Strategic Management Models For Organizational Operations

SWOT analysis

Strategic management based analysis is mainly done in an organization in order to understand the environment in which it is able to operate. The tools related to strategic management are thereby helpful for the organizations in order to analyse the industry and the areas in which they operate in an effective manner. The planning related to strategic management is thereby done by the organizations in order to develop effective strategies for organizational operations (Barros, Hernangómez and Martin-Cruz 2016).

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SWOT analysis can be considered to be a strategic management based tool which can play a major role in the proper identification of the place of the business in an industry. The four major factors that are thereby analysed with the help of this tool mainly include, the strengths, the weaknesses, different opportunities and major threats. The development of an effective strategic plan can also be considered to be a role that is thereby played by SWOT model (Daspit et al. 2017).

The major advantage that is provided by the model is based on the ways by which the position of the company can be detected in an active way. The different aspects of the organization are also provided in an effective way with help of the four factors of the SWOT framework. The strategies are thereby developed based on the position which is formed by the business in the industry.

The disadvantages of the model are thereby based on the ways by which the changes can take place in the internal factors of the company. This can play a key role in the credibility of the results which are provided by the analysis (Demir, Wennberg and McKelvie 2017).

The SWOT analysis of Woolworths will play a key role in the methods by which the company is able to develop its future strategies in an effective manner. The position of the organization is provided by the analysis with the help of SWOT framework. The strategies can thereby be developed in an effective manner (Demir, Wennberg and McKelvie 2017).

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The PESTLE analysis based framework can be used in an effective manner by the organizations before they plan to enter a new country or area. The different factors which are thereby analysed with the help of this framework mainly include, the political situation of the country, the economic situation, social factors, technological development, legal concerns and the environmental concerns. The proper analysis of these factors are thereby able to affect the ways by which the organizations can develop effective entry based strategies (Durand, Grant and Madsen 2017). The technological and economic environment is also able to affect the ways by which the company is affected and their strategies are developed. The external environment based factors are thereby able to help the ways by which organizations cam develop their strategies in any industry.

PESTLE analysis

The overview of the external environment which is provided by the PESTLE framework is considered to be an important factor and advantage of the model. This overview plays a vital part in the operations of the organizations in new countries or market areas.

The disadvantage on the other hand is based on the ways by which fast changes can take place in the external environment. The model thereby needs to track the changes effectively in order to maintain its credibility (Dyer et al. 2015).

The PESTLE analysis of Tesco can provide an overview of the country in which the company can develop effective entry based strategies. The strategies can thereby play a key part in the methods by which Tesco can develop its effective place in the retail industry of another country.

The proper analysis of the five forces is considered to be a major factor which can affect the prices of different services and products which are offered by the firm. The industry in which organizations can operate in a profitable manner can play a major role in the revenues and profitability. The major areas and factors which are thereby considered in the five forces framework include, bargaining power of the buyers, bargaining based power of the suppliers, threats related to presence of substitutes, threats related to the entry of new organizations and the levels of rivalry (Dobbs 2014). These forces are thereby able to affect the revenues of the company and the methods by which prices of different products are decided. The industry based forces are thereby highly important for the types of services which can thereby be offered to the customers.

The major advantages which can be provided by the model are based on the ways by which the position of the industry can be analysed effectively. The industry of operations of the company can thereby be analysed effectively with the assistance of Porter’s framework.

The subjective nature of the analysis is another major factor that can act as a disadvantage of the Porter’s framework. This framework is always not able to provide an effective picture of the entire operations of organizations in the industry (Engert, Rauter and Baumgartner 2016).

The Porter’s five forces analysis of Telstra is able to provide a study of the automobile industry in an effective way. This is further helpful for the company to understand the industry in which it operates and further develop strategies.

Porter’s Five Forces

The Porter’s generic model can be used in an effective manner in order to decide an effective growth based strategies of modern organizations. The growth based strategies which are thereby applied by the company are built on the methods by which they are able to increase their profitability based levels. The organizations thereby need to decide the strategy which they wish to implement based on the needs and demands of consumers. The levels of competition in the market is thereby able to play a major role in the effective processes of the organizations after implementation of growth based strategies (Ethiraj, Gambardella and Helfat 2018).

The first generic strategy which can be implemented by the modern companies is termed as the broad differentiation strategy. This strategy is mostly based on the quality of products that are offered to the consumers irrespective of the prices. The company thereby aims at developing a major differentiation in the market in comparison to the others in the industry.

The second generic strategy is based on the cost leadership that has been obtained by the company in the industry. This strategy is based on the lowest prices which are offered by the company to customers. This helps the company to develop a leadership position in the industry based on the prices of products and services. The strategy is thereby helpful for the company to create an active place in the industry with the help of lower prices (Frynas and Mellahi 2015).

The growth strategies are thereby able to play a significant part in the ways by which the company is able to develop a unique place in the industry with the help of its services and products.

Example Porter’s Generic strategies model

Apple uses the broad differentiation strategy and Woolworths uses the cost leadership strategy.

Conclusion

The discussion in the essay has been able to depict that the different models are able to provide an effective picture of the internal and external environment of the organizations. Further, the industry of operations can also be understood effectively. 

References

Barros, I., Hernangómez, J. and Martin-Cruz, N., 2016. A theoretical model of strategic management of family firms. A dynamic capabilities approach. Journal of Family Business Strategy, 7(3), pp.149-159.

Daspit, J.J., Chrisman, J.J., Sharma, P., Pearson, A.W. and Long, R.G., 2017. A strategic management perspective of the family firm: Past trends, new insights, and future directions. Journal of Managerial Issues, 29(1), p.6.

Demir, R., Wennberg, K. and McKelvie, A., 2017. The strategic management of high-growth firms: a review and theoretical conceptualization. Long Range Planning, 50(4), pp.431-456.

Dobbs, ME 2014, ‘Guidelines for applying Porter’s five forces framework: a set of industry analysis templates’, Competitiveness Review, vol. 24, no. 1, pp. 32–45.

Durand, R., Grant, R.M. and Madsen, T.L., 2017. The expanding domain of strategic management research and the quest for integration. Strategic Management Journal, 38(1), pp.4-16.

Dyer, J.H., Godfrey, P., Jensen, R. and Bryce, D., 2015. Strategic Management: Concepts and Cases. Wiley Global Education.

Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate sustainability into strategic management: a literature review. Journal of cleaner production, 112, pp.2833-2850.

Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2018. Theory in strategic management. Strategic Management Journal, 39(6), pp.1529-1529.

Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press, USA.