Strategic management is helpful for the organization to make a decision in the context of the growth of the company. Strategic management gives entire direction to a company and includes specifying the objectives of the company, improving the policies of the company and create a significant plan in order to attain the objectives. It entails various frameworks and concepts that aid in strategic decision making with respect to competitive dynamics and complex environments. This report will describe the two concepts of strategic management and their impact on the decision-making process of the businesses.
SWOT analysis is the concept of the strategic management that helps in elaborating the strength, weaknesses, opportunities, and threats of the company which plays a significant role in making the decision for the growth of the company. SWOT is an acronym that facilitates business to bring more information about the company in the form of Strength, weaknesses, opportunities, and threats (Haile and Krupka,2016). It is necessary for the company to have knowledge about their weaknesses and threats so that these can be overcome with the opportunities and strength of the company. It is considered as the useful tool for strategic planning as well as brainstorming and it can be more effective if a business conduct it by keeping the value of the objectives in the mind. It helps business to take their decisions such as respond to new trends, implement new technology, get benefit of a new business opportunity and deal with amendments to the operation of the competitors (Elmes. and Barry, 2017).
It is the concept of the strategic management that facilitates to recognize the areas of the business that are performing well. These areas can be considered as the critical success factors that give competitive advantages to the business (Rothaermel, 2015). Weaknesses are another factor of this concept that helps to identify the weaknesses of the business which can be minimized before becoming a major problem. Along with that, it is the concept that helps to identify the opportunities which can be taken by the business to improve the growth of the company. Threats are known as an external factor that put complex situation for the business like the involvement of new competitor, amendments in the market and government policy (Grant, 2016).
In the context of the decision-making process of the business and the impact of these concepts on them are elaborated below with taking practical implication in which examples of companies will be demonstrated below:
It has been analyzed that the strengths of the company are major that is why it is required for the company to maintain them for the competitive advantages. Strength is a positive attribute which can be controlled by the management of the company in order to gain support (Rauch, et. al., 2016). There is an example of Coles Company that makes SWOT Analysis so that they can improve the internal position of the company.
It is an example of SWOT analysis which is made on the Coles Australia. The above-mentioned image describes that the company has major three strengths market share, customer loyalty and diversification and because of these strengths, the company is able to attain the competitive advantages and increased revenue. It has been found that to maintain the strength of the company; Coles decided to invest in energy efficiency projects in which the company has invested an excess of $15 million.
It is required for the business to conduct a SWOT analysis to be a realistic as it helps to eliminate or reduce the impact of them over the business decision making. By considering the above-mentioned image, it has been found that Coles Company has weaknesses as well such as down-down campaign and prolonged stagnant (Hill, Jones and Schilling, 2014). These are weaknesses of the company that impact the revenues of the company as comparison of their competitors. It can be eliminated with the help of focusing on different strategies to attract customers.
SWOT Analysis will be helpful in attaining the objectives of the company by providing information to the company about their opportunities (Queensland Government, 2018). In case of the business does not have the capability to grab an opportunity, it would lead the business into the adverse situation. As per above-mentioned image, it has been found that the company has the opportunity of the production in Australia, advertisement, and potential market. With the help of this framework, the company has taken various steps in which the company has opened an 800th store for the purpose of increasing employment; provide traveling opportunities to the employees so that they can retain them.
Threats are considered as the external factors and the concept of SWOT will helps business to identify them in order to counteract them by taking decisions. It has been found that the threats of Coles Company are competitions, change culture and food import. The management of the company has identified these threats and take appropriate actions so that they can eliminate them in an efficient manner. They start to provide training for eliminating the culture issues, implement a cost leadership strategy for beating the competition and start to gain knowledge about laws of different countries so that the import policy could not get affected.
Pestle Analysis is the concept of the strategic management that helps to attain an effective knowledge about the country in the term of politics, economic, social, technological, legal and environmental. It is an external analysis that facilitates in attaining the objective soft eh company by considering this impact which may influence the business decision making of the company directly or indirectly. It has been found that the Pest analysis is providing information about the external environment. It is the concept that helps business to understand the law, physical environment and demographic factors of other country in case a business is going to expand its business in other foreign country. It is the procedure by which the company can take business decisions after evaluating the condition of other country in an effective manner so that the company protects itself in facing issues or obstacles at the time of expanding their business.
It is required for the business to analyze the condition of the external factors as it can impact the entire business. PESTLE is the acronym that entails six factors of Pestle, Economic, Social, Technological, Legal and Environmental. There is an example of Wesfarmers that have more than 800 stores globally. It is the company that is famous for its services and varieties of products and if this company wants to expand its business in UAE. It is required for the business to analyze various factors related to the country while entering in UAE.
The political factors have significant influence on the decision making process in which each of the 7 Emirates has their own governmental organization. It has been found that there is a healthy trade relation in UAE. These kinds of information help company to take decisions in the context of the company
It has been analyzed that there are some factors that influence the economic factors of the country such as there is a remarkably upper level of GDP per capita and there is a low unemployment rate. Along with that it is the country that has the highest amounts of FDI (Foreign Direct Investment). Wesfarmers could be benefitted with the help of this information (Abushova, Burova and Suloeva, 2016).
The role of the social factors in the business decision making process is huge as it helps to make decision after analysing the condition of socially of country. it has been found that the globalization is slowly providing in a mix of different cultures and the religion play a significant role in UAE. After considering these factors, the company would be able to attain the competitive advantages (Rastogi and Trivedi, 2016).
It has been analyzed that the population of UAE is very advanced and tech-savvy which permits business across UAE to leverage technology. This factor would be helpful for the company to make a decision in the context of the business after analyzing the technological factor.
The legal structure of the company is very strict as it is required for the company to follow all legal formalities at the time of expanding the business in UAE.
The environment of UAE is dry which can affect many things of the business along with the productivity of the employees. it is necessary for the company to consider all factors of environmental as it can affect the business (Ruziwa, 2015).
Conclusion
It can be concluded from above discussion that the role of the strategic management in decision making process is huge. The concepts of strategic management are many but two of them such as SWOT and PESTLE have been elaborated in order to bring better understanding about the impact of those factors in business decision making process.
References
Abushova, E., Burova, E. and Suloeva, S., 2016. Strategic analysis in telecommunication project management system. In Internet of Things, Smart Spaces, and Next Generation Networks and Systems (pp. 76-84). Springer, Cham.
Elmes, M. and Barry, D., 2017. Strategy retold: Toward a narrative view of strategic discourse. In The Aesthetic Turn in Management (pp. 39-62). Routledge.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Haile, M. and Krupka, J., 2016. Fuzzy evaluation of SWOT analysis. International Journal of Supply Chain Management, 5(3), pp.172-179.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Queensland Government, 2018. Uses of SWOT Analysis. Available [online] https://www.business.qld.gov.au/starting-business/planning/market-customer-research/swot-analysis/uses. Accessed on 31 Aug 2018.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external risks in construction projects. International Research Journal of Engineering and Technology (IRJET), 3(1), pp.384-388.
Rauch, P., Wolfsmayr, U.J., Borz, S.A., Triplat, M., Krajnc, N., Kolck, M., Oberwimmer, R., Ketikidis, C., Vasiljevic, A., Stauder, M. and Mühlberg, C., 2015. SWOT analysis and strategy development for forest fuel supply chains in South East Europe. Forest Policy and Economics, 61, pp.87-94.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Ruziwa, M. 2015. Pestle analysis vital for strategic decision making. Available [online] https://www.herald.co.zw/pestle-analysis-vital-for-strategic-decision-making/. Accessed on 31 Aug 2018.
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