Strategic management is a particular course of action that is meant to achieve a corporate goal. The Strategic Management Process defines the goals and objectives for a business, it creates the action plan so that a company can reach them and then it follows the plan. There are nine steps in Strategic Management Process which managers need to follow; which are defined as under: Identify the Organization’s Current Mission, Objectives and Strategies: It is important to identify the goals and objectives of the company. It defines the present purpose of the organization as a mission and the strategies currently being followed. The mission statement becomes the identification of an organization so it is very much necessary to identify it. Analyze the Environment: It is a process of monitoring the organizational environment to identify competitor’s actions and to confirm if it is suitable to let the firm goes to already set Continue reading
Business Strategies
Financial Problems after Mergers and Consolidation
After merger and consolidation the companies face a number of financial problems. The liquidity of the companies has to be established afresh. The merging and consolidating companies pursue their own financial policies when they are working independently. A number of adjustments are required to be made in financial planning and policies so that consolidated efforts may enable to improve short term and long term finances of the companies. Some of the financial problems of merging and consolidating companies are discussed as follow: Cash management. The Liquidity Problem is the usual problem faced by acquiring companies. Before merger and consolidation, the companies had their own method of payments, cash behavior pattern and arrangements with financial institutions. The cash pattern will have to be adjusted according to the present needs of the business. Credit policy. The credit policies of the companies are unified so that same term and conditions may be applied Continue reading
Advantages and Disadvantages of having a Mission Statement
Mission statement is a summary statement of a company’s or organization’s purpose about what it wants to accomplish in the larger environment. Mission statement is playing an important role with the overall strategic planning of an organization. All of the strategic planning of an organization should base on the mission of an organization that had been set. Strategic planning include all the long-range plans, strategic plans and also annual plans which include decision making about the human resource management, production and operation, finance and it is also concerned about the marketing planning. A well-defined mission statement is very important to guide people in the organization, clearly defines who the customer is and what services and products the businesses are intended to provide. A good mission statement should contain some criteria. First, a good mission statement should be market-oriented. A market-oriented mission statement focuses on satisfying customer’s needs. A mission statement Continue reading
Porter’s Five Forces and Three Generic Strategies
The long development of Porter’s Five Forces Analysis has brought to the fact that those forces become the determinants of the industry’s competition. These five forces are treat of new entry, rivalry among existing firms, treat from substitute products, bargaining power of buyers, and bargaining power of suppliers. Furthermore, five forces analysis is treated by the organization to measure the level of competition, besides that, it is used as a strong first step in understanding how one industry compares to another and also to determine industry profitability because they influence the prices, costs, and required investment of firm in an industry. In order to be competitive enough, a normal company that seeks profitability would have to understand how they work in its industry and how they affect the company in its particular situation. Therefore, Three Generic Strategies were implemented to establish a strategic agenda for dealing with these five forces. Continue reading
Case Study: Business Strategy Analysis of Wal-Mart
Sam Walton, a leader with an innovative vision, started his own company and made it into the leader in discount retailing that it is today. Through his savvy, and sometimes unusual, business practices, he and his associates led the company forward for thirty years. Today, four years after his death, the company is still growing steadily. Wal-Mart executives continue to rely on many of the traditional goals and philosophies that Sam’s legacy left behind, while simultaneously keeping one step ahead of the ever-changing technology and methods of today’s fast-paced business environment. The organization has faced, and is still facing, a significant amount of controversy over several different issues; however, none of these have done much more than scrape the exterior of this gigantic operation. The future also looks bright for Wal-Mart, especially if it is able to strike a comfortable balance between increasing its profits and recognizing its social and Continue reading
Case Study: Lenovo’s “PC Plus” Strategy
Lenovo is the largest personal computers (PC) maker in the world as ranked by IDC, but global PC market is a hyper-competitive market with tough competition from competitors like HP, DELL and Acer. The industry also suffers from low profit margins too where Lenovo’s profit margin is around 2% only compared to Apple’s profit margin of 25-30%. Also the PC market itself is declining as consumers are buying more tablets and smartphones which is affecting the sales of desktop computers and laptops. All these factors have pushed Lenovo to adopt a new business strategy called as “PC Plus” Strategy, which covers terminal products like PCs, smart phones, table PCs and smart TVs. Lenovo’s acquisition of Motorola Mobility’s handset and tablet business from Google, following its acquisition of IBM’s x86 server business, puts the company exactly where it wants to be: at the forefront of the computing and smart devices businesses. Continue reading