The Hierarchy Of Strategic Intent Marketing Essayukessays.com /essays/marketing/the-hierarchy-of-strategic-intent-marketing-essay.php

Strategic analysis, strategic choice and strategy application are the three parts of the StrategicManagement. Strategic choice is anxious with decisions about the company’s future and the way itneeds to reply to the impacts and influences identified in strategic analysis. The choice becomes anindolent exercise if the strategy is not correctly implemented. These three divisions, so, form a closedloop in which the tail and the head are often vague.

TASK1

Understanding the process of strategic planning:

Explain strategic contexts and terminology – missions, visions,objectives, goals, and core competencies:

STRATEGIC INTENT:

Strategic analysis, strategic choice and strategy application are the three parts of the StrategicManagement. Strategic optimal is concerned with decisions about the organization’s prospect and theway it needs to respond to the effects and impacts identified in strategic analysis. Choice becomes anindolent exercise if the strategy is not properly applied. These three divisions, consequently, form aclosed loop in which the tail and the head are often indistinguishable.

THE HIERARCHY OF STRATEGIC INTENT:

I will discuss these parameters as a ladder of strategic intent. The ladder of strategic intent includesthe following elements.

A broad vision of what the organization should be.

The organization's mission

The strategic objectives and specific goals to be pursued relentlessly

The plans that are developed to accomplish the intentions of management in a concrete way.

The fundamentals of the hierarchy specify the devout intentions, lofty ideals and clear-cut ideas thatserve to unify the energy and forces scattered throughout an business. They are beginning points forany formal planning process, but they also provide the sense of direction necessary to assure thatincremental behavior culminates in overall progress. Strategic intent is said to have expressedeffectively when individuals believe fervently in their products and industry and when they are absorbedtotally on their firm's ability to outdo its competitors.

VISION:

Vision is what keeps the business moving forward. Vision is the motivator in an business. It needs to bemeaningful with a long term viewpoint so that it can motivate individuals even when the business isfacing discouraging odds.

Vision has been defined in numerous dissimilar ways.

Kotter defines it as a "description of somethings (an organization, corporate culture, a business, atechnology, an activity) in the future".

El-Namaki reflects it as a "mental perception of the kind of environment an separate, or anorganization, aims to create within a broad time prospect and the underlying conditions for theactualization of this insight".

Miller and Dess view it simply as the "category of intentions that are broad, all inclusive, and forwardthinking".

The communal strand of thought evident in these definitions and several others available in strategicmanagement literature narrates to ‘vision' being future ambitions that lead to an inspiration to be thebest in one's field of action.

CHARACTERISTICS OF VISION:

Vision is industrialized through sharing across an organization:

Famous stories of successful vision include visions that have been extensively shared across entireorganizations. Of course, an individual leader, often a founder has a powerful influence on the others.

Techniques of convincing the others about vision:

The leaders by working hard along with others persuade the others in the organizations rather thanmerely delivering speeches.

Change Agents: Leaders must recognize the complexity of changing an outmoded vision to reflect newrealities. Organizations must redefine themselves through efficient visions of the future through newpurposes and strategies.

THE ADVANTAGES OF HAVING A VISION:

Parikh and Neubauer point out that numerous advantages accumulating to a business having a vision.Here is what they say:

Good visions are inspiring and exhilarating.

Visions represent a discontinuity, a step function and a jump ahead so that the company knows what itis to be.

Good visions help in the creation of a common identity and a shared sense of purpose.

Good visions are competitive, original and unique. They make sagacity in the marketplace as they arepractical.

Good visions foster risk-taking and experimentation.

Good visions foster long-term thinking.

Good visions represent integrity; they are truly genuine and can be used for the benefit of people.

VISION STATEMENT:

When you initiate the process of strategic planning, visioning comes first. Martin Luther King, Jr. said, "Ihave a dream," and what followed was a vision that altered a nation. That famous speech is a dramaticexample of the power that can be produced by a convincing vision of the future. A vision is a guide toapplying strategy. Visions remain about feelings, beliefs, feelings and pictures.

A vision statement responses the query, "What will success look like?" pursuiting of this advent ofsuccess is what inspires individuals to work collectively. It is an significant obligation for building astrong foundation. When all the staffs are committed to the company's visions and goals, best choiceson business decisions are more likely.

CREATING A SHARED VISION:

Most managers, now-a-days, talk about a communal vision, meaning that individuals from across thebusiness have a common mental image and a equally supported set of ambitions that serve to unitetheir efforts.

MISSION:

A mission was earlier careful as the scope of the industry activities a secure pursues. The definition ofmission has slowly expanded to represent a concept that exemplifies the purpose behind the existenceof an organization. Business mission can be defined as the important, unique purpose that sets abusiness apart from other companies of its type and identifies the scope of its operations in productand market term.

CHARACTERISTICS OF A MISSION:

A mission statement includes the basic business purpose and the reason for its being by renderingsome valuable functions for the society. An effective mission statement should possess the followingphysiognomies.

Feasible: The mission should be accurate and achievable. For example, Tesco professed its missionas "to encourage saving among customers by selling their product cheep".

Precise: A mission statement should not be fine or too comprehensive.

Clear: A mission statement should lead to action. O2 mission of ‘connecting people' leads it to a varietyof service with varied tariff structure so as to cater to the preferences of mobile phone users.

Motivating: The mission should be motivating for the employees to be inspired for action. For exampleRoyal mail mission is to expectations of the customer' with dedication, devotion and enthusiasm. Socustomer service has develop a value and it is inspirational and motivating the postal employees.

Distinctive: A mission statement will indicate the major components of the strategy to be adopted. Themission should be unique. When Microsoft defines its mission as ‘to be a world class competitor' itcreates a unique place in the minds of individuals personal computer users.

Indicates major components of strategy: "The mission statement of Shell Bp emphasizes petroleumrefining, marketing and transportation with international standards and modern technology. It indicatesthat Shell Bp is going to adopt diversification strategy in future.

The mission delivers way to insiders and strangers on what the company stands for. It is thesupervisory star for any copany.

MISSION STATEMENTS:

Vision is the critical focal point and beginning to high presentation. But clearly a vision alone won'tmake it happen. Even the most exciting vision will remain only a dream unless it is followed up with thestriving, building, and improving.

RESEARCH OF VISION AND MISSION STATEMENTS:

In a competitive economy ambitious by the cruel logic of markets, a business with a determinedmanagement can transform a business much more quickly and much more efficiently than in the past.Clearly enunciating your strategic intent is the key. Vision and Mission hold an business together.

OBJECTIVES:

An objective designates the result that the business expects to achieve in the long run. It is an endresult, the end point, somewhat that you aim for and try to reach. It is a desired result towards whichbehavior is directed in a business.

CHARACTERISTICS OF OBJECTIVES:

Objectives have the following structures:

Objects Form a Hierarchy: In many organizations objects are structured in a hierarchy of importance.There are objectives within the objectives.

Objectives Form a Network: Objectives interlock in a network fashion. They interrelated andinterdependent. The concept of network of objectives implies that once objectives are established forevery department and every individual in a business, these subsidiary objectives should contribute tomeet the objectives of the total business.

Multiplicity of Objectives: Organizations pursue multifarious objectives. At every level in the hierarchy,goals are likely to be manifold.

Long and Short-range Purposes: organizational objects are usually related to time. Long-range objectsextending over five or more years are the ultimate or dream objectives for the business

GOALS:

They are stated in precise terms as quantitatively as possible. The emphasis on goals is onmeasurement of progress toward the attainment of objectives. Goals have the following structures they:1. Are resulting from objects, 2. Offer a normal for measuring presentation, 3. Are articulated inconcrete terms, 4. Are time-bound and work-oriented.

Advantages and Disadvantages:

It helps organizations do to satisfy a particular need of the society or to fulfill a particular deficiency inthe society. There is always a deadline which sometimes is never meant by organizations.

Review the issues involved in strategic planning:

Businesses that succeed do so by creating and keeping customers. They do this by providing bettervalue for the customer than the competition.

Marketing management constantly has to assess which customers they are trying to reach and howthey can design products and services that provide better value (“competitive advantage”).

The main problem with this process is that the “environment” in which businesses operate is constantlychanging. So a business must adapt to reflect changes in the environment and make decisions abouthow to change the marketing mix in order to succeed. This process of adapting and decision-making isknown as marketing planning.

Where does marketing planning fit in with the overall strategic planning of a business?

Strategic planning is concerned about the overall direction of the business. It is concerned with

marketing, of course. But it also involves decision-making about production and operations, finance,human resource management and other business issues.

The objective of a strategic plan is to set the direction of a business andcreate its shape so that the products and services it provides meet theoverall business objectives.

Marketing has a key role to play in strategic planning, because it is the job of marketing management tounderstand and manage the links between the business and the “environment”.

Sometimes this is quite a straightforward task. For example, in many small businesses there is onlyone geographical market and a limited number of products (perhaps only one product!).

However, consider the challenge faced by marketing management in a multinational business, withhundreds of business units located around the globe, producing a wide range of products. How cansuch management keep control of marketing decision-making in such a complex situation? This callsfor well-organized marketing planning.

What are the key issues that should be addressed in strategic and marketing planning?

The following questions lie at the heart of any marketing and strategic planning process:

• Where are we now?

• How did we get there?

• Where are we heading?

• Where would we like to be?

• How do we get there?

• Are we on course?

Why is marketing planning essential?

Businesses operate in hostile and increasingly complex environment. The ability of a business toachieve profitable sales is impacted by dozens of environmental factors, many of which areinterconnected. It makes sense to try to bring some order to this chaos by understanding thecommercial environment and bringing some strategic sense to the process of marketing products andservices.

A marketing plan is useful to many people in a business. It can help to:

• Identify sources of competitive advantage

• Gain commitment to a strategy

• Get resources needed to invest in and build the business

• Inform stakeholders in the business

• Set objectives and strategies

• Measure performance

Advantages and Disadvantages:

Market planning delivers a means for actively involving personnel from all areas of the business in themanagement of the company and this participation improves the quality of the plans, with theparticipation of the staffs it enhances their overall understanding of the company’s objectives and goal.One of the disadvantages is costly to implement.

Explain different planning techniques:

Planning is a critical business responsibility that is often overlooked, particularly by smaller companieswith limited time and personnel resources. However, the reason for this oversight is often the result ofmanagement's lack of planning techniques. Learning useful planning methods and factors eliminatesthis knowledge gap. Business planning is just as critical as having a map when traveling to anunfamiliar location. Without it you may never reach your destination.

Primary Planning Types

Business planning types come in various flavors depending on the company size and industry.However, there are three basic plans that apply to all businesses, large or small. Business, strategicand marketing plans are important to every for-profit and nonprofit organization. Understanding thegoals and components of each offers businesses the tools to create effective plans using the mostbasic or sophisticated techniques.

Business Plans

Typically used for starting up or financing a company, business plans are the cornerstone of theplanning function. Components of a business plan include an executive summary, market analysis,product/service descriptions and financial/operations projections for a minimum of three to five years.In start-up situations that need initial financing, creators should paint a vivid, yet conservative, pictureof the founders and the rationale for believing the business will succeed. When seeking growth-financing, management should highlight past company performance and carefully project the impact ofthe new funding on improving net income. Always include debt service, which is the amount needed torepay the new loan, in income and expense projections.

Strategic Plan

Strategic plans should be created by business owners and/or senior management only. Unlikebusiness plans, which are based on historical data and future projections, strategic plans are moreconceptual. These plans should include defining your organizational goals, identifying your availableoptions to achieve your objectives and considering new short-term opportunities you believe will existto improve your business's results. You may want to incorporate specific industry trends into yourplanned strategy. Strategic plans are not long-term creations, but should address taking advantage ofavailable opportunities in the next 12 to 24 months.

Marketing Plans

All the fabulous business and strategic plans ever devised will fail if you don't market and sell yourproduct or service. A solid marketing plan will help you achieve gross income and sales goals. A SWOT(strengths, weaknesses, opportunities, and threats) analysis is an effective technique for creating awinning marketing plan. SWOT is also useful in strategic plan creation as a foundation technique. Youcan also combine a SWOT analysis with the four P's product, price, publicity, and place of effectivemarketing. Even if you have invented the "better mousetrap", you need a superior marketing plan to getresults. These techniques will give you the ammunition you need.

SWOT analysis and marketing

A vital part of the planning process is looking at the existing position of an industry and trying to decidehow factors external to the business may affect the business.

An organization can perform a SWOT analysis as a way of deciding which marketing plan to use. Theorganization performs an audit on the internal and external nature of the company looking at the currentand future situation. An audit is a review of all the company’ s activities.

Internal

Explanation

Strategy Implications

Strengths

Reviews the business’ current strengths such as a good brand or strong sales performance

Can develop the strengths, perhaps in the way they promote the product, or wish to develop newproducts (Tesco have used their strong brand name to launch several products)

Weaknesses

Reviews the business’ current weaknesses such poor response times to requests for information or latedeliveries

Can implement strategies to eradicate these weaknesses e.g. more resources put into a betterwarehousing system for the dispatch of goods.

External

Opportunities

Reviews the business’ future opportunities e.g. new technology making it easier to manufacturercertain goods or new markets abroad

Can use strategies to take advantage of the potential opportunities e.g. developing new products tomeet the potential increased demand

Threats

Reviews the business’ future threats, mostly from increased competition from other firms or fromchanges in the economic situation.

Can employ strategies to ward off these problems, e.g. setting lower prices or increasing promotion

Rational about the use of a SWOT analysis in measuring the influence of marketing to a businessstrategy;

Possible strengths in marketing might be:

Specialist marketing expertise

An innovative product or service

The location of the business – convenient for customers

The reputation of the brand – perhaps it is trusted or recognized as the highest quality

Likely weaknesses in marketing could include:

Lack of a clear product differentiation compared with competing products

Weak distribution compared with competitors

Inadequate online presence

Potential marketing opportunities could include:

The use of technology to develop new products

Growing demand from overseas markets (e.g. China & India)

The use of social media like Facebook and Twitter to reach new customers

A list of likely marketing threats might include:

Competitors introducing better products at lower prices

Changes in the economic environment which encourage customers to be less loyal to establishedbrands

Changes in customer tastes and fashions

Universal Techniques

To make business planning come alive and succeed there are three simple practices that must bealways be employed. First, set realistic, measurable goals. Second, understand and communicate withyour customer base. Third, attract and retain the best employees your company can afford. Withoutthese three components, your business planning, however sophisticated, risks failure on a massivescale. Using these three simple techniques, your business plans should deliver the results you want.

SPACE, PIMS.

PIMS data can be described as a guide to help management describe the business a businesssituation and opportunity relative to the offerings of its competitors in two-dimensional space.

TASK 2

BE ABLE TO FORMULATE A NEW STRATEGY

Produce an organizational audit for a given organization

Tesco Marketing Audit:

The marketing audit is a fundamental part of the marketing planning process. It is conducted not only atthe beginning of the process but also during and after the process completion. Marketing audit not onlyconsider its own plan but also considers internal and external factor that affects marketing planning.Some important tools used by marketing audit are SWOT for internal and external environment whereas PESTLE and Five Forces Analysis which focus only on the external environment.

It can be viewed as an ‘umbrella that covers efforts to assess customer needs and wants and tounderstand community patterns. The external environment is reviewed at micro and macro level.

Definition:

The marketing Audit has been defined by Phillip Kotler strategic market auditing (1977) as acomprehensive, systematic, independent and periodic examination activities and resources in order todetermine problem areas and opportunities and to recommend a plan of action.

As per the definition:

Marketing Audit is Comprehensive, systematic, independent and periodic features. In simple wordmarketing audit is the complete review of the environment that includes both internal and externalenvironments of any organization. The marketing audit follows the following areas as components ofmarketing audit:

· Environmental Audit which includes Macro Environmental Audit and Micro Environmental Audit.

· Marketing Strategy Audit

· Marketing Organization Audit

· Marketing System Audit

· Marketing Productivity Audit

· Marketing Function Audit

Processes and techniques used for auditing the marketing auditing environment follows simple threesteps are:

a) Agreement on objectives, scope and approach: Marketing auditor must prepare for the marketingaudit by holding discussion with the CEO and the executive staff and briefly reviewing some financialand marketing data. Often objectives are discussed in the meeting such as determine how the marketviews the company and its competitors, recommending a pricing policy, determining sale activity. Theaudit would cover the marketing operations of the company as a whole.

b) Data collection: More time is spent on the gathering data. More auditors are involved when theproject is large. Auditor has to spent time in deciding what question to be asked, who will beinterviewed and so on so forth. Daily reports of the interviews are to be written up and reviewed.

c) Report preparation and presentation: When the data gathering is over, auditor prepares notes for avisual and verbal presentation to the company officer.

Techniques used for auditing the marketing environments are as follows.

1) SWOT Analysis: It is one of the most important tools of marketing audit. It helps a lot of help to themarketers and is used at the beginning of the marketing audit process. It has advantages as well asdrawbacks. Some of the drawbacks are subjective and cannot be relied too much. Therefore it shouldbe used as a guide in the marketing planning and not as a prescription to the process.

2) PESTLE Analysis: Various factors of the marketing is analyzed by PEST analysis that effects upon

the marketing process. An organization that is carrying the analysis needs to study the environmentalfactors that are internal and external.

3) Five Force Analyses: This is an analysis that helps the marketers to have a clear picture ofcompetitor's for the market. This analysis has some similarities with PEST analysis. In this analysis themarketer goes through five areas of concerns.

Analyze and evaluate the external environment of the organization by using PEST framework, Porter'sFive Forces model and Product life cycle.

Company's profile:

Tesco runs more than 2300 supermarkets and convenience stores in the UK, Ireland, Central Europeand Asia. It is operating in almost areas such as gasoline retail (Tesco Express) small urban stores(Tesco Metro) hypermarkets (Tesco Extra) and Financial service (Tesco Personal Finance). It coversup to 35% stake in US grocery. It is the leading online grocery store and is now expanding its businesswith a TV channel and a retail based education institution.

A) A PEST Analysis of the industry was then undertaken to examine the local, national and globalinfluence of political, economic, social and technological factors to understand opportunities andthreats well.

An assumption was made that most of these ( political, economic, social, legal and environmental )factors would, to some extent apply to the retail industry in Sweden:

Political: Following the European Integration and Free Trade Agreements, the market has openedBritish Companies to invest in Eastern European. It has 60 stores in Hungary. Lidl is fighting hard tomaintain its market share with an aggressive pricing strategy against Tesco.

Economic: Retail industry is fairly recession proof and also very sensitive to interest rate. Because ofSeptember 11 events, the world economy have suffered heavily, stocks were plummeting and pricesare low all time. However the world economy is up after the September 11th attack. Consumers areoptimistic and retail industry is once again boosting.

Social: There are changes in consumer taste and lifestyle present both opportunities and threats for theretail industry. There are alternative Sweden national retailers which poses additional threats to theTesco while entering in the Sweden market industry.

Technical: Introduction of online shopping via internet is now a common place in retailing. IT systemundertakes a paperless operation, the management and administration of the company which aremonitored by the secured severs, it provides a flexible base for running the business. Sweden is at theforefront of technologically developed with national companies like Ericsson, hence Tesco gets anadvantage of developed logistics and distribution channels already in place.

One other tool that will be used in these areas is Porter Five Forces. This model can be used to goodanalytic effect alongside other models such as the SWOT and PEST analysis tools.

Five Forces analyses five important in the determination of competitive power and these are:

· Buyer's power:

· Suppliers' power:

· Rivalry among competitors:

· Threat of new entrants:

· Threat of substitute product

Problems faced by Tesco can be explained by Porter's five forces including of the threat of substitutesfrom other supermarkets, buyer power, supplier power and the power of customer.

Buyer power also decides the prices in the market. If products are expensive in Tesco then they willpurchase from Sainsbury. This mean market is disciplined which make the pricing is disciplined aswell. This in turn stops them to destroy the market in a profit war.

Supplier power is an important part of this model. Supplier power is wielded by suppliers demandingthat retailers should pay them certain price for their goods supplied.

There is always a threat of substitution, although Tesco tries to ensure brand image and quality byhaving the best value for the products.

Tesco acknowledges the fact that there have always been threats from the competitors and newentrants into the markets and therefore always plan to improve upon developments in its stores.

Carry out an environmental audit for a given organization:

PESTLE (Political, Economic, Social, Technological, Ecological, Legal and Environment)

Among the above PESTLE analysis Political, Economic, social and Technological factors areimplemented as a technique for the auditing of the marketing environment.

Political/ legal:-

An environment of marketing at any nation is affected due to the political reasons. There should be themanagement of change once there is a change in the political condition and situation. The system ofnation keeps on changing if there is a lack of stability in politics and the organization should change themarketing strategies as per the changing environment so that the organization can exist in thechanging environment.

Economic:-

Economics plays a vital role in the marketing environment audit. A country with weak economy cannotcompete in the international market. To be successful in the marketing there should be a soundfinancial transaction of an organization. Some of the components of economic factors for environmentalaudit are: Interest rates, Business cycles, Investment policies. There should be good investmentpolicies for the investment by the nation so that the interest of the investor in investment increaseswhich helps to raise financial stability in the nation.

Social and cultural:-

Social and cultural refer to the tradition and costumes or belief of people living in a particulargeographical region. Social value and norms sometimes becomes the barrier to the marketingenvironment. There is vast different in the culture and tradition of eastern and western societies as aresult of it the culture of eastern may not be suitable for western and vice versa. The marketingdepends upon the culture and tradition of any geographical area. S

Technological:-

In this competitive age technological changes plays a vital role in the marketing. All the developedcountries have been successful due to the drastic changes in the technology and their capacity to copewith changing technology. Different technologies can be used for the auditing of the marketingenvironment.

SWOT analysis:-

SWOT analysis includes strength, weaknesses, opportunity and threats for an organization. Strengthand opportunities are the positive aspect of an organization whereas weaknesses and threats arenegative. Similarly strengths and weaknesses are internal environment whereas opportunity andthreats are external.

Low cost of production and sales, good information about the market and sound finance of theorganization are the strengths and lack of communication and low quality of goods are theweaknesses. Similarly lack of competition and expansion of the market is the opportunities whereascontrol from pressure groups, lack of political and system stability are the threats for any organization.

PORTER'S five forces model:-

It consists of five main points that are listed below: -

Bargaining power of the customers: -

It is found in the open or the competitive market where the customer has the advantage over thesuppliers or the sellers. A consumer has the choice of quality and the rate and if the supplier fails to fulfilthe satisfaction of the consumer there is the chance of the customer to walk away from the suppliers. Inthis case the buyer has every right to complain and the seller need to hear it and recover so that thebuyer did not leave the consumption of the commodity..

Bargaining power of the supplier: -

We normally find it in the monopoly market where there is the presence of only one market. Here thesupplier has the advantages over the customers. A seller can fix the price of his own and sell low qualityproducts as a result of it buyer couldn't get enough facilities. As only one marker is available thecustomers are forced to buy goods from the same shop and have no choice. For an illustration, if onecity has only one market the people living there have to purchase the commodities from the samemarket no matter what the price and quality is because they don't have a second option. In this casethe supplier has their own choice of marking prices. Such type of business brings profit motive ratherthan service motive.

Threat of new entrants: -

When there is the presence of new product or the new supplier the old products and the old suppliergets affected. A customer of particular supermarket gets diverted to next one, if the new supplier giveshim new schemes ad facilities. Threat from the substitute product: -

It provides the facilities to the consumers as the consumers have enough choices for the commoditiesto use. The customers won't feel bored of using same product again and again.

Rivalry among the competitors: -

Rivalry begins where there is the presence of competitive market or when two similar types of goodsare present in the market. It gives advantages to the customers. When there is rivalry amongcompetitors' consumers receives the benefits.

Apply organizational and environmental auditing techniques in a givensituation.

As for the project work I have chosen Tesco which deals with retail sales of food and householdproducts. They use PESTEL analysis for the purpose of marketing environment audit.

Political:-

Under political it uses the monopoly system, taxation policies, rules of employing the staffs andgovernment stability as a method of evaluating political environment.

Economic:-

Under the economic sector the interest rates, inflation and business cycles are evaluated for thepurpose of environmental marketing audit.

Social cultural:-

There are different cultures of the particular area. The marketing of Tesco has been influenced due tothe social cultural factors as well. The different elements under socio cultural which can affect themarketing audit of the organization are demography, distribution of income of the people and theirlifestyle.

Technology:-

Technology plays a vital role during upgrade any organization. In this competitive age no organizationcan ever think of improvement in the absence of technology. The factors influencing technology in anorganization can be the development of new technologies, rate of technology transfer and investmenton the research of technology.

Positioning of Ansoff matrix:

For any decision to be taken at the business level, you need the right strategic tools. Ansoff matrix isone of them. Ansoff matrix helps a company decide their market growth as well as product growthstrategies. The 2 questions which the Ansoff Matrix can answer is “How can we grow in the existingmarkets” and “What amends can be made in the product portfolio to have better growth”.

From the above two questions, it is clear that the Ansoff matrix deals with the business external marketscenario as well as the product portfolio which the company has. The matrix is divided into twoquadrants. The product quadrant and the market quadrant. The Product quadrant on the X axis isfurther divided into Existing products and New products. The market scenario on the Y axis is dividedinto existing markets and new markets. Thus the Ansoff matrix divides a firm on the basis of theproducts it has existing products or new products, as well as the markets it is in existing markets ornew markets.

Explain the significance of stakeholder analysis:

What is Stakeholder Analysis?

Stakeholder Analysis (SA) is a methodology used to facilitate institutional and policy reform processesby accounting for and often incorporating the needs of those who have a ‘stake’ or an interest in thereforms under consideration. With information on stakeholders, their interests, and their capacity tooppose reform, reform advocates can choose how to best accommodate them, thus assuring policiesadopted are politically realistic and sustainable.

Although Stakeholder Analysis originated from the business sciences, it has evolved into a field thatnow incorporates economics, political science, game and decision theory, and environmental sciences.Current models of SA apply a variety of tools on both qualitative and quantitative data to understandstakeholders, their positions, influence with other groups, and their interest in a particular reform. Inaddition, it provides an idea of the impact of reform on political and social forces, illuminates the

divergent viewpoints towards proposed reforms and the potential power struggles among groups andindividuals, and helps identify potential strategies for negotiating with opposing stakeholders.

Who Are Stakeholders

A stakeholder is any entity with a declared or conceivable interest or stake in a policy concern. Therange of stakeholders relevant to consider for analysis varies according to the complexity of the reformarea targeted and the type of reform proposed and, where the stakeholders are not organized, theincentive to include them. Stakeholders can be of any form, size and capacity. They can be individuals,organizations, or unorganized groups. In most cases, stakeholders fall into one or more of the followingcategories: international actors (e.g. donors), national or political actors (e.g. legislators, governors),public sector agencies (e.g. MDAs), interest groups (e.g. unions, medical associations),commercial/private for-profit, non-profit organizations (NGOs, foundations), civil society members, andusers/consumers.

To achieve Stakeholders objective an organization should be able to separate their interest from eachother and as such act according to the power they exert in the organization.

Employees of M&S

Have a welfare department established in 1930.

Financial interest safeguarded - bonuses

Job performance appraises and financial incentive

Benefit package - interest free loans granted, Buy as you earn shares, bonus or right issue

Suppliers:

Always used UK based suppliers, ensuring consistent quality

Relationship to build reliance on suppliers

Lifelong relationship.

Mutual dependability respects the specification and standard.

Social commitment:

Strong tradition of CSR

Sponsorship of Charities.

Community development efforts

Government social projects.

Environment friendly:

Removed artificial color and flavoring from its entire food and soft drinks range-April 2008

Launched school wears made from recycled plastic bottle

Despite tough economic conditions Mark and Spencer stick to Plan A, as it gives them brand anddifferentiation.

AL Gore said “a sustainable business can be profitable one”

Business Continuity

Reviewed the tools and processes established to ensure we have the capability to protect our people,the brand, property and profit at all times;

Received plans for all locations both nationally and internationally;

Discussed plans for the Olympics and the Queen's Diamond Jubilee;

Full medical and security package introduced for all business travelers;

Travel tracker system introduced both nationally and internationally;

A group training awareness program launched; and

Evacuation pack and welfare response.

Plan A

The External International Advisory Board established, comprising academics and advisors, extendingour reach to reflect the countries we operate in and source from;

Discussed progress in reducing carbon emissions, improvements in fuel and energy efficiency,reduction in waste and packaging, improvements in recycling and the M&S/Oxfam clothes exchange;

An update on work with suppliers to set up 12 Ethical Model factories in Bangladesh and three in India;

Review of commitments against plan;

Overview of discussions with UNICEF outside the UK on social development programs linked to thegarment industry; and

Overview of what we believe will be benchmarked as industry leading positions across a number of keyareas.

General Merchandise ethical sourcing

Reviewed how we manage the ethical risks across our supply chain outlining our ethical tradingapproach across 1.7 million workers, spread over 1,448 sites in over 77 countries with 55 differentlanguages;

Considered the key ethical issues including: excessive working hours, poor health and safety, termsand conditions of employment, migrant labour, and low wages;

Discussed the team and the independent ethical trading division based in our regional offices in China,India, Vietnam, Sri Lanka, Bangladesh, Turkey and the UK.

M&S was the first UK retailer to create a clear set of labour values in 1998 known as our GlobalSourcing Principles. Each trader must agree to and sign our terms and conditions, which include theseValues. M&S has been a founding member of the Moral Trading Inventiveness since 1998 and we haverecognized moral policies on key issues. They have a clear factory approval process which is self-governing from our purchasing departments.

International business development

Focused on the risks to our international growth – each risk was highlighted and discussed, alongsidethe relevant mitigating action which was either recently taken or in progress;

Discussed the team and its integration – the presentation also covered the performance of our partly-owned businesses, franchise operations, ethical reputation and the importance of having an alignedapproach across the business.

Data security

Apprises relating to our investment in IT security, structure of the new retail website platform and themove from the current platform reinforced by Amazon. International activities, user access and thecontrols around the protection of individual data. Strategies were reviewed as was the staffing ofresource and the skill sets these individuals bring to M&S.

Stockholder influences on the organization: Sources: www.qualitydigest.com.

TASK 3

Analyze possible alternative strategies relating to substantive growth,limited growth or retrenchment:

Product market mix:

Hands-off product/market growth matrix suggests that a business’ attempts to grow depend on whetherit markets new or existing products in new or existing markets

Sources: www.oup.com/uk/orc/bin/9780198782292/ch14.pdf

Market Penetration:

Here we market our existing products to our existing customers.

This means increasing our revenue by, for example, promoting the product, repositioning the brand,and so on. However, the product is not altered and we do not seek any new customers.

Market Development:

Here we market our existing product range in a new market. This means that the product remains thesame, but it is marketed to a new audience. Exporting the product, or marketing it in a new region, areexamples of market development.

Product Development:

This is a new product to be marketed to our existing customers. Here we develop and innovate newproduct offerings to replace existing ones. Such products are then marketed to our existing customers.This often happens with the auto markets where existing models are updated or replaced and thenmarketed to existing customers.

Diversification:

This is where we market completely new products to new customers. There are two types ofdiversification Related diversification means that we remain in a market or industry with which we arefamiliar. For example, a soup manufacturer diversifies into cake manufacture (i.e. the food industry).Unrelated diversification is where we have no previous industry or market experience. For example asoup manufacturer invests in the rail business.

Diversification and Synergy:

Synergy occurs when the combined results produce a better return than would be achieve by the sameresources used independently.

Marketing synergy – Use of common marketing facilities –Distribution channel

Operating synergy- better use of operational facilities, personnel, bulk purchasing.

Investment synergy – Wider use of common investment in fixed assets, working capital and research.

Management synergy-Management skills gained for current operations are easily transferred to newoperations.

Divestment strategy:

It is the selling off part of a firm’s operation or pulling out of certain product market areas. Reason for:

Company’s business buy and sell businesses

Resource limitations

Insolvency

Merging with another company provides the opportunity to increase market share and expand into newgeographies and sectors. Suveen Sahib, Group COO and CEO, Americas of EBS Worldwide, amarketing and technology company, merged his company that had a premerger value of $7 million tocreate a company valued at $15 million. Sahib says, “EBS Worldwide started in India and now has afootprint in the U.S., allowing for its global clients to benefit from our strong position in these regionsand our large suite of services.”

Methods of growth (Domestic market).

Building up new businesses – from scratch and developing them

Acquisition – existing business from their current owners

Merger- of two or more separate businesses

Joint ventures- Spreading the costs and risks and with other forms of cooperation.

Methods of growth (International market).

Direct export

The organization produces their product in their home market and then sells them to customersoverseas.

Indirect export

The organizations sell their product to a third party who then sells it on within the foreign market.

Licensing

Less risky market entry methods. Licensor will grant an organization in the foreign market a license toproduce the product, use the brand name etc in return that they will receive a royalty payment.

Franchising

The organization puts together a package of the ‘successful’ ingredients that made them a success intheir home market and then franchise this package to overseas investors. The Franchise holder mayhelp out by providing training and marketing the services or product. McDonalds is a popular exampleof a Franchising option for expanding in international markets.

Contracting:

The manufacturer of the product will contract out the production of the product to another organizationto produce the product on their behalf. Clearly contracting out saves the organization exporting to theforeign market.

Manufacturing abroad:

To establish a manufacturing plant in the host country. There may be tax incentive as the hostgovernment wish to attract inward investment to help create employment for their economy.

Joint Venture

Two organizations may come together to form a company to operate in the host country. The twocompanies may share knowledge and expertise to assist them in the development of the company; ofcourse profits will have to be shared.

Select an appropriate future strategy for a given organization:

Following a wide-ranging and detailed strategic review of its business, the Board of M&S announced inMarch 29 of 2001 significant changes to the Group strategy and structure. The highlights of this newplan are:

a) Total focus on UK retail

The Company will return to selling only own brand products and brands exclusive to M&S so it canguarantee customers the quality, value and service they have come to expect. Central to the recoveryplan is the delivery of significant improvements in product appeal, availability and value therebyrebuilding the relationships with core M&S customers.

Recovery plan for Clothing

The Company has plans to regain the confidence of its customers in the quality

and fit of its clothing. It will sharpen pricing by rebalancing the price architecture, extending the range ofentry-price merchandise and communicating this clearly to customers.

Expansion in growing product areas such as Food, Home and Beauty

M&S Foods continues to perform well and has earned customers' trust for providing quality, innovationand convenience. The business is a key platform for future growth and the Company is consideringopportunities to expand its reach through new locations and selling channels.

The Home business is growing strongly, with home furnishings and gifts the fastest growing productareas. Beauty, albeit relatively small, is also growing rapidly. Both of these areas offer promisingopportunities for development and will be expanded.

Acceleration of store renewal program

Accelerate Store Renewal Program: M&S will accelerate the rollout of the successful elements of its

new concept format under a plan to refurbish more stores faster and at lower cost. Two-thirds of itsretail space (120 stores) will be completed by the end of the coming financial year, benefiting themajority of M&S's customers.

More intensive use of space

Selling space will be reallocated to higher growth product areas to maximise returns per square foot. Intotal, 600,000 sq ft will be reallocated within the year to areas such as the new Clothing range suppliedby George Davies, Home, 50 new Beauty Shops, and 30 new Coffee Shops.

Being closer to the customer

In order to be more customer oriented, some stores in big cities will be open 24 hours per day. By otherhand, 125 stores in the UK will be modernized in order to create a more attractive, easy-to-shopenvironment for our customers. These stores represent two thirds of total UK stores. Modernizationinvestments will amount £100 million.

With all changes, the company expects to raise the operating profit in the UK by 10% approximately(£40 million) per year.

b) Value realization, cost cutting measures and closure of loss-makingbusinesses

In order to focus all its efforts on the recovery of the UK business, Marks & Spencer intends to divest orclose non-core businesses and assets, subject to consultation with its employees.

Intention to close Continental European subsidiaries except the Irish ones

The Company intends to close its loss-making business in Continental Europe (France, Germany,Belgium, The Netherlands, Luxembourg and Spain), affecting some 3,350 jobs. That business was nota success. In the last three years it has lost nearly £100 million, with a loss of £34 in the last 12months. The stores were too big and the company hadn’t properly understood the markets beforeinvesting in them.

The Company's business in the Republic of Ireland is growing fast and profitably (£22,6 million inprofits in 2001), therefore Marks & Spencer remain firmly committed to this business.

The budget of the sales price of these sales is £450 million, without considering the exceptionalcharges of the restructuring, which have been included in the P&L of 2001. By other hand, during theyear 2002 there will be some additional exceptional charges (£26,4 million) in connection with thediscontinued operations.

Sale of profitable Brooks Brothers and Kings Super Markets in the US

The company also intends to dispose of its two profitable United States businesses, Brooks Brothersand Kings Super Markets. These operations do not provide an appropriate platform for futureinternational expansion by Marks & Spencer.

The budgeted price of these sales are £550 million and £275 million respectively.

Franchising of business in Hong Kong

The Company's 10 stores in Hong Kong will be sold to become a franchise. The budget of the saleamounts to £110 million. The franchise business, spanning 30 countries and operating with appropriateformats and strong local partners, continues to be successful.

Intention to close Direct catalogue business in the UK

Marks & Spencer intends to close its loss-making catalogue business including a dedicated call centerand fulfillment center, with about 690 jobs affected in total. Although the joint Clothing and Homecatalogue will be discontinued, Marks & Spencer is committed to maintaining its e-commerce web site:www.marksandspencer.com, as well as a Home brochure and a range of services including flowerdelivery. Last year losses of the direct catalogue unit have amounted £38,6 million. The budgeted costof closing this unit is £35,5 million and has been included in the P&L of 2001.

Release value of almost half the property portfolio

To reduce the dilution from the relatively low returns from property investment, M&S intends to releasevalue from almost half of its extensive property portfolio (78 stores). That means that the company willrent instead of owning the property in which it operates. They are going to use the sale and lease backtype of financing. Ownership of stores in prime locations will be retained to maintain maximumoperational flexibility as well as capturing future increases in capital value. The budgeted price of thesesales is £348 million.

Cost cutting

To reduce the costs of goods sold using less suppliers and using foreign suppliers, mainly from Asia. Atpresent UK suppliers represent 70% of total purchases. This % will be reduced till 25%. This measurewill allow to reduce sales price and to increase profits.

To reduce general and administrative costs at the headquarters, where 350 jobs will be reduced.

With all this cost cutting measure, M&S plans to increase the operating profit by £100 per year.

c) Improved capital structure

Working capital reduction

Another set of measures will pursue to reduce the investment in inventories by 10%. That means areduction of £90 million.

Return £2 billion of cash to shareholders by the end of March 2002

To create a more efficient capital structure and improve the potential for a faster rate of earningsgrowth Marks & Spencer intends to return £2 billion to shareholders by the end of March 2002. Therelease of value from almost half the company’s property portfolio and the sale of internationalsubsidiaries will finance this decision. Following the return of cash to shareholders, Marks & Spencerwill retain the financial strength and flexibility to fund future growth.

Financial Impact

The benefits to trading profit from the closure of the European subsidiaries and the changes to Directwill be about £50m in a full year. These measures will give rise to exceptional charges in the currentyear of £250 m to £300 m, in addition to the £42m already announced at the company’s Interim resultsfor the cost of satellite closures in the UK. Some two thirds of the £250 to £300 m will be cash itemscovering closure costs and future trading losses.

SECTION 4

Explain how you would implement a chosen strategy:

The original strategy employed by M&S was to build its brand. The company’s resources included theSt Michael logo, the policy of using mainly British suppliers, and good customer relations. Qualitycontrol was achieved by working closely with suppliers, and the M&S management system focused ona top-down approach that became standard in all stores. Customer satisfaction and loyalty wassecured and there was steady growth in market share and profit until the 1990s, when competition atthe top and bottom end of the market rendered this strategy obsolete. The top-down managementapproach caused M&S to become vulnerable to market changes so new resources were created,including a department with a remit to seek out new business opportunities; more autonomy for storemanagers; different procedures for buying. M&S began to look overseas for suppliers. The SimonMarks’ management style was directly linked to this strategy.

Restructuring was designed to reposition M&S at the market’s core and to restore and enhance someof its key resources. The close working relationship between suppliers, employees, management andloyal customers was enhanced. New customers were attracted by campaigns featuring Twiggy andyounger models so M&S could widen the appeal of its clothing range. The techniques of broadening itsappeal, responding to customer preferences and introducing new products in food and finance haveassisted M&S towards recovery.

The development of the quality food market has been a particularly successful new resource. Usingdesigners to create unique food areas M&S has continued to sustain consumer interest in its foodrange.

Recovery Plan – Mark & Spencer:

1) Putting together the right team – the values that the founder instilled into this Company.

2) The Strategic Review and Selling the Plan- quality, value, service and innovation, drawing onstrengths which still exist to inspire trust in our customers. Plan: 1- Focus the entire organization on ourUK business

100% Own Brand – sell only M&S brand

Improved Segmentation of Clothing- satisfy the aspirations and traditional demands

Build on Success in Foods- fast-growing sectors as ready meals and prepared foods

Accelerate Store Renewal Programmed- under a plan to refurbish more stores faster and at lower cost.

More Intensive Use of Space:

Improve the Supply Chain - direct relationships with our suppliers

Financial Services –Developing M&S store card

Plan: 2 - Sell or Close loss-making businesses:

No longer afford to support non-core activities

Stop subsidizing loss-making businesses

To divest or close non-core businesses and assets

10 stores in Hong Kong will be sold to become a franchise

Direct - to close its loss-making catalogue business, a dedicated call centre and fulfillment center

Plan: 3 - Change the Capital Structure

To reduce the dilution from the relatively low returns from property investment Tesco's Strategy

Strategy of cost leadership-

Lowest cost - products and services to a broad market at the lowest prices

Ability to control their operating costs and price their products competitively.

Able to generate high profit margins- significant competitive advantage

Market Development Strategy:

Joint developments and Strategic alliance

Entering new markets like China and Japan

Key growth driver for revenues and expansion strategy

Asian markets - increase in consumer spending and trend towards retailing.

New markets demographically high opportunity markets

International alliances with the local retailers in Asian markets.

Method of development - exploit current resources and competence

Entering into joint ventures or partnerships, to gain larger economy of scale and larger marketpresence.

Extensive local knowledge and operating expertise of the partner.

Sustainability - strategy addresses the circumstances in which the company is operating.

Acceptability- expected return from the strategy, the level of risk and the likely reaction of stakeholders.

Feasibility - whether Tesco has the resources and competence to deliver the strategy.

Product Development:

Diversification, expanding and diversifying the Tesco's product mix

To implement internal development when new products are developed.

The nature and the extent of diversification

The changing needs of the customers Tesco can introduce new product lines

Require more attention to R&D, leading to additional spending.

Also develop different store types in Eastern European and Far Eastern markets

Value added by the uniqueness will eventually lead Tesco to command a premium price

The management of technological innovation is increasingly involved in strategic decision-making.Tesco has to exploit their internal strengths and minimize their internal weaknesses in order to achievesustained competitive advantage. From the above comparison it is very clear why Tesco is dominatingthe retail market. The success of the Tesco shows how far the branding and effective service deliverycan come in moving beyond splashing one's logo on a billboard. It had fostered powerful identities bymaking their retailing concept into a virus and spending it out into the culture via a variety of channels:

cultural sponsorship, political controversy, and consumer experience and brand extensions. Tesco'sstrategy at a corporate level defines the businesses in which Tesco will compete, in a way that focusesresources to convert distinctive competence into competitive advantage

Evaluate resource requirements to implement a new strategy for a givenorganization

Product:

Building on our knowledge and understanding to provide exactly what our customers want.

Satisfy aspirations and traditional demands.

Consolidate and developed sectors as ready meals and prepared foods.

Stores:

The changes will extend to around two-thirds of our space, so most of our customers will notice thedifference.

More Intensive Use of Space

Develop the distribution channel

Nurture our brand names

People:

Recruit top talent to strengthen the team, by recruiting qualified individuals.

The values that the founder instilled into this Company.

Quality, value, service and innovation, drawing on strengths which still exist to inspire trust in ourcustomers

Leaders

Leadership and management synergy

Leaders focus on the ends; Managers focus on the means both together reach more.

The leader provides vision; Managers provide execution. Both together achieve more by workingtogether to achieve a single goal.

Capital:

The allocation should be efficient and effective by allocating more capital to the most neededdepartments

Should be wisely invested and monitored to increase profit

Discuss targets and timescales for achievement in a given organization tomonitor a given strategy:

Focus the entire organization on our UK business -100% Own Brand – sell only M&S brand:

Envisioning – need to be communicated at different levels of the organization

Activating - Share the vision and ensure others support

Supporting – Leaders need to support subordinates particularly in times of change

Installing – Developed detailed plans to enact and control the strategy.

Documents the responsibilities – of divisions, departments and individual managers

Prepare responsibility charts –for managers at divisional, departmental and subordinate level

Manager’s major objective

Manager’s general performance for achieving that objective

Critical assumptions underlying the objectives and the performance.

Prepare activity schedules- for managers at divisional, departmental and subordinate level

Controlling - Control process to ensure work is done and deadlines achieved.

Recognizing - those contributed to success of the organization.

Management by objectives - is setting objectives for managers and subunits, rather than imposingdetailed planning specifications on them.

Sources: realisedesign.co.uk

It implies an organization hierarchy:

It empowers managers.

To assume objectives are not in conflict but can be reconciled easily

Assumes that senior management and junior managers to cooperate if they are equal.

Business Communication Defined:

Business communication is any communication used to build partnerships, intellectual resources, topromote an idea, a product, service, or an organization – with the objective of creating value for yourbusiness.

Sources: realisedesign.co.uk

Internal communication:

Communication of corporate vision tragedy, plans, corporate culture shared value

Guiding principles, employee motivation, and cross-pollination of ideas.

External communication:

Branding, marketing, advertising, selling, customer relations, public relations, media relations, businessnegotiations. The main objective is to create business awareness, identifying core competence andadding value to the business.

CONCLUSION

In a rapidly changing business environment with a high competitors' pressure Tesco have to adopt newexpansion strategies. To sustain its leading market position in an already established retailing marketTesco need to continuously identify, select, implement and execute their goals and objectives. Tescoalready has an integrated HRM approach and a very strong brand which will support to formulatestrategy and implement them instantaneously. Tesco image and brand has fostered powerful identitiesby making their retailing concept into a virus.

REFLECTIVE STATEMENT:

This assignment has helped me in developing and implementing strategic planning, I have been able tounderstand that strategic planning controls where a business is going over the next year or more, howit's successful to get there and in what way it'll know if it got there or not. The emphasis of a strategicplan is usually on the entire business, while the emphasis of a business plan is usually on a specificproduct, service or program. There is a diversity of viewpoints, models and methods used in strategicplanning. The way that a strategic plan is developmentally depends on the nature of theestablishment's leadership, culture of the business, the difficulty of the group environment, the size ofthe business and skills of the planners. These ideas would contribute to my ability to undertake anystrategic planning control in my carrier.