CLP’s business strategy

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This assignment will aim to address basic issues related to the strategic management of various business organizations. It will also critically analyze various theoretical models such as, the Porter’s model of five forces, and its application to provide a strategic business plan, which is practical for the companies involved. The assignment will also take a case study like approach to the effectiveness of management of Microsoft by Satya Nadella by performing an analysis of the strategy employed by him. The assignment will also provide recommendations to the CEO of Sony Corporation in order to overcome the poor business conditions that the company has experienced in the last 5 years. It will thus provide a recovery plan for the company to generate profitable business in the market.

According to the Porter’s model of five forces, the five factors influencing marketing competition for an organization are the threat of new entries into the market, threat of substitutes, bargaining power of customers, bargaining power of suppliers and the rivalry, which exists in the industry in which the company operates.  Now, the business strategy followed by the CLP group based in Hong Kong consists of three pillars, such as, value towards the consumers, proper return to the shareholders and providing social as well as environmental benefits (Yunna and Yisheng 2014). As CLP is an electricity supplying company, therefore, its primary target is to provide value to its consumer bas by supplying high quality electricity with no power cuts or interruptions, thus ensuring a smooth flow of electricity within its wide customer base, which spreads across Hong Kong, Mainland China, India, Australia and South East Asia. By providing such a high value to its customers, the CLP group eliminates the threat of new entrants along with the probability of bargaining of the customers. It does so by supplying high quality and uniform flow of electricity supplied by the company is unrivalled as well as reasonably priced, which ensures customer retention, and thus, it eliminates both of the above factors among the Porter’s five factors (E. Dobbs 2014).

The second most important pillar in the three-pillar structure of the CLP group’s business strategy is making proper returns to the company’s shareholders. This strategy strengthens the professional bonds between the company management and the shareholders of the company, and thus in turn, helps to somewhat curb the cutthroat rivalry in the power generation and supplying industry in Hong Kong. In addition to that, the threat of substitutes is also reduced by CLP group’s high quality and uniform service of providing electricity, as any substitute for electricity is both very difficult to obtain as well as much more costly for the consumers. Moreover, the third pillar of the business structure of the CLP group is to provide social along with environmental benefits, which in turn, minimizes the threat of substitutes as their service is much more environment friendly in comparison to any other substitutes of electricity.

A case study of the effectiveness of Satya Nadella as the CEO of Microsoft

Finally, the marketing strategy of the CLP group is to ensure that its product reaches out to the core sector of the consumers. This section of the consumers is distributed all through Hong Kong, South East Asia and India. Such a marketing strategy ensures that the CLP group grows its customer base gradually, thus expanding to even more territories (Rothaermel 2015). On the other hand, the CLP group also focuses heavily to build as well as maintain a strong network of suppliers of raw materials to the company. Hence, it reduces the risk of bargaining by the suppliers of the materials. In this way, the CLP group by employing a three-pillar structure creates a sustainable market competition according to the porter’s five forces of the market.

When Satya Nadella was appointed as the CEO of Microsoft, a few months later he declared his strategy towards the future of the company to be based on cloud computing, productivity and platforms. H also declared that Microsoft would build its future by focusing heavily on the mobile first world along with focusing on a cloud computing first world. According to Satya Nadella, productivity would increase rapidly if the devices as well as the services of Microsoft Corporation would focus more on the cloud-computing platform of Microsoft (Marais 2018). In accordance with this vision, Satya Nadella developed the Microsoft Azure cloud platform of Microsoft for providing a much more widespread service in the world of cloud computing.

Microsoft Azure was more developed to build, manage as well as test the applications along with the services by employing a globally spread network of data centers managed internationally by Microsoft. Third party servers can also employ the services of Microsoft Azure by applying to use the cloud platform (Persico et al. 2015). This innovation in the cloud-computing platform by Satya Nadella helped Microsoft to gain a significant edge in the world of cloud computing, which in turn helped Microsoft to gain a bulk revenue in the year following the appointment of Satya Nadella as the CEO of Microsoft surpassing stiff competition from Amazon Web Service and IBM. Satya Nadella also employed transformational leadership strategy in order to grow further their business (McCleskey 2014).

Sony Corporation has had one of the biggest upsets in recent memory when it expected to earn a profit of $30 million, and ended up incurring a staggering loss of about $110 million in the past five years. In addition to that, the company was forced to sell its subsidiary company the M3, its US head office building along with its Tokyo NS building in Shinagawa. Sony was also forced to let go its share of DeNA. The primary reason behind Sony Company’s downfall can be traced back to the year 2003 when Sony failed to link up its digital platforms despite having more innovational lineup than Apple. The main attribute towards this failure was given to poor corporate governance of the company. It was reported that, there was insufficient balance in the company stakeholders, such as, the shareholders, the consumers, the suppliers and the financiers (Wallace and Webber 2017). In addition to that, the management also did not perform necessary innovations in the marketing department of the company. Moreover, Sony Corporation released their products without any proper market segmentation and identification of its target market.

A recovery plan for Sony Corporation

The other cause behind Sony Corporation’s poor conditions in the market can be attributed to a serious mismatch between Sony’s strategy and its ability to execute those strategies. The company lacked any management prowess when it needed it the most (Sekaran and Bougie 2016). The company released a lineup of software products, which did not get any serious marketing opportunity due to the inability of the management staff of Sony Corporation. Many such strategies were planned in order to capture the market. However, the management never executed those planned strategies in order to market their products. This inability of the company led Sony Corporation to incur severe losses in a time span of 5 years (Sahebjamnia, Torabi and Mansouri 2015). This is the major cause behind Sony Corporation not getting a single hit product in the market in the last 5 years.

The primary recommendation for Sony Corporation is to restructure its overall marketing strategy, which it currently employs in order to promote its products. Sony can also gain from releasing products with a considerable time gap in between any two of them. This will help the company to assess its executive ability in terms of marketing, and will help them to examine their current product quality and the rate of acceptance of their product before releasing the second product. On the other hand, restructuring the marketing strategy from scratch will eliminate all the previous fallacies, which will be much difficult to erase otherwise. Restructuring the marketing strategy of the company will benefit the company with identification of its market segmentation along with its target market as well.

The other recommendation for Sony Corporation to make a rapid turnaround in the industry is by conducting a broad market survey. Such a market survey will result in the understanding of the requirements of the public and shed light on how to meet the demands of the consumers. In addition to that, the survey will dictate in which manner the products can be promoted in order to reach their respective target markets as well. The next recommendation will be for Sony Corporation to strengthen their corporate governance by regular group meetings among the various stakeholders of the company. For an instance, regular discussions will clear all the confusions between the stakeholders, which will amend the relationships a lot among the stakeholders of the company. Further, misunderstandings among the stakeholders can also be solved from such discussions. Moreover, apart from the group discussions, there can be programs to assess the current standings of the products in the market as well as to determine the future steps of the company with an aim to generate more market value for the products of the company.

Another such recommendation for the CEO of Sony is to rebuild its core market strategy. This can be achieved by market segmentation and then going through a new process of identification of their current target market. Following this step, Sony can restructure its market strategy by understanding the demands of its target market as well as by modifying their products according to these market demands. This strategy will also help Sony with attaining customer satisfaction, which it had lacked for the past five years. Attainment of customer satisfaction will also boost the brand image of Sony, which has been hampered due to the lack of it.

It is also worth recommending that, Sony should focus heavily on producing diversified and local content. This means that, Sony should pay significant attention on its music and entertainment wing for producing content which will have a diversified nature as well as attract its core audiences, like that of Japan in order to enhance its market in the entertainment industry. However, Sony has until now focused on creating exclusively Westernized versions of local content, which is also a part of the cause of its recent downfall. By producing more of the local content, Sony can look forward to capture the local market with its content and brand image.

Another recommendation to the CEO of Sony is to modify the Research and Development wing of the organization, with an aim to enhance both the user interface design as well as the product design. Although Sony’s research team is sufficiently well versed in the technical aspects of the company’s products, it does not pay enough attention to the product- user interface. On the other hand, the Japans giants such as Samsung have consistently thrived in order to enhance their product-user interface, resulting in their current publically acclaimed status. In addition to that, from a marketing perspective, a user unfriendly product is expected to degenerate its market acceptability over time. That is what happened with Sony. Therefore it is recommended to make the products of Sony more user friendly in terms of having a customer friendly interface. It is also recommended that, Sony should hire more foreign researchers for their R&D other than Japanese, in order to diversify their ideas regarding developing the product interface.

In addition to these, it is also recommended that, Sony should also consider an appropriate reorganization plan. This reorganization plan will primarily focus on the HR department with an aim to reduce unnecessary staff and to hire new employees with more efficiency. The said plan must also pay attention to the consolidation of the production plants of Sony. Further, the reorganization plan will focus on achieving a combination of engineering techniques along with effective customer servicing, thus ensuring proper technical aspect of the products along with keeping notice of the consumer demands. The expected outcome of such a plan will affect both the productivity as well as simultaneously generate considerable customer value for the Sony Corporation.

Therefore, it is expected that, the above recovery plan will successfully revive the Sony Company and will help the company to overcome the poor status of it in the past five years.

Tesco is an UK based multinational general as well as groceries merchandise retail shop headquartered in Hertfordshire, England. It is currently the third largest retail shop on the planet, in terms of annual profit generated. Tesco is also the ninth largest in terms of its total revenues. Tesco’s expansion to the global market and its subsequent gain in global popularity skyrocketed in the year 2001, when Tesco involved itself in international grocery industry through the internet, by acquiring 35% stakes of GroceryWorks.

However, in the financial year of 2015-16, Tesco incurred a staggering loss of 6.4 billion pounds, which was the biggest margin of loss by any UK retail company until that time. The estimated cause for this huge downfall was Tesco’s big write downs on its property value along with its live stocks. It is being estimated that, this condition may get worse in the following years. Therefore, Tesco runs the huge risk of succumbing to another downfall in the recent years (Council 2016). Because of this, a risk management strategy would be prepared, which will address all the potential issues that may cause the expected downfall and also its remedies as well.

Any risk management plan firstly aims to perform any one of the four operations as a means to deal with the probable risk. These four operations are Avoid the risk, Control the risk, accept the risk and transfer the risk (Sadgrove 2016). In this risk management plan, the primary aim will be to avoid the risk, as the company cannot afford to suffer another downfall in the recent years to come. This risk management plan will follow the classic structure of a five step risk management model. The five steps are identification of the risk, performing an analysis of the risk, ranking of the risk, probable treatment of the risk and the reviewing of the risk.

Identification of the risk: Tesco has suffered a huge loss of 6.4 billion pounds in the year 2015. It runs a big risk to succumb to a similar loss in the recent years to come. The company cannot afford any such loss of any magnitude, and hence, the mere possibility of such a loss is a potential threat, which poses as a serious risk by the company. The risk may arrive from a variety of sources, such as the devaluation of the property along with the stocks like in 2015, or even due to the underestimation in the internal threat of the company, such as, lack of proper planning to market their online products (Hopkin 2017).

An analysis of the risk: After the risk is identified, it should be analyzed in order to comprehend the consequences that it might hold. The risk which is involved in this case has the severe consequence of making Tesco incur a similar or even a greater loss in the recent years. The estimated loss due to such a risk is about 3-7.5 billion pounds.

Ranking of the risk: The ranking of the risk is achieved by its evaluation in terms of its possibility to occur as well as its degree of consequences. In this case, the possibility of Tesco incurring another big loss in recent future is significantly high. This is because, Tesco has not yet been able to device the ways in which to avoid similar risks in the future. Tesco is still facing the same problem of its devaluation of property and stocks, which caused its huge 6.4 billion dollar downfall in the first place. Moreover, there is a still internal conflict among the marketing section of the company, which makes the risk even more probable. Because of these facts, the risk in this case can b said to be of a high rank.

Treatment of the risk: The procedure for the treatment of the risk involves steps which may be used to respond to the risk, prior to its occurring, that may result in the minimization or at last reduction in the probability of the risk to happen. The major treatment strategy in this case will be to avoid the occurrence of the risk, as Tesco cannot afford to succumb once again to such a huge loss.

The primary method to avoid any risk is to prevent its occurrence by avoiding the potential circumstances which might result in the risk (Aven 2016). In this case, the risk can be prevented by avoiding the devaluation of property of Tesco and its stocks and increasing the internal cooperation among the marketing department through regular assessment.

Review of the risk: This step is performed in order to monitor the probability of the risk occurring in anytime in the future. In this case, the risk will have to be monitored even after avoiding it, to ensure it does not present itself in the future.

Conclusion 

Therefore, from this report it can be concluded that, CLP follows the three pillar structure of value towards the consumers, proper return to the shareholders and providing social as well as environmental benefits in order to provide itself with sustainable competitive advantage. This strategy of the CLP group has been supported by Porter’s five forces analysis. In addition to that, it can also be deducted that, Satya Nadella, the CEO of Microsoft, is effectively managing the company through employing transformational leadership strategy and his stress on developing the cloud computing platform of Microsoft, called the Microsoft Azure. Moreover, from this report, it can be concluded that, Sony’s primary flaw because of which it has performed noticeably poor in the past five years are mainly imbalance in the stakeholders of the company, inability of the company to execute ideas into actions and lack of identification of its target market. Finally, it can be concluded that, the risk management plan for Tesco involves the avoidance of the risk by preventing the potential circumstances which may cause that risk to happen, such as, further devaluation of the property and lack of internal harmony.

References 

Aven, T., 2016. Risk assessment and risk management: Review of recent advances on their foundation. European Journal of Operational Research, 253(1), pp.1-13.

Council, N.I.S.C., 2016. Risk Management Strategy.

Dobbs, M., 2014. Guidelines for applying Porter’s five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), pp.32-45.

Hopkin, P., 2017. Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers.

Marais, J., 2018. Microsoft’s bet on a future in the cloud. finweek, 2018(03 May), pp.30-33..

McCleskey, J.A., 2014. Situational, transformational, and transactional leadership and leadership development. Journal of Business Studies Quarterly, 5(4), p.117.

Persico, V., Marchetta, P., Botta, A. and Pescapé, A., 2015, December. On network throughput variability in microsoft azure cloud. In Global Communications Conference (GLOBECOM), 2015 IEEE (pp. 1-6). IEEE

Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.

Sadgrove, K., 2016. The complete guide to business risk management. Routledge.

Sahebjamnia, N., Torabi, S.A. and Mansouri, S.A., 2015. Integrated business continuity and disaster recovery planning: Towards organizational resilience. European Journal of Operational Research, 242(1), pp.261-273.

Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach. John Wiley & Sons.

Wallace, M. and Webber, L., 2017. The disaster recovery handbook: A step-by-step plan to ensure business continuity and protect vital operations, facilities, and assets. Amacom.

Yunna, W. and Yisheng, Y., 2014. The competition situation analysis of shale gas industry in China: Applying Porter’s five forces and scenario model. Renewable and Sustainable Energy Reviews, 40, pp.798-805.