Strategic management is derived from word strategies, which means plans to achieve in future as organization goals and objectives (Bryson, 2018). These goals are designed and implemented for future benefits. Therefore, for these strategies to be successfully developed, implemented and functioning towards the achievement of the target goal, they need to be managed, therefore arriving at strategic management. Strategic management involves managing the organization resources available towards achieving the set goals and objectives within the organization. To have effective and strong strategic management it involves other factors surrounding the process. These factors include identifying the strategy, analyzing and evaluating, and describing strategic management which can be carried successfully and have better performance of the organization through achieving its goal and objective. Using strategic management the organization is able to define the vision, mission, and value of the organization (Snihur, Thomas and Burgelman, 2018.). Also, through this management will enable the organization to maximize its strengths and reduce the weakness over the market competitors.
For any organization to have heavy and durable competitive edges in the market, it requires strong and perfect strategic management. Having better strategies and well managed compared to that of other organization, this will boost the performance of the organization activities, therefore, becoming a competitive edge in the market and increasing profitability level in the market. For an organization to develop business strategies, is required to follow and assess some process which will help in achieving the development of viable strategies (Kouamé and Langley, 2018.). These processes are known as the strategic planning process, includes:
Initial assessment. This is the first step of the strategic planning process. In this phase, the management team is required to clarify the vision of the organization. This is done by identifying the organization’s vision and mission statement and the values of the organization. The three key point to be addressed here is; describes the short-term and long-term goals and objective the organization is aiming to achieve in future. Second, the plans and process of accomplishing these identified objectives and goals and finally, each staff and member in the organization should be assigned a task to handle in developing and implementing the strategies (Abdel-Basset, Mohamed and Smarandache, 2018). The organization must keep in mind that all these identified goals and objective must be realistic according to the organization’s vision and mission. The second step is situation analysis.
Situation analysis. This steps involves gathering and analyzing the information about the environment of the organization. Internal and external environment both are identified and analyzed keenly by the management undertaking this task of strategies management. Several tools are used to gather and analyze the environment of the organization. One of the tools is a SWOT analysis tool. This is used to identify and analyze both the internal and external environment which is controllable by the management. Internally, the Strengths and Weaknesses of the organization are analyzed compared to that of the competitors in the local and global markets (Jiang, Mao, and Tan, 2018). Opportunities in the market are required to be utilized by the organization, therefore, the team should be keen in identifying any existing opportunity in the market. In identifying these opportunities the management should not forget to identify and analyze any existing Threats which can be against the objectives of the organization (Vaiarelli, Cimadomo, and Ubaldi, 2018).
PESTEL framework tool also is useful in studying and evaluating the environment. This tool assists the management to study the external environment which is beyond the organization control. PESTEL Analysis (Politic, Economic, Social, Technology, and Legal) are factors which may influence the organization strategies positively or negatively, inside the organization and outside in the market with minimal or no power and control over them (Pan, Chen, and Zhan, 2018).
In situation analysis, the organization should not forget to identify and analyze the competitors which are surrounding the organization in the market. After the team is through with initial assessment and situation analysis, now it will handle the step of strategy formulation.
Strategy formulation. This is the third step in developing organizational strategies. This is the main part of this process and the development of long-term objectives and goals is done, since, this will help to have a good competitive position in the market. Strategy formulation they act as guidelines and directions of the organization in achieving the mission and vision statement (Starr, Ganco and Campbell, 2018). These strategies are formulated in three stages which are:
Business level strategy. This involves diving the organization into small business units and select a single strategy which will suit the single product in the market. This helps the organization to start formulating these strategies from the low and single stage while advancing to more and complicated strategies. The other level is a corporate strategy. This involves the executive top management strategies formulation. This will help to have integrated, intensive, diversify and defensive strategies in the organization. These strategies help the organization to find out the competitors means of dealing with it, either through having diversified strategies or merge with it in the market. The third and last level is the global strategy. In formulating these strategies the management should identify the market which the strategies will be directed. For example, where the new market and the means to enter is, grow and survive in it.
After the strategic formulation, the management will choose the alternative strategies which will be used according to the organization’s goals and objectives. Choosing the best alternative will depend on the situational analysis result and the vision and mission statement of the organization. The following step is strategy implementation.
Strategy Implementation. This is the stage of implementing the best-selected strategy in the phase of the strategy formulation. The best competitive strategy is implemented in this stage. In this stage, managerial skills and techniques will be used rather than technical and analysis skills (Ma and Seidl, 2018). Communication is very important which is required to be participated in this stage to ensure successful implementation of the strategies. In implementing these strategies most of the organization activities will be affected partially or fully. The organization structure and resources will be influenced and directed in a new which will accommodate the new strategies in the organization. Policies and way of doing things in finance, marketing, and other functional departments will be affected before adapting to the new strategies. Therefore, is like the organization and the entire stakeholder of the organization be ready to face the changes and accept them if the need positive influence of the strategies in the organization. After the implementation of strategies, the next step is to control them.
Strategy control and monitoring. Controlling and monitoring is the final stage in strategic development and implementation. This is an important phase since will protect and maintain all effort used from the first step of initial assessment. Due to the influence of external and internal factors of the organization, strategies implemented they need strong and serious control to have positive impacts on the organization. Using tips of this phase the implemented strategies be undergoing continuous revision and amendment where required as the work (Haynes, 2018).
Time and resource are required to have success monitoring and control. Funding for the strategies to run successfully, the management is required to assign duties and responsibilities to the staffs who will perform this task of controlling and monitoring. If they perform their tasks with serious concern, the organization will enjoy the fruits of successful and effective development and implementation of the strategies. This will facilitate a smooth and easy way to achieve the organization’s goals and objectives. The following figure summarizes the process of strategic management (Kemunto and Kagiri, 2018).
Source: Haynes, 2018.
The organization is required to evaluate further the development and implemented strategies in the organization. Different models and tools are used to analyses the organization strategies in both external and internal environment. Several tools can be used to determine the organizational strategies. They include SWOT analysis tool, PESTEL analysis tool, Porter’s five forces, four corner’s analysis, value chain analysis and finally and not least the early warning systems. In this contest, only a few tools will discussed and used by the organization in analyzing the strategies (Nurmi and Niemelä, 2018).
SWOT Analysis tool. This is the most used tool in analyzing organization strategies. This tool is used to understand the organization Strengths, Weakness, Opportunity, and Threats in a more advanced way. This tool is used to analyze both internal and external parts of the organization. The Strengths and weaknesses are internally analyzed while opportunities and threats are externally analyzed (Ervural, Zaim and Delen, 2018). The internal environment involves management, employees and the immediate stakeholders of the organization. The parties always influence the strategies of the organization at greater percentage since are the main actor in the organization. Using SWOT analysis, the strength of the organization strategies will focus on the following question which helps the better understanding of the organization strength towards the formulated strategies. What is the unique part of the developed strategies comparing with the competitor’s strategy? Which parts does the organization do better than others in the market? What might be the strongest competitive advantage of the organization in the market? And finally, how does the customers and competitors in the market view the organization strengths? After analyzing and getting the answer of these question the organization will be able to know whether the developed strategies will accommodate the effectively or not.
After identifying the strength of strategies in the organization, what follows is to identify the weak part of the strategies. The weakness of the organization strategies is possible to be used by different parties and the competitors to reduce the performance of the organization. Most of the weakness is identified by comparing what do other organizations do better than yours in the market? What values and altitude the organization is lacking and it makes other organization to grow and survive in the marketplace? The organization is advised to formulate strategies which have less weakness compared to the number strengths since if weakness exceeds the strengths, the organization goals and objectives will be hard to be achieved successfully (Liu and Walsh, 2018).
The organization using its strengths should be ready to exploit the new and existing opportunities in the organization and in the market. Most of the organization strategies should be aiming in utilizing any available chances in the market using strategies strength compared to that of competitors. Effective implantation of strategies will facilitate and make the organization fell strong in filling the market gaps in the market (Singh, Kumar, Gupta and Madaan, 2018). This will make the organization to be famous and earn more competitive edges in the market due to the perfect and strong strategies formulated by the management. When the organization dealing with these gaps should be aware of the threats in the marketplace.
Threats will hinder the strategies from accomplishing its objectives if not carefully dealt with. These threats are external factors from outside the organization, they may include political factors, social-cultural factors and technological trends in the market. These factors may influence the implemented strategies negatively thus making the hard to accomplish the goals in utilizing the market opportunities. Another issue the management should deal with it is the stiff competition in the market since this may discourage the formulated strategies from working as desired from the start (Leiber, Stensaker and Harvey, 2018). Use of SWOT analysis tool is very simple and clear in analyzing the organization strategies formulation and implementation, and the function inside and the organization.
Source: Leiber, Stensaker, and Harvey (2018).
This model of SWOT analysis and strategies development and implementation can be applied in the real life organization. ALDI Company is the organization which will be under consideration of the usage of SWOT analysis. ALDI Company is a supermarket business in Australia but is established mainly from Germany. The business is supplying groceries in the market at low cost comparing to the others competitors in the market. In entering Australia market the business required strong strategies to penetrate and conger the existing competitors like Countdown supermarket, New World supermarket and Fresh Choice supermarkets which were trending business in the supermarket in Australia market. Using the strategies formulated for ALDI Company to enter in the new market, we will apply the SWOT analysis tool in analyzing the Strength, Weakness, Opportunity, and Threat of the business in the market.
Strength. The ALDI business has used SWOT analysis to identify the strongest part of the formulated strategies and implemented it in the market. One of the strength is on pricing strategies. The supermarket has identified the price of commodities to be the challenge to the customers, therefore, setting low prices to the product which are reasonable and comfortable for the consumer’s pocket. This pricing strategy was supported by good customer care support, therefore, enabling the business to be successful in the new market having excellent performed (Gure and Karugu, 2018).
The ALDI supermarket also had some weakness in its strategies. The most weakness which was identified is the poor influence of the high-income class group. The strategies were only focusing on the low and medium income group in the market. This has discouraged customers of high-income class from purchasing in ALDI supermarket.
The Australian market had an opportunity of proving low-cost products in the market. The ALDI supermarket strategies were aiming to utilize that gap in the market. The business has used its strength to penetrate and filled this gap by proving new and quality products in the market. These products have attracted high income for the organization and thus enabled to expand and grow progressively in the market (López-Lambas, 2018).
The business still faced threat in the market. The main threat was from the competitors and government regulations. The business was not able to handle market competition in a perfect way in eradicating it completely. The government is imposing a high tax on the organization income which discourages the ALDI supermarket in its performance (Ansoff, Kipley, Lewis and Ansoff, 2018).
ALDI supermarket has survived in the market only due to the strong formulated strategies and implemented successfully. These strategies have helped the organization to achieve its objectives and goals in entering the Australian market.
References
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