Understanding the process of strategic planning

Describe about the HND Business Management for Collective Organization.

The purpose of the study is to evaluate the importance of business mission, vision, core competency and objectives in strategy development. Nowadays, organizations are focusing on the strategic development in order to gain superiority in competitive market. In order to build business in competitive market, the contemporary organizations are paying close attention to the market research (Leibold and Hugo 2015). It helps organizations to understand the market trends and competitors’ strengths and weaknesses. The competition is rapidly increasing in global market and therefore, it is highly important for the companies to define goals and objectives. It would help the companies to break down the broad goal into small objectives.   

Assessing how missions, visions, goals, objectives and core competencies inform strategic planning

Mission

Mission statement defines the commitment of function of an organization. It also defines the overall aim, which an organization wants to meet within a specific deadline. An effective mission statement helps an organization to identify the targeted customers and the products or services (Kacker et al. 2016). Apart from that, it describes the way in which an organization needs to run its business in domestic or global market. Following is the example of mission statement of Tesco.

• To achieve the leading position in retail industry in global market
• To expand the market share of Tesco to the international market
• To provide quality products at affordable price in order to increase consumers’ value in global market

Vision

Vision statement of an organization defines the extent in which an organization has planned to be financially successful. It consists of the potential benefits of the investors or stakeholders after investing in the business model (Barrick et al. 2015). For instance, Tesco’s vision is to become the leading organization in retail industry. The company is aimed to provide high quality products at low cost in order to attract stakeholders and shareholders in global market.

Goals and objectives

The purpose of setting goals and objectives is to achieve a specific result from the business model. Here, goals determines the overall aim of an organization, while on the other hand, objectives are the stages through which the organization will achieve the goal. An effective goal should be realistic and time specific (Muhammad and Abdullah 2016). On the other hand, objectives should be formed in chronological order in order to follow a systematic procedure. Following are the examples of goals and objectives in relation with Tesco.

Goals: The aim of Tesco is to ensure good customer experience by providing quality service to each customer.

Objective: Employees of Tesco need to focus on customer satisfaction in order to address requirements of customers in an efficient manner.       

Factors have to be considered while formulating strategic planning

Core competency

Core competency of a business refers to the factors that make a business unique and effective among its competitors (Waddington and Frick 2015). The factors may be the uniqueness of products, availability of products and reputation of the company. Following is the example core competency of Tesco.

Tesco has adopted product diversification strategy in order to increase product availability in global market. It would help the company to influence consumers’ perception in an effective manner.

In order to formulate an effective strategic plan, an organization needs to consider internal and external factors. The internal factors would be organizational structure, human resource, management and leadership style. On the other hand, the external factors are economic condition, climate and governmental law (Choi, Yeo and Ko 2016).  When it comes to the internal factors, an organization should understand the organizational culture, in order to develop efficient strategy. The workforce should be diversified in terms of cultural background. It would help the organization to achieve a set of objectives. Organizations need to change the internal aspects in order to change the overall organizational strategy. For example, CEO of Apple, Steve Jobs had changed the organizational culture and leadership style in order to avoid bankruptcy in 2001. On the other hand, Sony Corporation was unable to handle the external factors while implementing strategic planning (Omore 2015). The company had suffered damages due to earthquake and tsunami in Japan.

In order to conduct strategic planning, organizations rely on several techniques such as SWOT analysis, PESTLE analysis and Porter’s Five Forces Analysis. These techniques help to evaluate the internal and external factor that affects business strategic planning. Following are the effectiveness of the above-mentioned techniques of strategic planning.

SWOT analysis: This tool helps to understand current state of a business by investigating its strengths, weaknesses, opportunity and threats. Strengths identification helps an organization to take advantages to develop the brand (Elbanna, Andrews and Pollanen 2016). Understanding the weaknesses would help an organization to improve internal business process. Threats identification helps an organization to implement relevant strategy. Finally, identification of opportunity helps an organization to exploit the positive aspects of the business model. For example, one of the major strength of Tesco is that the company who provides value for money. Identifying this strength would help the company to maintain good brand image in market. When it comes to weaknesses, Tesco has low experience in some of the markets, which may affect profitability of the company. Identifying the drawbacks would help the company to develop cohesive business strategies.

Effectiveness of techniques for strategic planning

PESTLE analysis: This tool helps to investigate the external market forces that may affects business of an organization. This technique helps to evaluate political, environmental, social, technological, legal and environmental state of the business (Rothaermel 2015). Through the evaluation of above-mentioned factors, an organization would be able to understand the target market in an efficient manner. For example, an organization may face issues in international market due to adverse political situation. It is highly important to identify the probable issues in order to conduct feasibility check of the newly targeted market.

Porter’s Five Forces Analysis: This analytical tool helps to determine the type of market competition through analyzing suppliers’ power, threat of new entry, buyers’ power, and threat of substitute products, new entrance and market rivalry. For an example, buyers’ power may prevent the company to implement premium-pricing strategy. On the other hand, high bargaining power of suppliers may prevent the company from circulating the product in the market.

Strategic position of Tesco

In order to evaluate the strategic position of Tesco, SWOT analysis would be the most efficient tool (Ward and Peppard 2016). It would help to understand the internal situation and the current strategic movement of the organization in an effective manner. Following is the SWOT analysis of Tesco.

Strengths: Tesco is one of the largest retail chains in global market. The company has good brand image in domestic and international market. In this competitive market, the company has 6784 stores in global market, which is the key strength of the company. Moreover, the company has online retail platform through which the company has successfully established an online presence.   

Weaknesses: Tesco has a diversified product range including books, foods, insurance, furniture and financial services. Therefore, the company is facing profitability issue due to bad debt financial accounts and high value insurance claim by the households. Therefore, the company is unable to increase the profit margin with the current business model. 

Opportunities: The Company can expand in international market with new product range such as digital entertainment. Moreover, Tesco can introduce technological products such as Smartphone and tablets in order to attract consumers. Moreover, the company can expand in overseas market such as Australian market in order to increase business profitability.  

Threats: High competition is one of the major threats for Tesco. In global market, Tesco is the leading supermarket chain and therefore, competitors are implementing business strategies in order to affect business growth of the company.

Formulating a new strategy

Tesco is complying with the environmental policies in order to conduct sustainable business. The company has planned for reducing carbon footprint by 20% in order to attract stakeholders. The company is currently reducing waste in UK stores in order to improve environment quality (Kotler et al. 2015). The company is not only considered the external environment, but also focuses on internal environment of the company. Here, the company has shown a responsible approach towards its employees. Following is the environmental audit of the company by evaluating PESTLE analysis.

Political: Tesco operates in global market, and therefore; the company needs to comply with the global acts or legislations in order to conduct sustainable business (Lewrick et al. 2015). Political stability of the targeted country affects business process of the company in an effective manner.

Economic: Economic position of the targeted country influences business performance of the company (Johnston and Marshall 2016). During the time of recession, cost of leaving of the target market increases. Therefore, it has negative impact on the business process of Tesco. 

Social: The trend of bulk shopping in UK market has increased business scope for the retail companies including Tesco. Moreover, Tesco has a wide range of products through which the company can satisfy the targeted consumers.

Technological: Technological innovation influences business growth of Tesco in an effective manner (Ward and Peppard 2016). The company is rapidly improving its online presence in order to attract consumers in UK market.

Environmental: The Company needs to address the environmental issues in order to conduct sustainable business. Tesco has planned to reduce carbon footprint by 50% by the end of 2020.

Legal: Policies and legal procedures of government have a wide impact on business sustainability of Tesco (Strauss 2016). In order to conduct sustainable business, the company needs to comply with the legal policies. For instance, government has a code of practice through which the company needs to a minimum food quality.

In order to formulate a new strategy for Tesco, it is highly important to consider involvement of the stakeholders. Here, the company needs to understand the importance of customers, employees and investors while formulating a new strategy (Richards 2015). Following are the significance of the stated stakeholders while strategy formulation.

Customers: An organization should understand needs and requirements of the consumers before formulating a set of strategies. In this competitive market, the organizations need to develop customer centric strategies.

Strategic position of Tesco

Employees: In order to formulate efficient strategies, an organization needs to involve the employees. It would help an organization to encourage innovation within the organization. Moreover, the employees would be able to share their viewpoints while decision-making.

Investors: In order to implement the strategy, the company needs to communicate with the investors (Kacker et al. 2016). The company should explain the newly developed strategy to the investors in order to conduct the implementation process.

In order to attract consumers in competitive market, the company needs to develop an efficient pricing strategy. In retail industry, online advertisement and promotional advertisement strategy would be the most efficient business strategy. Following is the evaluation of the newly developed business strategies.

Online advertisement: The Company needs to build an online presence in order to attract consumers. The company should utilize the social media platform in order to promote products among the targeted consumers (Barrick et al. 2015). This strategy will help the company to promote the promotional offers, which will help to engage word-of-mouth marketing. This business strategy would help the company to reach to the maximum number of consumers within short span of time. In this competitive market, it is highly important to communicate with the consumers randomly. Social media advertisement would help the company to address quarries of individual consumers directly. Therefore, this strategy would help the company to gain competitive advantages.  

Promotional offers: Tesco already has the club-card loyalty program through which the company provides promotional discounts to the consumers (Muhammad and Abdullah 2016). Apart from that, the company should provide more promotional offers in order to attract consumers from competitive market. Promotional offer is one of the most effective and globally acknowledged marketing mixes. The company needs to introduce promotional offers for both new and existing customers in global market. It would help the company increase customer retention for both existing and new customers.

Appropriateness of alternative strategy

The strategies developed for Tesco would help the company to attract consumers in new target market. Online advertisement would help the company to reach to the maximum number of target market within short period of time. Apart from that, this marketing strategy would help the company to build an online presence in global market. As per the SWOT analysis of Tesco, the major threat that the company has is threat. Therefore, creating an online presence would help the company to maintain good brand image. In case of market entry, the company needs to communicate with the consumers directly (Waddington and Frick 2015). Online advertisement would help the company communicate with the consumers through social media platform. On the other hand, providing promotional offers to the consumers would help the company to influence buying behavior of the consumers in an efficient manner. This strategy is a globally acknowledged process for new market entry. When it comes to the promotional offers, this would help the company to gain competitive advantages. In order to influence buying behavior of consumers, it is highly important to increase value for money. Promotional offers would not only increase products value, but also it would provide extra benefits to the consumers. Therefore, this strategy is also justified in this context

The aim of the company is to expand business in global market. However, the company is conducting business is global market. The aim of the company is to expand the business by targeting cross border target markets. Two strategies have been selected such as online marketing and promotional offers (Choi, Yeo and Ko 2016). Both the strategies would help the company to influence buying behavior of new target market. Therefore, it can be said that the newly developed strategies are justified and effective for Tesco. In case of online advertisement, it would help the company to target a new customer segment and provide adequate product information to the customers within short time. The purpose of this strategy is to communicate with the consumers more efficiently. In case of new target market, promotional offers play a vital role. For example, this strategy was proven as effective for the biggest competitor of Tesco Walmart. Therefore, the selection of both the strategies is justified in terms of the company’s aim and objectives.

Responsibilities of the personnel who will implement the strategy

Leaders of an organization are solely responsible for implementing the developed strategies. In case of Tesco, the managers should develop objectives in order to implement the newly developed strategies. The employees would be responsible for executing the objectives within the preferred time (Omore 2015). It would help the leaders to initiate a team-working environment, which will further help to achieve overall goal of the company.

There will be two key project management teams such as SEO and marketing team for implementing the online advertisement strategy. In case of Walmart, the company has strong SEO team, and the team is continuously improving the online contents in order to create good online presence. In the strategy implementation of promotional offers, there will be two project management staffs such as market research associates and supervisor. The research associates will be responsible for understanding competitors’ activities and promotional offers. On the other hand, the supervisor will be responsible for creating effective promotional offers for the customers. In case of IKEA, the company has a team of research associates, who is responsible for identifying promotional strategies of the competitors

In order to implement the strategy of online advertisement, the company will need a team of SEO (Search Engine Optimizer). The team will be responsible for developing online advertisement content. Apart from that, the team will be responsible for communicating with the consumers directly (Elbanna, Andrews and Pollanen 2016). The marketing team will be responsible for communicating with the customers. Here, the company needs both physical and financial resources. The company would require financial resources for the online advertismnt platforms like Facebook and Twitter.  On the other hand, in order to provide promotional offers the company would require a vast market research. Here, the company would be able to understand the promotional offers through which competitors are influencing consumers’ buying behavior. Therefore, the market research associates would be the physical resource for the company. Apart from that, in order to provide promotional offers, the company would require to reduce product price. That would require a financial resource, as the company need to reduce price from the market price. The market data would be the most relevant resource for implementing this particular strategy.

In order to achieve organization goal, an organization should develop the objectives through SMART objective framework. Here, ‘S’ stands for specific, which helps the organization can build specific objectives. In order to implement cohesive strategy implementation, specific objectives set the required bench market. For example, it can be a particular financial figure that an organization is planning to achieve. ‘M’ stands for Measurable, which helps an organization to measure feasibility of the framed objectives (Lewrick et al. 2015). This tool would help the company to measure the successfulness of the framed objectives. ‘A’ stands for Attainable, which helps an organization to improve skills and abilities for achieving the goal. In order to implement successful strategy implementation, it is highly important to understand the required resources. For example, it can be the financial and physical resources for implementing the strategies.  ‘R’ stands for realistic, which helps an organization to build realistic objectives. The objectives framed for achieving a particular objective should be realistic as per market environment. It helps an organization to achieve the framed objectives within the preferred deadline successfully. ‘T’ stands for timely, which helps to achieve the objectives within a specific time. In order to fulfill requirements of successful strategy implementation, an organization should each objectives within a specific time. Therefore, it is important to make the objectives time specific in order to improve implementation procedures of strategies.

Reference list

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