Discuss about the Strategic Brand Management for Building Measuring.
Strategic management can be defined as the process that involves development of the strategy that is required by the organization to function and to achieve success. These strategies have been made by the organization after analyzing the environment of the company internally and externally along with the analysis of the resources available for the organization. Strategic management practices are used by the organization in order to analyze the environment of the company so as to provide a direction for further functioning of the firm (Aaker, 2008). It is not a static process but is the ongoing process as it requires evaluating the strategies implemented in the organization timely so that corrective action can be implemented at right time. There are many theories and model given by some of the theories related to the strategic management of the organization. Some of the theories are resource based theory of strategic management, knowledge based theory of strategic management and network based theory of strategic management.
Resource based theory suggests that any organization have lost of resources and capabilities. These resources involve physical, human, intangible and tangible assets (Ansoff, 2007). According to this theory, the firm should have the potential to convert these resources and capabilities of the organization into strategic advantage for the firm so that it can function accordingly. The firm should use its resources optimally so that the output can be generated at the lowest of input.
This is the extension of the resource based view of the strategic management function. This suggests that the firm consists of knowledge that issue to imply the strategy formulated according to the capability and the resources of the firm (Ansoff, 2014). Knowledge is considered as the basic resource for the firm and is also act as the basis for achieving competitive advantage.
According to this view, the organization functions with the help of the connection of different elements such as suppliers, customers, other relevant institutions, etc. Connectivity among these elements provides the framework for the organization to perform and function. Diversification in these connections signifies the strength of the firm.
The strategic management initiates with the analysis of the environment of the firm that supports the organization to frame its strategies for its functioning (Arli, Dylke, Burgess, Campus & Soldo, 2013). The mission of the company suggests that the company wants to provide thee customers with the low price and good quality products. The company wants to give great experience of shopping to its customers. In order to complete this mission, the company needs to analyses its environment, resource, capabilities and then has to make the strategies accordingly.
As per the resource based view of strategic management the resources ad capabilities of Woolworth’s is being analyzed. In terms of resources, the company has very effective supply chain. This can be analyzed by observing the distribution network and the logistics of the company. It has been identified that the produce of the company directly reaches to its distribution center at international or national sites (Armstrong & Taylor, 2014). At these distribution sites, the quality of the produce is certified and then the produce is send directly to the stores. This simple process of distribution helps the company to reduce its operating cost by $2.5 million. In addition to it, it has also been observed that all the trucks and the distribution center are owned by the company itself and thus this also helps the company to distribute the produce according to their process. And there is no issues of workers strike frequently as the workers are in control of the company only (Dos Santos, Svensson & Padin, 2013). The combination of tangible and intangible assets of the economy such as the supplier relation and the technological capability of the firm supports it to compete with the competitors and it is a cost saving approach by the company. The other competitors cannot even imitate the technological strategies of the company. They also have high brand reputation and the effective top management. Brand reputation of the company has built by many efforts of positioning itself as the brand of fresh products. This is possible only because of the distribution network bad the quality of products that company is catering to the customers. The marketing team of the company work effectively to attract the customers with the slogan such as “fresh food people”. These strategies support the company to develop the image and positioned itself among the customers as the fresh food brand. The benefits that the company gets from the reputation of the brand cannot be provided by nay of the other resources (Eden & Ackermann, 2013). This is because brand reputation of the company made the customers base and loyalty of the customers towards the brand. The top management of the company acts as a great support for strategic management. Top management of the company is responsible for making strategies for the company operations. Thus, it is very important for any company to have an intelligent top management team so that they can take wise decisions. Even in the time of high recession and economic downturn, the company like Woolworth is standing in the market with grace because of the company’s top management’s economic intelligence(FitzRoy, Hulbert, Ghobadian & O’Shannassy, 2012).
The connection of the company can be analyzed by the help of PORTER’s five forces analysis. PORTER’s five forces is another approach or concept of strategic management that describes the industrial analysis of the company. It is the model that relates to the strategic management since years. The analysis of the industry by this model helps to determine the market structure and the industry conduct that helps in identifying the company’s performance level in the industry. This model explains the company’s bargaining power and the relation with the customers, competitors and the suppliers. As per the analysis, it has been analyzed that the bargaining power of the supplier in this case is low because there are considerable number of suppliers available in the market (Freeman, 2010).Another reason for low bargaining power of the suppliers is because Woolworth and Coles have occupied around 80% of the total market share in the industry and thus suppliers do not have many choices of competitive players to deal with. On the other hand, the customers of the company have high bargaining power because there are many options available for the customers and the switching cost is very low (Sands & Ferraro, 2010). Interference of government by suppressing the increasing market share strategies by the big players and allowing the entry of new players has somehow shifted the bargaining power in the hands of the customers. The threat from the new brands is low because of the high capital investment of the company. Any of the company who wants to enter into the industry of retail supermarket have to invest a large capital initially and this act as the barrier for many new entrants to enter the industry. In terms of substitutes also, the firm is facing high threat because substitutes are also available. The company not only faces the threat from the supermarkets but other convenience stores also act as substitute for Woolworths. Rivalry is at the highest rate in supermarket industry of Australia the main competitor for the company is Coles. The above discussion summarizes the external environment of the company.
The third strategic management concept is the value chain analysis of the company. Value chain analysis of the company helps in determining the activities that add value to the processes of the company. This helps in determining the value of the activities so that the activities that are not adding any value can be eliminated from the process (Hill Jones & Schilling, 2014). This analysis supports the company to form its strategies according to the value added activities. The main function that creates value for Woolworths are in bound logistics, operation s and marketing and sales. As discussed that Woolworth is company that is into retail industry and do not product its own products. For having control over the market, the company owns its distribution network so that delivery can be done safely and precisely. In the distribution network of the firm, there are two main functions that are, logistics and procurement (Hitt, Ireland & Hoskisson, 2012). The strategy of certification and practicing Quality audit at regular interval of time supports the company to have effective procurement process. In terms of logistics, the owning of trucks and the distribution network is the strategy of the company to lower the cost of operations and chances of delivery failure. Another major activity is operations that involve quality assessment and inventory management (Williams, 2009). There is a standard quality assessment process is used by the company. According to this process, from the time the products reach the stores till the time they are being displayed the assessment team regularly keeps a check on the products quality. Forecasting programs is also used by the company to forecast the future changes in the demand of the products; this helps the company to make the changes according to the forecast. In context of marketing and sales, there are two types of activities. The first one is related to the in store promotions and second one is related to the organizational dynamism. In store promotion is done with several strategies such as selling the products on reduced prices, sales catalogues are used to promote the discounted items (Hubbard, Rice & Galvin, 2014). Weekly special discounts are being offered to the customers. All these activities are for short term boosting of the sales. For long term boosting the company has the capability of formulating the strategies according to the change in the environment. The company constant does analysis of its market and the environment along with customer’s needs that helps the company to come up with the strategies to align the activities of the organization with the charges (Jeyarathmm, 2008).
In accordance with the mission statement of the company, it wants to serve the customers with the fresh and quality products along with the great shopping experience. The main of the company now is to increase its sales to AUD$1 million by the end of 2020. The company is following some of the strategies to achieve this objective.
The first strategy of the company is related to the extension of the leadership in the areas of food and liquor. For this, the company has made efforts in re-establishing the marketing campaign of “fresh food people”. This is done in order to boost up the business growth and to acquire more market share in Australia (Hult, Ketchen & Arrfelt, 2007). The concentration of the company in order to achieve this objective is on increasing the value of the brand, in store services and providing fresh food products. Another strategy that has been used by the company was integration of the media “the voice” and the fresh food people marketing campaign. This integration has accelerated the campaign effect on the people. Another major aim of the company that requires strategic approach is to maximize the shareholder’s value (Wheelen & Hunger, 2011). To maximize the same, the company has worker on its portfolio in order to improve it. The company is already having a strong portfolio as it is the implementer for many hotels and local pubs of the country. The company has used the strategy to maintain the track records for growth of the company. Except from Australia, the company has made efforts to expand its business in New Zealand. There are some of the values followed by the company that integrates with the strategy of the company. The first value is related to the responsible marketing by the company. The company never uses any unethical practice to market its products. In terms of employee relation also, company has never used ay of the bad and unethical practice towards is employees. It used to take care of the employees’ rights. The company has made several efforts towards sustainability of the environment by boycotting the se GM crops so that deforestation can be reduced and use the sustainable source for sourcing the sea food products such as fish (Kapferer, 2012). The company has the policy to provide safe working environment to the employees and safe products to its customers. These values supports the company to achieve its objective in ethical way, this also helps the company to raise its revenue along with improvement in its brand value.
Recently, the company has announces some of the strategies adopted by the company for 3 years. The main aim of formulating such strategies is to gain the trust of the customers and to achieve higher customer base as well as to improve the shopping experience of the people. The company argues that they are keeping the customers at the first place for whatever they do. The company is applying the customer oriented approach. The results of the strategy would be reduction in the prices, more and more fascinating offers and innovation in the activities and the products. The three main principles the company is focusing on are offers, growth and the efficiency (Keller, Parameswaran & Jacob, 2011). Offers are such that forces the customers to make their preferred choice as Woolworth. Growth is said in terms of fulfilling most of the needs of the customers. Woolworth has recognized that even if the company is having large customer base but most of their needs are not fulfilled by the company. This forces the company to innovate its products range in such a way that all its customers get their basket full under the one roof only. Efficiency is the principle that allows the company to improve its process so that can attract more of the customers and achieve brand value.
According to strategic analysis of the company, several recommendations can be made for the company in order to make some of the changes that can help the company to improve its position in the market (Nag, Hambrick & Chen, 2007). Woolworth has the capability to opt for other cost leadership strategies to reduce its operation cost. Cost leadership strategy can be defined as the strategy that helps the company to produce the good at low prices by low input and high output. The strategy can be used in terms of reduction of stock (Thompson & Martin, 2010). The company should deliver the stock or the products to the retailer only when they are required by the retailer so that it can save the cost of stocking and no products can be kept in the retail stores as waste. To implement this strategy, the company needs to develop a forecasting demand programs so that the demand can be forecasted and the products can be delivered accordingly. Strategic alliances are another strategy that can be used by the company. The company is already into strategy alliances collaboration with some of the companies but more efforts to make strategic relations with other companies that can benefit the organization is also a good approach for expanding business. The new innovation that can be done in this strategy is to associate the strategic alliance to the reward program. This can bring shirt term sales boosting for the company but can also help in bringing long term brand loyalty. As discussed earlier, that the company wants to serve its customers in such a way so that they cannot go empty handed from the stores (Rotha?rmel, 2017). This suggests that the company needs to diversify its products range. Increasing the products range of the company helps the company to serve its customers all the products under one roof. This helps the customers to stick to the brand and they will not go anywhere else if they find all their required products in one store. As per the analysis, it has been identified that the company is mainly focusing on its customers and not more on its employees. The company should opt some of the strategies to engage employees to perform effective. This is because human resource is very important for any of the customer’s oriented industry. Therefore, training the employees regarding customer service help the company to achieve higher customer service rating and positive reviews from the customers(Saloner, Shepard & Podolny, 2011).
Conclusion:
Woolworth is the company that is ranked among top companies in super market industry of Australia. According to the strategic analysis, it has been analyzed that the company is facing the competition in the industry. It has the core competencies such as its supply chain and the resources available to deal with the rivals in the industry. The strength of the company is supporting the firm to withstand on the op position in the industry (Spillan & Ling, 2015). The company is cutting down its prices to serve the customers with low prices products without compromising the quality of the products. This strategy of the company has supported it to achieve high degree of customer base and loyalty. The company can use some of the approaches like cost leadership and innovation in the products to achieve higher market share in future.
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