QUESTION 1 1.1 Strategic management is based around an organization's clear understanding of its mission; its vision for where it wants to be in the future; and the values that will guide its actions. The process requires a commitment to strategic planning, a subset of business management that involves an organization's ability to set both short- and long-term goals. Strategic planning also includes the planning of strategic decisions, activities andresource allocationneeded to achieve those goals. Having a defined process for managing an institution's strategies will help organizations make logical decisions and develop new goals quickly in order to keep pace with evolving technology, market and business conditions. Strategic management can, thus, help an organization gain competitive advantage, improve market share and plan for its future. 1.2 A broad differentiation strategy consists of building a brand or business that is different in some way from its competition. It is applied to the industry and will appeal to a vast range of consumers. A business will usually accomplish this by analyzing its strengths and weaknesses, the needs of its customers and the overall value it can provide. The most appealing approaches to differentiation are difficult for competitors to imitate. It yields a longer-lasting more profitable competitive capacity and reliability, comprehensive customer service and unique competitive capability. Such differentiating attribute tend to be difficult for rival to copy or offset profitability, and buyers widely perceive them as having value. The most important by- product of a differentiation strategy is customer retention and loyalty which means customers are locked in and therefore safe from rival competitive activities. 1.3 Expansion Strategy TheExpansion Strategyis adopted by an organization when it attempts to achieve a high growth as compared to its past achievements. In other words, when a firm aims to grow considerably by broadening the scope of one of its business operations in the perspective of customer groups, customer functions and technology alternatives, either individually or jointly, then it follows the Expansion Strategy. The reasons for the expansion could be survival, higher profits, increased prestige, economies of scale, larger market share or social benefits Stability Strategy TheStability Strategyis adopted when the organization attempts to maintain its current position and focuses only on the incremental improvement by merely changing one or more of its business operations in the perspective of customer groups, customer functions and technology alternatives, either individually or collectively.
It is generally adopted by the firms that are risk averse, usually the small scale businesses or if the market conditions are not favourable, and the firm is satisfied with its performance, then it will not make any significant changes in its business operations. Retrenchment Strategy TheRetrenchment Strategyis adopted when an organization aims at reducing its one or more business operations with the view to cut expenses and reach to a more stable financial position. In other words, the strategy followed, when a firm decides to eliminate its activities through a considerable reduction in its business operations, in the perspective of customer groups, customer functions and technology alternatives, either individually or collectively is called as Retrenchment Strategy Combination Strategy TheCombination Strategymeans making the use of other grand strategies (stability, expansion or retrenchment) simultaneously. Simply, the combination of any grand strategy used by an organization in different businesses at the same time or in the same business at different times with an aim to improve its efficiency is called as a combination strategy. Such strategy is followed when an organization is large and complex and consists of several businesses that lie in different industries, serving different purposes. 1.4 If a new product or service from another industry or supplier can be used to perform similar functions as a currently used product or service another industry or supplier, then this may drive the current supplier out of business especially if the substitute product is cheaper and/or easier to use. A practical example is how mobile phones have reduced the need to landlines thereby forcing Telkom to look to other avenues for profit as opposed to relying on land lines. QUESTION 2 2.1 1.Define mission and vision
Begin by articulating the organization's vision for the future. Ask, "What would success look like in five years?"Create a mission statementdescribing organizational values and how you intend to reach the vision. What values inform and determine mission, vision, and purpose? Purpose-driven strategic goals articulate the "why" of what the corporation is doing. It connects the vision statement to specific objectives, drawing a line between the larger goals and the work that teams and individuals do. 2. Conduct a comprehensive assessment This stage includes identifying an organization's strategic position. Gathering data from internal and external environments and respective stakeholders takes place at this time. Involving employees and customers in the research. The task is to gather market data through research. One of the most critical components of this stage is a comprehensiveSWOT analysisthat involves gathering people and bringing perspectives from all stakeholders to determine: Strengths, Weaknesses, Opportunities and Threats. 3. Forecast Considering the factors above,determine the company's value through financial forecasting. While almost certainly to become a moving target influenced by the five forces, a forecast can assign initial anticipated measurable results expected in the plan or ROI: profits/cost of investment. 4. Set the organizational direction of the business The above research and assessment will help an organization to set goals and priorities. Too often an organization's strategic plan is too broad and over-ambitious. Planners need to ask," What kind of impact are we seeking to have, and in what time frame?" They need to drill down to objectives that will have the most impact. 5. Create strategic objectives This next phase of operational planning consists of creating strategic objectives and initiatives; the following may be considered during this stage: -Financial: Such considerations as growing shareholder value, increasing revenue, managing cost, profitability, or financial stability inform strategic initiatives. -Customer-satisfaction: Objectives can be determined by identifying targets related to one or some of the following: value for the cost, best service, increased market share, or providing customers with solutions. -Internal processessuch as operational processes and efficiencies, investment in innovation, investment in total quality andperformance management, cost reduction, improvement of workplace safety, or streamlining processes. -Learning and growth: Organizations must ask: Are initiatives in place in terms of human capital and learning and growth to sustain change? Objectives may include
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