strength of the
company that attracts the customers
towards the products and services of
the company (Oyewobi and et. al.,
2016).
 The Anaerobic Digester Plant has also
become the strength of the company as
now the company is not impacting
much on the environment and this has
prevented the company from being
disturbed by the government.
 Communication process of the
company was also strong as the
discussion was made about what
happened yesterday and what to do
today. This provides the company with
needed future tasks to be completed.
scale. So this has become the weakness
of the company.
 Weakness of the company was also
related to the more government
restriction on this business as it impacts
much on the health of the customers.
The addiction of these products also
lead to severe diseases in the
customers. This has reduced the level
of production and also the sales of the
company.
 Less access to the medium for
advertising the products of the
company was also proved to be a
weakness for Adnams.
Threats and Opportunities
THREATS OPPORTUNITIES
 The possible threat is from the
intervention of government which is
due to the increased impact of the
operations of business on the
environment such as green house
emissions or carbon emissions.
 The increased health related issues also
led to the create negative impact on the
 Adnams is having the opportunity to
grow and develop its business to the
new boundaries such as in the new
countries or places as the growth rate of
the business of this company is much
higher (Karami, 2016).
 Another opportunity is related to the
distribution system of the company that
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business which also become a threat to
Adnams.
could also provide benefit to the
company as it can make increment in
the sales and income and the brand
awareness of Adnams. The company
could increase enhance its distribution
system by providing access to more
people to increase their market share.
Strategic Options and Direction to Adnams
The strategic directions and options to Adnams will be provided with the help of Porter's
Generic Model. It is also known as the Product-Market Matrix. This model is used in order to
analyse the product and market growth strategy for a business. For Adnams, this model will also
provide to be helpful as it will provide the company with strategic directions and options which
are discussed as under:
Market Penetration: In the very first strategy of this model, the main focus is on the sales of
existing products of the company in the existing markets of the company only. Adnams could
make improvement in their marketing strategies or sales promotion which will help in increasing
the sales of the company (Sajasalo and et. al., 2016).
Market Development: In this strategy, the opportunity to grow arises as the company now tries
to sell their products in the new markets by doing research which provides the company access to
new markets or by enhancing the use of new distribution channels that covers wide area.
Product Development: The third strategy of this model focuses on making new products and
selling them in the new markets. In other words, the company is providing more products to their
customers by introducing new products so that the company could achieve competitive
advantage over the competitors such as by research and innovation, being first to the market
(Yakis-Douglas and et. al., 2017).
Diversification: In the forth strategy of this model, the focus has been made on the
diversification of the business in the new markets with new products. The company by analysing
the needs and demands of the customers makes new products other than their current product
segments and sells them in the new market (Willis and et. al., 2017).
Adnams should adopt market development strategy. The reason behind this statement is
because of popularity which the products of the company got in the market. It has increased the
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opportunity for the company to grow and develop. As the new markets will become a source of
increase in the revenue of company and will also increase the brand awareness.
Recommendation to Adnams over Ten Years
The recommendations to the company are provided as under:
 It is recommended to Adnams to be up to date to the laws, rule and regulations made by
the government so as to prevent from the intervention in the working of the company.
 It is also recommended to Adnams to make its continuous focus on the development of
markets to increase the customers base and then diversify the company so that the new
product could become successful in some parts where the company is operating.
 Additionally, Adnams should also contribute towards environmental protection such as
by participating in some environmental prevention program or could start by itself which
will help in creating positive image of the company in front of people, society and the
government.
CONCLUSION
From the above assignment, it has been concluded that PESTLE Analysis is important for
every organisation to know about the impact of external environment and could develop
strategies to deal with those situation. Additionally, it is also concluded that SWOT Analysis will
help the company to strengthen their strengths and in the development of strategies to remove
weakness and eradicate the threats to the company. Further, it is also concluded that Ansoff
Matrix will help the company in knowing about the different directions in which the company
could move and also tells about the best direction which will suit the company.
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REFERENCES
Books and Journals
Aboumatar, H. J. and et. al., 2017. Towards high-reliability organising in healthcare: a strategy
for building organisational capacity. BMJ Qual Saf. 26(8). pp.663-670.
Cacciolatti, L. and Lee, S. H., 2016. Revisiting the relationship between marketing capabilities
and firm performance: The moderating role of market orientation, marketing strategy
and organisational power. Journal of Business Research. 69(12). pp.5597-5610.
Heffernan, M. and et. al., 2016. Exploring the HRM-performance relationship: the role of
creativity climate and strategy. Employee Relations. 38(3). pp.438-462.
Hernaus, T., Bosilj Vuksic, V. and Indihar Štemberger, M., 2016. How to go from strategy to
results? Institutionalising BPM governance within organisations. Business Process
Management Journal. 22(1). pp.173-195.
Nankervis, A. R. and et. al., 2016. Human resource management: strategy and practice.
Cengage AU.
Oyewobi, L. O. and et. al., 2016. Relationship between competitive strategy and construction
organisation performance: The moderating role of organisational characteristics.
Management Decision. 54(9). pp.2340-2366.
Karami, A., 2016. Strategy formulation in entrepreneurial firms. Routledge.
Sajasalo, P. and et. al., 2016. Strategy implementation as fantasising–becoming the leading bank.
Accounting and Business Research. 46(3). pp.303-325.
Willis, C. and et. al., 2017. Guidance for organisational strategy on knowledge to action from
conceptual frameworks and practice. Evidence & Policy: A Journal of Research, Debate
and Practice. 13(2). pp.317-341.
Yakis-Douglas, B. and et. al., 2017. Opening M&A strategy to investors: predictors and
outcomes of transparency during organisational transition. Long Range Planning. 50(3).
pp.411-422.
Online
What Is the Meaning of Organizational Strategy?. 2019. [Online]. Available Through:
<https://smallbusiness.chron.com/meaning-organizational-strategy-59427.html>
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