Strategic Management Report: Analysis of Fit, Forces, and Change

This report delves into the core concepts of strategic management, emphasizing the significance of achieving strategic fit within an organization. It explores the strategic management process, the external and competitive environments, and the application of Porter's Five Forces framework for competitor analysis. The report then proceeds to analyze the rationale for adopting a revolutionary approach to change, differentiating it from an evolutionary one, and discusses various generic competitive strategies. Furthermore, it covers organizational strategies, including the balance scorecard, and addresses the concept of strategic drift, providing insights on how to avoid it. The contribution of administrative management to implementing strategy, particularly in leading strategic change, is also examined. The report uses diagrams and models like the SWOT analysis and game theory to illustrate key points and concludes with a comprehensive overview of the topics discussed, providing a solid understanding of strategic management principles and their practical applications.

Strategic management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1 IMPORTANCE OF ACHIEVING STRATEGIC FIT......................................................1
Strategic management process.....................................................................................................2
The general and competitive environment...................................................................................2
Structure conduct performance....................................................................................................3
TASK 2 PORTER’S FIVE FORCES FRAMEWORK AS A TOOL OF COMPETITOR
ANALYSIS......................................................................................................................................4
Porter’s five force Framework.....................................................................................................4
SWOT analysis............................................................................................................................6
Game theory.................................................................................................................................7
THE RATIONALE FOR ADOPTING A REVOLUTIONARY AS OPPOSED TO AN
EVOLUTIONARY APPROACH TO CHANGE...........................................................................8
Generic competitive strategies.....................................................................................................8
Blue ocean strategy....................................................................................................................10
Organization strategies...............................................................................................................10
Balance score card.....................................................................................................................11
THE CONCEPT OF STRATEGIC DRIFT AND HOW IT MIGHT BE AVOIDED..................11
THE CONTRIBUTION OF ADMINISTRATIVE MANAGEMENT TO IMPLEMENTING
STRATEGY IN RESPECT OF LEADING STRATEGIC CHANGE..........................................13
CONCLUSION..............................................................................................................................13

TABLE OF FIGURES
(Figure 1: Strategic management process)......................................................................................2
(Figure 2: Structure Conduct Performance Model).........................................................................3
(Figure 3: Porter's Five Force Framework).....................................................................................4
(Figure 4: SWOT analysis)..............................................................................................................6
(Figure 5: Game Theory Model)......................................................................................................7
(Figure 6: Generic Competitive Strategy Model)............................................................................8
(Figure 7: Balance Scorecard).......................................................................................................11

INTRODUCTION
Strategy is an action that is required to take for the purpose of organizational goals. It is a
general direction set with various components to accomplish desired actions of future. Its main
aim is to stagnate and collect all the organizational resources and lining up all for the
accomplishment of organizational objectives (Schuler and Jackson, 2005). It is significant as it
determines future course of action that helps the organization in long term sustainability. It is
created to take into account the probable behaviour of customers and competitors. Strategies
dealing with employees will predict the employee behaviour. The management is required to
have a deep and intense knowledge and understanding so that to take appropriate decisions and
this will also be helpful in achieving competitive environment (Crossan and et. al., 2011).
TASK 1 IMPORTANCE OF ACHIEVING STRATEGIC FIT
Strategies and its implementation are required as in a business for the purpose of
achieving organizational goals and objectives. With the help of effective strategies, business can
achieve the policy of differentiation by which it can create competitive edge over others.
Strategies can help the business to set a particular direction so that all the employees can follow
those aspects. With the help of strategies, business can achieve certain advantages such as:
 Customer retention (Graham, 2008)
 Effective utilization of resources
 Opportunities of diversification and expansion
Strategies help the business to set a desired direction and this is also assists in effective
decision making process. With the help of effective decision making process, business can
achieve competitive advantage as departments can make effective decisions regarding different
facets. There are so many kinds of strategies that can be put into use for resolving conflicts, for
effective leadership and for managing strategic aspects of a business. Companies are being
forced to compete for competitive advantage so that to sustain for long time at the marketplace
(Haines and Bandt, 2002).
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Strategic management process
(Figure 1: Strategic management process)
(Source: Henry, 2008)
In order to make strategic aspects more successful, it is requisite for the business to
implement it in a proper way. Strategic management process defines or assists the organization
to frame effective strategies for business purposes. It has basically four steps:
Environmental scanning: It is also known as economic analysis which is done to collect
the information of outer world. It helps the company to analyse external as well as internal
factors that influences business environment (Henry, 2008).
Formulation of strategy: Under this process best coarse of action is being determined for
the purpose of achieving organizational objective and organizational goals and it also facilitates
corporate and business function strategies.
Strategy implementation: The process implies making strategies or putting it into action.
It comprises of different aspects such as designing organizational structure, allocation of
resources, developing decision making process and management of human resources
(McDonald, 1996).
Strategy evaluation: Last but not the least; it is the step of evaluation of strategy. This
includes various activities such as root factors of current strategies, performance measurement,
and remedial actions. It facilitates suitability of the desired strategies that have been adopted by
organization (Lowenthal, 1994).
The general and competitive environment
Environment is the main factor that influences the work conditions of organization and
that may also lead alterations in the work processes. External environment considerably affects
the competitive environment of an organization as it consists of industry and markets in which it
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EnviromentalscanningStrategyformulationStrategyimplementationEvaluationandcontrol

has to compete. There are various competitors of baby care products in the external environment
that probably can affect global market (Nijssen and Frambach, 2000). As the industry fulfils
demand of around 4 million babies all along in a year and this thereby helps the company to
generate revenues of around $ 7 billion. The market can be segmented into varied parts of
because the demand for innovation in products has been increased. With the help of
technological advancements and greater marketing approaches, retailers have to widen the
market as demand is increasing at the market place due to huge increment in number of babies.
Consequently, there are many competitors such as Johnson & Johnson, Procter and Gamble,
Novartis that are providing several baby care products with several effective strategies for the
purpose of achieving market share and competitive advantage (Partington, 1996).
Structure conduct performance
(Figure 2: Structure Conduct Performance Model)
(Source: Partington, 1996)
Conduct performance model is a model which is being developed to predict the structure
of the market that help the company to determine firm’s conduct and employee performance.
The SCP model basically focuses on three steps i.e. at the initial steps it focuses on segregating
and segmenting the market on the basis of number of competitor’s present in the market. Moving
on to next level, it shows that this model is comprises of specific prices and of some output
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IndustryStructureNumberofcompetingfirmscostofentryandexistFirmConductStrategiesfirmspursuetoachievecompetitiveadvantagePerformnaceFirmlevelandsocietylevel

which is conduct by firm which is generally arises through market power (Power, 2004). This
also comprises of framing varied strategies so that to get competitive advantage that ensures the
opportunities of success. Finally at the last step, it defines the performance of the company that
suggest equilibrium prices of any of the company (RUSH, 2001). Consequently, it can be said
that in order to get high competitive advantage, it is required for baby care Products Company to
opt three major steps of structure conduct performance model. Initially it is required to analyse
the number of competitors that are prevailing in the market such as Johnson & Johnson, First cry
etc and this also facilitates the company to build effective and strong strategies so that to target
adults as well (Komoche, 2006). It is duty of an organization to produce quality products for the
kids because as it is their core target segment and keeping this in mind the product should be
mild and gentle. The company is required to set low cost at the initial stage as there are lots of
competitors in the market and the barrier to entry will be relatively high (Khandekar and Sharma,
2005).
Furthermore, the company is required to frame strategies so as to achieve competitive
advantage and also for the purpose of achieving position in the market. Strategies are required to
be designed in such a way that it can easily attract children and adult section. At the last step, the
firm is required to analyse the performance with focus on several factors like productivity and
efficiency level (Freeman and Ceriello, 2011).
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TASK 2 PORTER’S FIVE FORCES FRAMEWORK AS A TOOL OF
COMPETITOR ANALYSIS
Porter’s five force Framework
(Figure 3: Porter's Five Force Framework)
(Source: Komoche, 2006)
There are various tools that can be used to analyse external as well as internal
environment of a business. In order to achieve competitive advantage, it is quite essential for the
business to use porter’s five forces model as this will help in identifying the strategic
development of industries. This is the best appropriate tool that can help to identify the power
and current position of the business (Guest, 1997) Conservatively it is being looking out that
whether the new goods and service or business have that much of potential or not to provide
profitable organization. It falls under the five important factors that help in assessing the
competitive ower in a business situation, these are shared below:
Supplier power: In order to get high advantages from the business, it is required to have
efficient suppliers so that they may not switch over to another business. The business is required
to have powerful suppliers so as to make unique products that will help the company to get high
attention from the customers. If the supplier of a firm has a power to bargain then they will
definitely sell material to the firm at a higher price and they can squeeze industry profits (Best
Practice Vs. Best Fit Approach to Strategic Human Resource Management, 2013).
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Buyer power: At the other stage, businesses areca also required to give certain offers and
benefits to its customers so that they may not switch over to another industry. In order to create a
competitive edge over the competitors, business is required to identify its customer’s interest so
that to produce products as per their wishes (Torrington and et.al., 2008).
Competitive rivalry: The main competitors of my business is Johnson and Johnson that is
producing range of baby care products and that has targeted adult females for the purpose of
effective marketing. My business may face competition many competitors and if they offer better
and effective products then at that situation I will be facing high level of customer switchover
(Koning, 2007).
Threat of substitution: This has been identified that there are range of products for baby
care items and Johnson and Johnson has been providing best and appropriate products and along
with this, it also has some substitutes. All those substitutes are satisfying the needs and demands
of the customers and this is making weak my business aspects. The availability of substitutes
hinders the growth of the company (Functions of Human Resource Management, 2013).
Threat of new entry: There are various barriers that have been identified by the industry
because they are having investment cost and that can be used while establishing new firms. Legal
restriction in the entry of firm in a new or existing market can also act as a barrier to new
entrants as they have to meet good standard for kid’s products. Hence, in order to get customer
loyalty, it is essential to have strong brand image. In order to differentiate the products in the
markets, it is required to have strong brand recognition and unique selling pricing (Strategic
management, 2009).
With the help of such analysis, my company would be able to analyze the strengths and
weaknesses of its competitors within the market. This is also helpful in analyzing the mindset
and views of the customers regarding the services. This also assists in identifying the competitive
ability of the business (Suitability Feasibility Acceptability (SFA) analysis, 2012).
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SWOT analysis
(Figure 4: SWOT analysis)
(Source: Khandekar and Sharma, 2005)
To analyze the strength, weakness, opportunity and threat of any or particular
organization, it is required to make structured planning for the process of SWOT analysis. It is a
significant tool that can help the company to make suitable decisions at different levels. With the
help of strengths and weaknesses, the internal environment of an organization can be evaluated
while on the other side opportunity and threat in this analysis covers under the external
environment of an organization (Supply Chain Performance: Achieving Strategic Fit and Scope,
2011).
The major strengths that a company could make are that it can design effective and
efficient strategies so that companies can successfully differentiate its products in the market for
the purpose of targeting existing customers. Weaknesses are those factors that are hinder the
performance of workforce and management. One of the major weakness funds in this case is to
reduce the price and lack of efficient worker (Vance and et.al, 2010). Opportunity is that area
which provides a vacant position that has to be fulfilled but not yet filled. Subsequently, the
opportunities in the present case can help the company to increase market share through product
development and innovations and this will also assist in widening and expanding the operations
all around the world. Threat is the hindrances that create a terror to an organization and also act
as a barrier for them in their future growth. Major threat of current organization is to have a large
number of competitors in the prevailing market. (The General Environment, 2012).
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Game theory
(Figure 5: Game Theory Model)
(Source: Freeman and Ceriello, 2011)
Game theory being a part of strategic decision making theory comprises of inter-reliant
issues and problems. It includes number of participants and each of them has individual
functions related to common system. The problems and issues are refereed as players of games
and participants as it arises from competitive scenarios. The theory has basically some
assumptions such as:
 Decision maker have large number of choice to select from list
 Plays that are being available to the player shows a perfect combination and well defined
the end state that helps in terminate the game (Characteristics of an effective strategic
control system, 2012).
 Pay off for each and every specific player is associated with each end state
 Each decision maker has perfect knowledge of the game and of his opposition
 All decision makers are rational (Elements of Strategic Management, 2011)
In the game theory, it is being explained that it deals with number of issues in which very
player highly depends on the factor that what other player are doing. In performing the game
theory, it require two players which participate to take strong decision that is being required to
take The two basic situations that come under it are compromise and don’t compromise (Jeffs,
2008). In this present study, company demands to prepare comparison chart on the ground of
situation from its competitors and at the first matrix, both the parties need to compromise or
cooperate with each other. The second matrix indicates that compromise can be done by any one
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