Strategic Analysis of CARTERS: Internal and External Factors

This report provides a critical strategic analysis of CARTERS, a New Zealand-based building materials company. It examines the internal and external environments, utilizing strategic tools such as PESTEL, Value Chain, and VRIO to assess the company's strengths, weaknesses, opportunities, and threats. The report also evaluates the impact of CSR principles and the Treaty of Waitangi on CARTERS' operations. The analysis includes recommendations for long-term strategic direction, innovation, sustainable competitive advantages, and stakeholder engagement through a communication plan. The findings highlight the importance of internal resources, competencies, and external factors in shaping CARTERS' strategic decisions and future growth. The report concludes with recommendations for improving the company's strategic position and achieving its goals.

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Executive Summary
The working of an organisation is dependent on the strategic plans and decisions
that are created and taken by the leaders and managers. For developing strategic
plans, it is essential that the internal and external environments of the respective
business are analysed, interpreted and discussed. It helps in taking more effective
decisions and reduces the probability of being affected adversely by the
environmental changes. This report is based on the strategic analyses performed for
CARTERS through the use of strategic tools like PESTEL, Value Chain, VRIO, CSR
principles and the assessment on the implications of principles of Treaty of Waitangi.
CARTER is a New Zealand based company founded by Alex Harvey in 1886 as part
of the construction industry. The firm provides building materials and supplies that
help in adding value to the overall building projects.
The internal and external environment analyses of the company were performed in-
depth to identify the strengths, weaknesses, opportunities and threats that are
acquired. For the purpose, the Value Chain analysis presented that the company’s
products, intellectual resources, and technology of CARTERS are the main
strengths. Further, infrastructural resources and capabilities are the weaknesses of
the company because these do not provide the accessibility and benefits of reducing
environmental implications. The sustainability perspective of the firm is quite weak
which leads to the weakening position. However, there are opportunities identified in
the form of organisational culture development and the utilisation of effective
technological resources. The threat for the company is the financial statement it is
because the company has accountants, and there will be a chance in mistake in the
data.
The application of the PESTEL tool and the VRIO analysis helped in assessing the
external and internal environment conditions for CARTERS. The working of the
company is benefited from the strength of high value resources and higher
competitiveness because the supply building materials provided throughout the land,
have already developed an extensive network in that regard. However, the biggest
problem or weakness the company may face in the regard are property issue and
material issue. The constant change of preferences in the market from the
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customers is creating threats for CARTERS to sustain its competitive position and
acquire subsequent benefits.
On assessing the implications of CSR principles on CARTERS, it was identified that
the company is making efforts which give benefits to the stakeholders and excluding
any ethical implications. Further, the company needs to take different approaches to
satisfy their customers and think about their respective demands. The managerial
discretion principle has a strong impact on the functioning of CARTER because if the
manager breached his/her duty towards the company, it would be very harmful for
the overall reputation.
Furthermore, the assessment of the impact principles of Treaty of Waitangi are
creating on the business strategies, business activities and the business
relationships of CARTERS, it is identified that the company has been benefitted from
the inclusion of same. Moreover, the strategies, activities and relationships of the
company are profoundly affected by the principles excluding the protection
principles. It is recommended for the company to have a long-term strategic direction
of acquiring innovative sustainable competitive advantages through the vision
statement of “We are your building partners”. Further, the values of having highly
motivated workforce along with the best infrastructure to build the international
business are recommended for CARTERS. The company should follow the
subsequent communication plan produced in this report for engaging the
stakeholders and actively improving the overall effectiveness in working.
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Table of Contents
Executive Summary......................................................................................................2
List of Tables................................................................................................................6
Introduction...................................................................................................................7
Overview of organisation..........................................................................................7
Strategies of CARTERS............................................................................................7
Overview of external environment............................................................................7
Overview of internal environment.............................................................................8
1.0 Critical Analysis of CARTERS................................................................................8
1.1 Internal Resources of Caters..............................................................................9
1.2 Internal Competencies of Caters......................................................................15
1.2.1 Analytical Tools..........................................................................................16
Value Chain Analysis.......................................................................................17
VRIO Analysis..................................................................................................20
2.0 Comprehensive Evaluation of External Environment of Carter............................25
3.0 Impacts of Corporate Responsibility Principles of CARTERS.............................31
3.1 Principles of Corporate Social Responsibility...................................................32
3.1.1 Principle of Legitimacy...............................................................................32
3.1.2 Principle of Public Responsibility...............................................................33
3.1.3 Principle of Managerial Discretion..............................................................34
4.0 Discussion of Bi-cultural Partnership and the Treaty of Waitangi........................36
4.1 Analysis of impact on Carter’s Strategy, activities and relationships...............38
5.0 Conclusion............................................................................................................40
5.1 Impact of the internal environment...................................................................40
5.2 Impact of the external environment..................................................................41
5.2.1 Principles of Treaty of Waitangi.................................................................41
5.2.2 Principles of CSR.......................................................................................41
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5.3 Strategic Direction of CARTERS......................................................................42
5.4 SWOT analysis of CARTERS...........................................................................42
Recommendations......................................................................................................44
Recommendations on Long-term Strategic Direction for CARTERS.....................44
Recommendations on SMART Strategic Objectives for CARTERS......................44
Recommendations on achieving innovation and sustainable competitive
advantage for CARTERS........................................................................................44
Recommendations Development of Communications Plan for Stakeholder
Engagements..........................................................................................................45
References.................................................................................................................47
Appendices.................................................................................................................51
Appendix: 01 Critical Success Factors...................................................................51
Appendix: 02 SMART Directives............................................................................52
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List of Tables
Table 1Identification and analysis of internal resources and capabilities(CARTERS,
2019)...........................................................................................................................15
Table 2Value Chain Analysis of a company...............................................................17
Table 3Identification of internal competencies applying Value Chain Analysis
(CARTERS, 2019)......................................................................................................19
Table 4Assessment of resources, capabilities and competencies of CARTERS
(CARTERS, 2019)......................................................................................................23
Table 5Comprehensive evaluation of Carter's external environment (Carter, 2019).29
Table 6Impact of Treaty of Waitangi on Carter's strategies, activities and
relationships (CARTERS, 2019).................................................................................39
Table 7Critical Success Factors for CARTERS (CARTERS, 2019)..........................51
Table 8SMART Derivatives for CARTERS (CARTERS, 2019)..................................52
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Introduction
The environmental condition analysis of any company is essential for creating
strategic plans. However, the main aim of this report is to critically analyze the
external and internal environment of CARTERS. This report focuses on identifying
and creating strategic plan for CARTERS through the effective analysis of its
business environment, resources, capabilities and competencies.
Overview of organisation
CARTERS are a well-known and reputed construction company. Alex Harvey first
founded this company in the year of 1886. This company owns various products and
services in New Zealand. This company is the leading merchant company of New
Zealand. The company is dealing with various new building projects which are
profitable for this company. The tradesmen of this company are highly creative and
own various skills. The workers know their job very well, and they give their opinions
whenever needed. However, the services of this company are full of expertise and
proper knowledge.
Main Operations:
This company has completed their 150 years recently and trying for future
development. This company owns 14% of market shares according to the report of
2018 (www.carters.co.nz. , 2019). This company includes different types of services like
manufacturing service, installation service, Joinery services, estimation services and
many more. The estimation services are well developed and fast. The external and
internal condition of the company is entirely accurate for the customers.
Strategies of CARTERS
The strategy of CARTERS is to provide expertise in the building projects as per the
requirements and conditions presented by clients. The building supplies that are
provided to the clients by CARTERS for keeping a huge brand identity and relation.
The company functions as a building partner for the future projects that will be
presented by customers. Apart from giving advices, the company successfully
frames and manufacturers the truss for the building projects in future as part of the
loyalty programme developed by CARTERS.
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Overview of external environment
The external environment of any company includes the political, technical, economic
and social and environmental conditions of the country (Khalique, 2014). These
various conditions are highly effective in the development of any company. This
company is situated in New Zealand, and thus the economic, political and social
factors of New Zealand are creating an impact on the growth of the company. The
GDP growth of this country is 2.8%, and the unemployment value is 4.9%. The
government is stable in this country and appreciates the business for the economic
development of the country (Mackie, 2017). The inflation rate of this country is 1.9%,
and the population of this country is purchasing multiple services of this company.
Artificial intelligence, information systems and various online operations are applied
as a technological facility in this country. However, different factors of this external
analysis are beneficial for the development of CARTERS. These various factors are
beneficial for the company for further growth and improvement.
Overview of internal environment
The internal environment of any company includes various factors like the resources,
culture, management, infrastructure and many more. CARTERS include various
human resources and a good management team which plays an essential role in the
business of this company. Based on the internal capabilities, resources and
competencies of CARTERS, the decisions associated with implementation of a
strategy are considered. It is essential for a company to have strong internal
environment and corporate culture so that the employee behaviour and decision of
the company are effective.
1.0 Critical Analysis of CARTERS
Internal resources:
Internal resources for any organization or company have many impacts on the
company. The internal resources for any define the internal structure for the
company that includes the employees of the company, volunteers, target markets,
patents, investment opportunities and many more factors that provide the strength to
the company. If there will be any problem takes place in the internal resources of the
company, then it will make the company weak in their performances. So internal
resources are beneficial for the company, and they make the company able for the
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competition in the market. In New Zealand, many companies are strong and provide
a tough competition to any new organization in the market. In the following table, the
internal resources of the CARTERS Company will be analysed.
Internal Capabilities:
The internal capabilities of an organisation are considered as the ways through
which people and systems collaborate and contribute for meeting the business
requirements and keep track of effective functioning. There are capabilities like
business necessity capabilities, strategic support capabilities and the advantage
capabilities that create a strong platform for the strategies prepared by the company.
The subsequent profit of the company is derived from the internal capabilities.
Internal Competencies:
The internal competencies of a company like CARTERS presents the ability of a
person in performing a specific task or job in the desired manner with the application
of knowledge, skills and the respective behaviour. The internal competencies of
CARTERS include analytical thinking, computer competency, forward thinking,
conceptual thinking, client service, etc.
1.1 Internal Resources of Caters
Internal Environmental
Elements
Resources (Identification
& Analysis)
Capabilities
(Identification &
Analysis)
Product Pre-nailed frame: The
draftsman of the CARTERS
uses pre-nailed truss and
frame manufacturer.
Latest products: The
draftsmen of the CARTERS
use all the latest products,
and they are always updated
with the new and latest
Provide High qualities
trusses along with
frames: CARTERS is
the company in New
Zealand that provides
the highest quality of the
pre nailed and pre-cut
trusses and frames in
manufacturing the
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products in the market and
use those products in their
work.
Installation service: The
team of the CARTER
company not only provides
the required material, but
they also install those
materials in the selected
area.
building and blocks.
Service at any time:
CARTERS can provide
their services at any
time whenever their
customers try to contact
with them. They
responded immediately
to their customers and
started their job as
quickly as possible.
Helpful for a start-up
business: In the
CARTERS, there is a
team called “Joinery
Supplies team” who
will help any person by
providing their
professional service
along with competitive
pricing on the products
that the customer’s
needs for their joinery
needs.
Technology Cad-cam technology: The
company CARTERS uses
“CAD-CAM technology” for
preparing their design and
also to get an idea about the
implementation of their
designs.
IT section: The company
also has their own IT section
Effective product: The
company uses CAD-
CAM technology for
their designs. From this
technology, they build
up more efficient
designs for their
customers.
With the help of this
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that will provide them with
more secure information
technology. Except that, with
the help of that, IT section
the designs that they have
designs with making more
secure.
technology, the builders
of the CARTERS can
build up more useful
products for their
customers as the CAM
technology runs with the
computerized system
and the software that
install in the system
control the
manufacturing process.
So for this, there will be
very less chance for the
errors in their products.
Financial Accountant: The company
CARTER have their
accountants who will deal
with all the financial
transactions of the company
(http://www.annualreports.com.
, 2018). Not only that those
accountants also deal with
the remuneration of the
employees, loans of the
company and calculate all of
the interest of the loans that
the company takes for their
business. The accountants
of the CARTERS make the
company updated with their
financial status and provide
the company with all of the
financial information
Accuracy of the
finance status: The
employees of the
CARTERS company
who are dealing with the
finance are capable of
performing any
"financial management
function". All of the
employees in the
company are updated
with the account and
accuracy of the
company (Al Shobaki et
al. 2017).
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whenever they want.
Funds, deposits and cash:
The funds, deposits and the
cash flows of any company
are vital of the internal
resources. Except for those
equivalents and the liabilities
of the flows of the cash are
also crucial as the internal
resources of the finance.
Financial situation:
The financial situation of
the company CARTERS
is secure. In the year of
1973, the company
makes its partnership
with the "Oji and
Kohusaku papers”.
From their partnership
now they can make their
active financial situation.
They also have grown
many more partners with
the time, and in the year
of 2015, the company
have their financial
status of NZ$ 3.5
billion.
Human Management team: The
management of the
company is an essential
internal resource. It is
because the management
has responsibility for
motivating their employees
and for designing the
strategies for their company.
If the management is unable
to make proper strategies,
then the company will not
run successfully. The
CARTERS company has
their perfect management
Team coordination: in
the company
CARTERS, there are
good management
team. For the excellent
management team, in
the company, proper
coordination between
the staff and the
employees are building
up. So, from this, it can
be said that with the
help of well
management team, the
company becomes more
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