Business Strategy: Profitability, Market Entry, and Structure

This report provides a detailed analysis of business strategies, addressing profitability, market entry, and organizational structure across various business types. The report begins by outlining strategies for increasing the profitability of a nationally branded hair dressing business and a manually operated automobile company. It then explores the factors that make acquisition a preferred method for entering a new industry, using Australia Post's potential diversification into telecommunications as a case study. Finally, the report examines the structure, control mechanisms, and organizational culture of a small water supplier in a local town, a nationwide chain store, and a large international bank, providing justifications for each element. The analysis covers aspects such as payment options, social media campaigns, market share, cost reduction, and the impact of culture on business performance.

Running head: BUSINESS STRATEGY (MANAGEMENT)
Business Strategy Management
Name of the Student:
Name of the University:
Author Note:

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BUSINESS STRATEGY (MANAGEMENT)
Table of Contents
Answer to Question 3......................................................................................................................2
Answer to Question 4......................................................................................................................4
Answer to Question 5......................................................................................................................6
i. Small Water Supplier in Local Town...........................................................................................6
ii. Chain Store Operating Nation Wide............................................................................................7
iii. Large International Bank...........................................................................................................8
References:....................................................................................................................................11

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Answer to Question 3
3. (a). The strategies managers should develop for increasing profitability of nationally branded
hair dressing business are as follows (Hickman & Silva, 2018):
1. Revise the payment options through credit cards: Credit card puts forward
convenient payment options so switching to such business improves the salon profit as clients
find the service more preferable and convenient.
2. Hike in Prices as per set time Line: The managers should organize and plan for
imposing a hike. For instance, a hike of 3 percent can be imposed on all the products, treatment
and services in each quarter.
3. Arm Social Media and Get in More Clients: The managers should undertake social
media campaigns. Social media platforms like Instagram, Twitter and Facebook provide ideal
opportunities for the business in connecting with customers, finding newer clients and promoting
brand loyalty.
4. Expansion of the Services and Treatments: It is necessary for staying on top of
newer styles and trends since it helps in expanding the repertoire of the services offered. More
options allow the clients in booking an appointment.
5. Improving the Search Rank of the Business Site: The higher the page remains on
search engine it is likely for the potential customers to click on it followed by booking a
appointment.

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6. By Improving Efficiency and Reducing Overhead Cost of Business: Lowering the
cost while maintaining higher client satisfaction becomes difficult. Therefore, the managers must
adopt creative means of reducing cost. This might include shopping around same supplies at
lower cost, unplugging the high energy consumption when not used, ensuring better rates on the
merchant processing fees of credit cards.
(b). The strategies managers should develop for a manually operated automobile company are as
follows (Parmenter, 2015):
1. Commitment towards Identity: The managers of automobile company should not set
specific growth treadmill and chase multiple market opportunities without the hope of gaining
advantage. Instead, they should develop value proposition and build distinct capabilities that lasts
a longer term.
2. Translating Long term Strategy into Everyday Activity: Managers instead of trying
to adopt best practice of industry and treating external benchmarking as established path of
success should view things in a different manner and translate the long-term strategy as a part of
everyday activity. Besides, the managers should build and design bespoke capabilities that define
a competitive edge for the company.
3. Implementing Culture to Work: Instead of reworking the organizational chart and
rethink incentives and resist the disruptive reorganization, managers of automobile company
should put current culture at work. This helps in taping the power of ingrained behavior and
thinking that exist below the company’s surface thereby driving a change.

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4. By Reducing the Cost for Growing Stronger: The managers should implement
measures in reducing cost. They can however do so by marshaling the resources strategically
doubling down the few important capabilities and shortening back on everything else.
5. By Shaping the Future: Managers of automobile company should become agile and
not respond to the external change as fast as possible. Instead, they should shape the future
through creation of a change they prefer to see.
Answer to Question 4
A. The factors that make acquisition a preferred method of market entry to a newer
industry are as follows (Campbell, Sirmon & Schijven, 2016):
1. Need to Increase in capabilities: It results in expanded research and development
opportunities along with robust manufacturing operations. It also helps in reducing
manufacturing cost for operations that are expensive.
2. Need for Gaining Larger Market Share or Competitive Advantage: This helps in
gaining better marketing or distribution network. A company wanting to expand into the
different markets where similar companies operate need not start from the ground zero if
acquisition takes place.
3. Need for Diversification of Products and Services: Acquisition remains the
preferred method of market entry when there is a need for complementing the present product or
service. The mode of entry allows the two firms in combining the products and services and
thereby gaining a competitive edge in the market.

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4. Need for Leadership Replacement: There is a need for acquisition of the company
when the present owners are unable to identify someone for succeeding them.
5. Need for Cutting Cost: Acquisition leads to the creation of opportunities for reducing
the cost of companies selling similar line of products. Preference for acquisition as a mode of
entry will have opportunity for combining locations or reducing the operating costs through
integration and streamlining of support functions.
6. Need for Survival: Although it is very difficult for a company in willingly giving up
its own identity to a different company but sometimes acquisition remains the only option for the
survival of the company.
B. Australia post should enter into merger and acquisition for diversifying the
telecommunications business for providing online cloud computing data services and access to
the broadband for individuals and businesses (auspost.com.au, 2018).
This is because through merger and acquisition, Australia Post, will be able to earn the following
benefits (Lubatkin, 2013):
1. The company would obtain not only additional or quality staffs but also the knowledge
of the industry as well as other business intelligence. For example, businesses with good process
and management systems would be useful for the buyer who seeks to achieve self improvement.
However, the business chosen should possess systems that can adapt to running larger business.
2. It would ensure accessing valuable assets or funds for newer development. It is often
found that better distribution and production facilities are less expensive for buying than

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Board of Directors
Minister of Water
building. Australia Post should target business that are only marginally profitable and possess
massive unused capacity.
3. It would ensure accessing wider customer base and increased market share. The target
business might possess distribution systems and channels that the acquirer can use for their own
benefits.
4. It ensures diversification of products, services and longer term business prospects. The
target business would be able to offer products and services that Australian Post can sell through
own channels of distribution.
5. It ensures overhead and cost reduction by ensuring shared budgets for marketing,
enhanced purchasing power and lower cost.
6. It helps in reducing competition since buying new intellectual property, services or
products seems cheaper.
7. It accelerates the plan for growth of the existing business. Businesses belonging to the
same location or sector not only reduces cost but combines resources, removes duplicated
departments or facilities and enhances revenue.
Answer to Question 5
i. Small Water Supplier in Local Town
a. Structure:
Minister of Water

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HR and Administration OfficerCommercial Manager Technical Manager Finance Manager

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Chief Executive Officer
Sales/Procurement Director Operations Director HR Director Finance Director
b. Control:
The control for a small water supplier in local town lay not only in improving the design
and planning but the hygiene behavior and sanitation of the water supplies (González-Gómez et
al., 2013). It can be done through the introduction of sanitation program and improvements in the
water services undertaken by the engineers, planners and politicians.
c. Culture:
The small water supplier in small town can benefit maintaining a corporate culture that
helps in keeping the people productive and engaged thereby improving the business performance
(Croes, Lee & Olson, 2013). Therefore, a small business leader should consciously plant the
seeds and ensure a consistent effort. With time, the efforts help in fostering the values and habits
amongst the staffs.
ii. Chain Store Operating Nation Wide
a. Structure:
Figure 1: Organizational Structure of Small Water Supply in Local Town
Source: (Knox & Mayer, 2013)

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b. Control:
There are four types of control mechanism that the chain store can implement for
improving the performance (Saebi & Foss, 2015) .These include market control, audit control,
clan control and ensuring performance standards. Market control refers to the capability of the
buyers and sellers in exerting influence over quantity or price of service, goods or commodity
being exchanged in the market. Clan control relies on the values, beliefs, shared norms,
corporate culture and the informal culture for regulating the employee behavior and facilitating
the achievement of the organizational goals. Audit control refers to the procedure of self
examination as it relates to the products and accounts. Performance standards refer to approved
set of organizational goals, requirements and the expectations met by the employees. The four
mechanisms remain dominant in the present business world for efficiently and effectively doing
business for meeting the goals of the organizations.
c. Culture:
The culture persisting within a chain store operating worldwide should have an inclusive
culture (Steenkamp & Geyskens, 2013). An inclusive culture results in successful integration of
the diverse people into the industry or the work place.
iii. Large International Bank
a. Structure:
Figure 2: Organizational Structure of Chain Store Operating Worldwide
Source: (McCormack & Johnson 2016)

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International Bank
President Vice- President Six Members in the executive boardImplementing Decisions made by overall council
Figure 3: Organizational Structure of Large International Bank
Source : Fan, Wong & Zhang, T. (2013).
b. Control:
The large international bank should gain operational and financial control thereby helping
the bank in gaining centralized control of the key decisions while ensuring flexibility at local
level. This should however include the following (Neely, 2015):
i. Opting for facilities of In house Banking: This ensures providing a centralized control
over the funding decisions while allowing the subsidiaries in maintaining responsibility for the
routine operations.
ii. Ensuring the presence of the payment factories: This involves attaching the receivables
and payments factories to the in house bank there ensuring a centralized control over the
operations.

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iii. Creation of shared service center: This ensures providing the foreign subsidiaries
with access to the resources, centralizing the operational areas while ensuring the maintenance of
localized funding structure.
c. Culture:
The large international bank has a culture that not only support execution of growth
strategy but also influences the overall aspects of the process of decision making (Kanagaretnam,
Lim & Lobo, 2013). The culture represents something more the ethical behavior. It in fact
represents the overall operations that include the hiring, firing and rewarding of employees,
allocation of resources and the management of opportunities and risk.