The continuity and success of any business progress require strategic management for its daily operation to meet the business goals. Lack of strategic goals may lead to the company making huge losses when proper guidelines are not adhered to by the company. Large company especially financial institution requires strategic planning for their operation to meet the business objective and goals. In this case, we are focusing on strategic management concepts with an example of a business venture in operation by CIMB group holding CIB.
Strategic management is the continuous planning, monitoring and analysis and assessment of all that is required for a business to meet its goals and objectives. The main advantage of the strategic process it helps the management in assessing the company present situation, makes the strategic decision and ensures that the strategic decision is implemented and analyzed for the success of the organization (Brunton, Kankaanranta, Louhiala-Salminen, & Jeffrey, 2019).
1.In the case study, we find a couple of problems with the CIMB group holding. First, the CIMB has not done analysis about the Jupiter security where it needs to acquire an extra license for the joint venture with China Galaxy securities. We know that Jupiter security is a subsidiary broking firm of company Olympia. The company is making losses in the business also Olympia main business is on gaming and not on broker security. It operates financial services and property through Jupiter. Jupiter is affected by market share and its assets are unknown. The license from Jupiter will be for CIMB only and does not cover both companies in the joint venture. This will be a huge problem for CIMB if licensed by the Jupiter security since the security company can crumble down due to high losses it is making and this can lender the license invalidated and hinders the CIMB from the joint venture with the China galaxy. Lack of credible license will hinder the company strategic implementation of its plan to expand its business. The license CIMB has cannot be used in the joint venture; therefore, the company needs do the analysis of Jupiter before it makes the final decision on the issuing of a license to avoid the future implication that can hinder the company from expanding to other locations (Hong, 2014).
Secondly, Stockbroker industry in Malaysia where CIMB want to operate in a joint venture with China Galaxy if fragment. This means that CIMB is not the main firm to operate the business in Malaysia. There is a competition factor to consider. Also, some broker industries have been privatized meaning that the competition in the industry is stiff.
2.Strategic planning consists of various stages to be considered before business goals and objectives are realized (Morton, Stacey, & Mohn, 2018). CIMB is thinking to carry out internal and external strength and weakness of the company. These will help the company to understand its capability for the purpose of making a strategic decision. Knowing the strength of the current situation of the company can enable the key decision maker to allocate the required resources for the right activities in the company. Understanding the cross-functional team in the business helps the organization to realize its goals and business objectives. Having professional from all levels in a different department can help the company to carry out professional duties effective for making and implementing the action plan for the company. The company needs to formulate an analytical team to carry out analysis about the Jupiter where the CIMB wants to get its joint venture license. The team is able to determine whether Jupiter is credible to offer the license required for the operation. For the success of the cross-functional team, it requires cross-functional team management for the purpose of putting the objectives of the company as a priority and not personal interest.
Through a cross-functional team, CIMB is able to do a market analysis in Malaysia before deciding to venture into the business. The business analytical team will be able to analyze the business in Malaysia and give the proper guideline to the management for proper decision making before parking all its stockbroking business in the region. By use of cross-functional team, CIMB is able to facilitate in quick decision making and better problem solving which may lead to better results to the company according to Young-Hyman (2017). Understanding the market changing trends can aid the company to respond effectively and provide the required decision due to the availability of team response in the company. Instead of parking its broker business, CIMB can retain the business and responds to the current market changing trends which can help the company from being affected by the market share and volumes.
The company needs to have strategic planning before it ventures into the new market. The strategic plan enables the company to make short and long term goals that determine the decision and action to meet those goals. Strategic plan aids in helping the organization leaders to make the effective decision that meets the organization goals. The planning committee researches on the organization to gather information about the current status of the business and to obtain the factors that may impact the business in the future. CIMB needs to formulate a planning committee to research on the business and provide the management with the current status of the business. The committee should come up with short term goals before deciding to venture into investing with China Galaxy which is an international security company with more than eight million customers. The company needs to know the risk that comes with an online business where the China galaxy security main customers operate. Also, CIMB needs to know if it has the required skills and competency to operate the joint venture. Strategic planning will bring the awareness of the future opportunities and challenges that come with the new venture, it will enable the company to know the resources required to meet the major future requirements and challenges also strategic planning able the company to have a future direction towards meeting the company objectives and goals.
The company needs an execution plan that enables the company to carry out or execute, monitor and control various activities. The execution plan guides the company to order the activities in a timely manner and enhances the utilization and allocation of resources to those activities. Having an execution plan CIMB will be able to execute various activities and know the required budget for every activity for proper resource allocation. Finally, CIMB needs to do an evaluation to understand what has been successful and making proper change where desired results have not been achieved. Knowing that Jupiter has major as a licensing, CIMB can opt to make changes and change the license from another licensing body for the joint venture to be successful.
3.Strategy management is justified because it has various advantages. Strategy management guides the company in making a viable decision geared toward organizational goals. The key decision makers depend much on strategic management for quick decision making and problem-solving. Understanding the company current situation enable the planning team to formulate ideas that can help the company to make an effective decision for the company. Understanding the strength, weakness, opportunities, and threats help in detecting and analyzing the internal and external environmental factors that may impact the business and prepare for the future and in making the right strategic decisions.
With CIMB, the company is able to understand its strength and weaknesses before venturing into the joint venture with China galaxy security. The company is able to analyze the market at hand and understand the underlying opportunities and threats that the company may face before engaging in the business. The company is also enabling to analyze the organization aspects of the environment to formulate competitive strategies in the environment the business has to function. Also, strategic management enables the company to understand the organizational culture which can determine the success and failure of the business. A strong business culture makes it easier for management to motivate their staff in executing their task in line with the business outlined goals. CIMB having a joint venture and contribution of 50:50 contributions on market share needs has to do the evaluation and make clear decision if the company is able to sustain itself in the market despite the high competition in the region (Tencent Holdings Limited SWOT Analysis, 2019).
Conclusion
The business organization requires strategic management for success and realization of business goals. The company requires having functional teams to carry out various professional goals that aid in proper decision making. Functional teams enhance quick decision making and problem-solving. The company needs to have a planning team to carry out effective research for the purpose of understanding the company’s current needs and formulating ideas that can impact the business in the future to meet the business goals. Understanding the company strength, weakness, opportunities, and strength can help the company in proper planning and in making an effective decision. Also, this helps the company in understanding the environmental competitive factors and aids in formulating measures on how to adapt to the new venture and measures on how to cope with the competition.
References
Brunton, M., Kankaanranta, A., Louhiala-Salminen, L., & Jeffrey, L. (2019). Are Strategic Communication Management Competencies and Personal Attributes Global? A Case Study of Practice in Finland and New Zealand. International Journal of Business Communication, 56(2), 151–172. https://doi.org/10.1177/2329488415608846
Hong, J. (2014). Data Envelopment Analysis in the Strategic Management of Youth Orchestras. Journal of Arts Management, Law & Society, 44(3), 181–201. https://doi.org/10.1080/10632921.2014.937888
Morton, J., Stacey, P., & Mohn, M. (2018). Building and Maintaining Strategic Agility: An Agenda and Framework for Executive IT leaders. California Management Review, 61(1), 94–113. https://doi.org/10.1177/0008125618790245
Tencent Holdings Limited SWOT Analysis. (2019). Tencent Holdings Limited SWOT Analysis, 1–9. Retrieved from https://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=134890317&site=ehost-live
Young-Hyman, T. (2017). Cooperating without Co-laboring: How Formal Organizational Power Moderates Cross-functional Interaction in Project Teams. Administrative Science Quarterly, 62(1), 179–214. https://doi.org/10.1177/0001839216655090
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