3 Impact of not having a strategic plan
After being corporatized and listed on the Australian Stock Exchange in 1984, Wesfarmers was considered to be one of the most elite organisations based on the returns it offered to its shareholders. A major contributor to the organisations success is strategic planning. But would the organisation achieve the same amount of growth without planning? The absence of planning can impact the organisation in the following ways:
• Loss of market share - Competition is increasing by the minute and organisations are always looking to outperform each other. Bunnings, one of Wesfarmers most successful businesses, is a large retailer of hardware products that had 215 outlets and had acquired 80% of the market share
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The energy division of Wesfarmers includes organisations that produce/export and distribute gas and also organisations that generate energy to remote towns. Not having a strategic plan that can combat these changes will negatively impact the performance of the organisations within the energy division of Wesfarmers to such an extent that they will find it difficult to even sustain themselves in their market. This will impact the overall performance of Wesfarmers and the organisation will find it that much more difficult to achieve its …show more content…
Multinational strategy- Organisations that adopt a multinational strategy are focussed on achieving local responsiveness. A product similar to the home country market is developed in an overseas market. The difference between the two products is that the one developed in the overseas market will be customised according to the needs of that market. This leads to a duplication in production facilities for the organisation and hence increases its operational cost. The overseas market is autonomous and hence are responsible for their own marketing, R&D and production with no control from the headquarters. As a result, the transfer of skills and competencies from the headquarters to the overseas subsidiary is very rare. Such a strategy is recommended for organisations that are looking to achieve local responsiveness without having the pressure of reducing operating costs.
2. International strategy- Organisations that incorporate an international strategy focus on creating value by transferring skills, competencies and products to overseas markets that do not possess the same. The product offered in the home country market will be similar to the overseas market. The scope for customisation of a product is limited. The headquarters has control over the R&D, marketing and product strategy. This type of strategy is recommended where the pressures of achieving local responsiveness and cost reduction are
Hennart, J-F (2001) Theories of the Multinational Enterprise, In Rugman A. M. and T. L. Brewer (eds.) (2001) The Oxford Handbook of International Business, OUP, Oxford
Today, many companies enter the global market, and some companies have become extremely successful in the global marketplace and others still struggling. In Theodore Levitt’s article “The Globalization of Markets”, he states that a well managed corporation focuses on selling standardized products with high quality and low priced instead of focuses on selling on customized products with high cost. Levitt defines the differences between multinational corporation and global corporation, and adopts many specific examples to proves his view. He defines the multinational corporation who operates in many countries and adjust its product based on the taste of specific region. This will result in a high cost to produce the product because company have to input more resource into each individual product. However, global corporation sells similar product worldwide at relative low cost. According to Levitt, the cultural differences are becoming more and more “homogenized”; therefore, becoming a global corporation will lead to the successful of the company in the global market.
Firms exist with the purpose of create and deliver economic value (Bensaco et al 2010, p. 365); therefore, business that create better economic value than its competitors will attain an advantage position in market place. Companies might try to improve its sales (profit) through domestic expansion, product diversification or by internationalisation; this report will focus on the reasons of espressamente Illy to expand internationally; additionally, its sources of competitive advantage and, the analysis of three markets in which company want to participate.
Globalisation allows individuals, groups, corporations, and countries to reach around the world farther, faster, more deeply, and more cheaply than ever before. Most large local companies regard globalisation as opportunity, thereby exploring overseas markets for maximum market share and optimum business strategies. However, managers would face a series of challenges caused by leadership models, cultural backgrounds, political and economic risks, HR management, etc. To study multinational management skills is very useful for my future career. In this essay, I will set goals for this subject, identify the skills I have honed and need to improve, and explain my strategies for achieving goals.
Planning is an essential process in today’s organizations. Based on the three types of managers: top-level (strategic managers), middle-level (tactical managers), and frontline (operational managers), exist three corresponding levels of planning: strategic, tactical, and operational. The purpose of this essay is to focus on the strategic level of planning for the Ford Motor Company; a leader in the global automobile industry. Strategic planning, according to Bateman and Snell (2009), “involves making decisions about the organization’s long-term goals and strategies” (p. 137). This paper will elaborate on six key influential factors: economic, environmental, competition, foreign policy, domestic policy, and innovation; that shape this corporation’s strategic plan. Finally, a SWOTT analysis will be conducted covering the strengths, weaknesses, opportunities, threats, and trends, that the Ford Motor Company has in relation to its business environment.
Why would a company go international? There are many reasons why companies would go international, but generally a company goes international so they can seek opportunities in domestic markets, or they seek solutions to problems that cannot be solved through domestic operations. There are many profitable possibilities by going internationally and these include greater profit potential, offers new locations to sell products, it may provide better access to needed raw materials, it may access to financial resources from many nations, and lastly it may allow labour-intensive activities to locate in countries with lower labour costs. For a small business to become an international business they must use five guidelines the first is global sourcing, exporting and importing, licensing and franchising, joint ventures, and wholly owned subsidiaries. The first two are market entry strategies and the remaining are direct investment strategies.
Multinational enterprise (MNE) is “a company that is headquartered in one country but has operations in one or more other countries” (Rugman and Collinson 2012, p.38) that has at least one office in different countries but centralised home office. These offices coordinate global management in the context of international business. MNEs have increasingly essential influence on the development of the global economy and coordinate with other companies in different business environments. However, there are many issues involved with how MNEs operate well overseas, especially in emerging markets (EMs) (Cavusgil et al., 2013, p.5).
Wheelen, T. L., & Hunger, J. D. (2012). Strategic Management and Business Policy: Towards Global Sustainability. Upper Saddle River, NJ: Prentice Hall.
There are different types of strategic planning that are currently in use, since this is a widely debated area of management. However, it is concluded that there are two main schools of thought, the prescriptive approach or the emergent approach (Lynch, 2012). As defined by Lynch, (2012) prescriptive strategic planning is the term given to a strategy whereby the objective of the strategy is defined in advance and the main elements are designed and develop...
Fuqua and Kurpius (1993), defines strategic planning as a model that facilitates change and development within the organization. When compared to other processes of planning, the strategic planning model has been distinguished by Fuqua and Kurpius (1993) as: focussing more on the process than the product; making use of visions that can be easily distinguished from the steps that need to be taken in order to achieve those visions; placing an emphasis on the involvement of all possible stakeholders; characterizing change as a meaningful force not merely as barrier; being, fluid, long term and perceptive and being dedicated to the future survival of individuals that take part in the process of planning.
The food and staples retailing is an increasingly competitive industry. The market giants (competitors) are Coles (owned by Wesfarmers) which has 741 stores across Australia and plans to add 70 m...
There are various schools of strategy that have been vigorously debated on and after a consolidated effort; three schools of strategy were produced. They are the planning school, the positional school, and the resource based school of strategy (Ritson, 2013). All these strategies will be described with examples to buttress each.
Planning entails Decision making on what needs to happen in the future and generating strategy for action. As a good manager, determination of organizational goals and methods of achieving those goals is very important. Planning requires the administration to appraise where the company presently is and where it would be in the future and therefore, an appropriate course of action is determined and executed to attain the company's vision and mission. Management analyses internal and external factors that may affect the company, hence the need for strategic planning arises. Under the strategic plan, a SWOT analysis is carried out to find out the Strengths and weaknesses of the organization, identification of opportunity stretch and preventive...
Without taking the time for a strategic plan and goal setting you very likely will end up down the wrong road. To be successful you need to form a clear well planned course of action. This course of action may change or be tweaked along the way. However, the foundation needs to be built to succeed.
Nowadays, business is set in a global environment. Companies not only regard their locations or primary market bases, but also consider the rest of the world. In this context, more and more companies start to run multinational business in various parts of the world. In this essay, companies which run multinational business are to be characterized as multinational companies'. By following the globalization campaign, multinational companies' supply chains can be enriched, high costs work force can be transformed and potential markets can be expanded. Consequentially, competitive advantages of companies can be strengthened in a global market. Otherwise, some problems are met in the changed environments in foreign countries at the same time. The changed environments can be divided into four main aspects, namely, cultural environment, legal environment, economic environment and political system problems. All the changed environments make problems to multinational companies. In particular, problems which are caused by changed culture environment are the most serious aspect of running a multinational business. This essay will discuss these problems and give some suggestions to solve them.