Category: Strategic Management

A company’s activities in planning, monitoring, analysis, and assessment of its resources are its strategic management. Therefore, for such an organization to be profitable in the long run, its strategies need to change with the changing operating environment. As such, strategic management requires a company’s management team to be constantly aware of their internal and external changes to address them effectively. This paper will discuss the strategic management measures taken by Reyes Fitness Centers, Inc.

In May 2009, John Reyes launched Reyes Fitness Centers, Inc. (RFC). The first center was a success and included a wide range of services: exercise classes workout equipment, an outdoor pool, personal trainers, daycare as well as a restaurant. From this center, growth for RFC was rapid for the next three years. By end of 2012, the company was grossing $51 million and $1 million in revenues and net income respectively. At this point, John Reyes had managers to oversee the day-to-day activities, which prompted the board to hire other senior management team members and a CEO, Mike Lowe. Focus on member enrollment and retention were stressed upon by Lowe. With 20 years of experience in the fitness industry, he understood that to achieve this goal, his staff would have to proactively align their work with customer retention in mind. At the time, member retention was 20% lower than the industry average, prompting Lowe to maximize Lori Patrick’s HR expertise.

Issues

One of the major causes of low customer retention numbers is that most employees do not know their specific role in retaining numbers. Though they know it is important, a survey of the employees highlighted that most were only aware that the strategy was to make money. Besides, it was not clear to them how they specifically contributed to FRC’s strategy. This then would be the likely reason why member feedback reported low customer service.

Another cause of low retention levels at RFC is its work culture. As fewer people are aware of how they directly contribute to the company’s strategy, the result is that they do not accomplish this goal. Besides, to serve members well means that the organization needs to assess complaints and make necessary adjustments. Currently, no formal data has been collected, yet the expectation is to have 90% member satisfaction. With no tracking mechanism in place, this would be hard to achieve.

Alternatives

Lori identified that some strategies within the company were working towards achieving the company’s goal to bring in new members and retain older ones. Vice president of sales and marketing Alex Garcia was doing this through special promotions and advertising. Furthermore, he motivates his sales representatives through and an incentive compensation program that has gone a long way to motivate them.

Performance goals are currently focused on job description activities. According to Lori, they should be focused on results that contribute to customer retention. Staff should be aware of their responsibility to ensure customer retention and be equipped with the right customer service training and skills. Besides, HR has the mandate to ensure that employees are aware that member retention is a part of their job.

A culture change would be essential in ensuring that customer retention is understood and implemented by everyone at RFC. For this to happen, it needs to be a core value within the company and can be realized by managers incorporating retention activities into the staff’s annual performance plans. Additionally, to ensure that employees are motivated throughout the process, an analysis of the compensation system should be done. As suggested by Lori, profit-sharing programs as those undertaken by other organizations could be implemented. When employees are fully aware of what the company’s strategy is, they can relay this to customers. This results in more customer acquisitions and retention, as well as more profit.

Recommendation

It is clear that for RFC to achieve its strategic goal, employees will play a major role. Therefore, arming them with the right information, skills and motivation will make the process quicker. The business strategy should be more descriptive for staff to understand their role in achieving it. Once they are aware that they play a central role in communicating the same to members, they will be in a position to offer better customer service. Additionally, there is a need to have an individual with the primary responsibility for ensuring retention measures are taken. As customer feedback is important for RFC, creating avenues in which to receive, analyze and manage such information is of utmost importance. Therefore, RFC should come up with a system where such information is collated to gauge the effectiveness of the strategy. Further, the company should increase advertisements and special promotions efforts in a bid to have more new members. As this strategy is already working, it would be a profitable avenue to explore.

For any company to succeed, managers need to realize a few key factors. One of these is the ability of employees to align their work with the organization’s objectives. When staff members are well informed on how their input is detrimental to the success of the company, they feel the need to do their best. Similarly, when employing new strategies as a result of changing business environment, employees must be on board. Besides, as seen in RFC’s case, when employees are unaware of their impact on the company strategies, performance goes down. It is no wonder that customers complain about customer service quality. Despite having all the right equipment and a good strategy, more factors need to be considered. Compensation strategies are a good way to motivate employees and increase job satisfaction. Furthermore, a motivated employee is more productive and open to ideas. It is therefore imperative, that for strategic management to be effective, both managers and other staff should be aware of their roles in affecting an organization’s strategies.

Executive Summary

The following study tends to discuss a strategic plan of management for Apple, Co. A prominent smartphone company. The discussion initiates with a transitory introduction of the company followed by the external drivers which influence the state of the company. Afterwards, the competitive environment of the company is discussed which is further justified by Michael Porter’s five forces. Afterwards, the internal analysis is conducted followed by VRIO analysis. Finally, on the basis of thorough discussion is done on company adequate recommendations along with the conclusion.

Introduction

Apple is renowned as an innovative company and a giant in the field of technology that has conveyed numerous ground-breaking gadgets to the market like iPad, iPod and MacBook (Ansoff, et al., 2019). Apple has made a noticeable comeback in recent years. Whereas the industry of computers has been witnessing a downfall in these years, Apple yet again, stated ascending the graphs to re-establish its market position. Along with elevating sales of smartphones, the MacBook sales of Apple have been equally increasing since MacBook Pro’s release. According to the reports of 2017, Apple has a net sale of 29 Billion, making Apple one of the world’s esteemed and prominent brand listed by Forbes (Ansoff, et al., 2019).

Drivers of Changes

A driver of change is either an external or internal factor that alters an organisation. The factors of change can include political, economic, social and technological factors. Such external factors can be calculated by using PEST analysis since it is a valued strategic approach for recognising the size, position, growth, viable operational methods, and classification of decline and development of a business (Wheelen, et al., 2017).

Apple is known as the marketing company having a digital asset and worldwide provider of smartphones. It is the company in its own league, which produces and executes both hardware and software. It permits the buyers to purchase and share application and other multimedia content through Apple devices, through the use of a platform of selling media known iTunes (Chang, 2016). Apple’s CEO (Tim Cook), in 2012, shared that the company is very enthusiastic because of the sales of the iPhone, which was approximately 12 million sales of iPad and almost 35 million iPhones. Furthermore, he stated that the new pioneering iPad will be soon released with innovative characteristics which can only be provided by Apple (Mathooko and Ogutu, 2015).

Furthermore, the sales of Mac, iPhones and iPad have ascended by 7% and 188%. In contrast, the sale of iPod descended by 15%. As compared to the number of Q1, 2012 the numbers of Q2, 2012 are considerably low as all the preceding records were smashed by apple as shown in the Figure below. Apple at that time sold about 15.43 million iPads, 5.2 million and 37.04 million iPhones (Zhao, et al., 2016).

The report of Q1 2012 revealed that in a rivalry with Samsung, Apple secured the 2nd place worldwide with a prominent growth of 8.8% of all the market of cell phone and 24.2% of the smartphone market globally. As shown in the table below (Rosenberg Hansen and Ferlie, 2016).

PEST Analysis

To recognise Apple’s operational directives, the potential of the business, and the situation of the future market, PEST analysis is used (Heracleous and Papachroni, 2016).

Political Factor

There are numerous issues that are unable to be regulated by Apple like; war against terrorism, geopolitical doubts, health issues, and working authority which can influence the global sale of Apple’s gadgets (Mathooko and Ogutu, 2015). In order to decrease the cost of operation Apple has subcontracted in various countries like China, the Czech Republic, Ireland, Korea and Cork. The likeness of Apple can be spoiled in the eye of dealers and purchasers, in the case of deferred manufactural operations (Rosenberg Hansen and Ferlie, 2016).

Economic Factor

The power of purchasing varies upon the economic state of the World. In light of the past few years, an increase in the rate of unemployment in numerous counties has affected the sales of products of Apple. An additional reason was increased in oil cost which surrounded the economy of the world with inflation (Chang, 2016). Due to the outcome of these factors, the power of people purchasing the product greatly reduced which impacted the Apple product’s sales because of the rushed prices. However, recently the economic state of the world along with the company is getting better and Apple has brought itself currencies that are foreign, making the revenue of Apple ascent in the market worldwide (Zhao, et al., 2016).

Social Factor

The 2 factors which have been on the front line of products of Apple during the course of their history are the quality and design (Wheelen, et al., 2017). Consumers are preferring to purchase the luxury gadgets and products because their power of purchasing has increased throughout the markets of the world and people are giving priority to the products of iPad, iPhones and iPad (Rosenberg Hansen and Ferlie, 2016). The industry of music is having a significant impact on the current generation. This factor also plays a part in ascending sales because of Apple’s high-quality music store iTunes. Consequently, Apple is currently an embodiment of modern and luxury lifestyle through social factors (Ansoff, et al., 2019).

Technological Factor

Apple is always at an advantage due to its enhanced technologies and unique innovative products. Apple invests its substantial sum in the field of development and research. For this reason, Apple is at number 1 ranking in the lists of innovative gadgets (Lockamy III, 2017).

Internal Factors

Strengths

• Apple’s chief strength is its unmovable position in the market and the loyalty of their consumers which gradually increases because of ‘Apple’s ecosystem’, which gives the company a head start in the competitive market. Secondly, Apple has a diversity of applications, software, and products which are interconnected and uphold each other. Thirdly, the release of iTV and other fresh products is expected to release soon (Zhao, et al., 2016).
• Apple’s resilient position in the market and the loyalty of customers are its main strong points. This is due to the unique and innovative ecosystem which Apple has created. This advanced invention of Apple enables it to be unbeatable in the market. However, this is not the only innovative product of Apple, moreover, it has a diversity of products and applications which are linked with each other (Chang, 2016).
• Apple has a streak of awards to its name, as the most renowned and prominent establishment in the world (Clarke and Boersma, 2017).
• At 2012’s ending, the cash which Apple held was $10 billion. Furthermore, the gross profit margin of Apple is significantly higher than its rivals and Apple has no debts.
• In 2012 apple was the second most valued brand of the world, having a value of $76.5 billion.
• Satisfaction of the customer is Apple’s top priority, the customers are in delivered top quality product awareness conveyed through trained and well-versed staff (Dolata, 2017).

Weaknesses

• The high price which Apple is offering is its main weakness because of the strong competitive market. Apple’s consumers can purchase a phone having the same specifications as Apple’s, at a significantly lower price (Lockamy III, 2017).
• The customers will be not be influenced enough if Apple is continuously decreasing the market shares. Furthermore, it will motivate the customers in not using Apple’s Ecosystem.
• Numerous companies around the world have accused Apple of defying their patent designs and furthermore, Apple was not able to defend itself against these accusations in court. Such scandals can decrease the status of Apple in the market (Hernández and Garcia 2018).
• Following the death of Steve Jobs, Tim Cook became the CEO of Apple, in 2012, which was the major and prevalent loss for Apple, Co. Afterwards, Scott Forstall and John Browett left the company as well resultantly putting an undesirable impact on the management (Rosenberg Hansen and Ferlie, 2016).
• The fact that in the tech market, the gross profit margin of Apple is unbeatable. However, because of the tough competition and increasing prices the company will not be able to keep its current margins (Lockamy III, 2017).

Competitive Environment

The fact that Apple is a huge industry having numerous products to its name is known globally. In terms of the smartphone industry and other products, Apple has the following main competitors: HP (Hewlett-Packard Company), Samsung, Nokia, BlackBerry and HTC. The following figure shows the competitors of Apple in the smartphone market and the gross profit margin, revenue, price earning, earning per share, and net income compared to its competitors (Castro, 2016).

Competitive Forces by Michael Porter

The following figure is about the Five Competitive Forces Theory given by Michael Porter. These forces define the competitiveness of any market industry. The following model aids in calculating the influence Apple has on its capability to compete with its rivals in the market (Clarke and Boersma, 2017).

Intensity of Rivalry

The intensity of the rivalry is the first force among five. This defines the concentration of the competition a company has with its rival. Apple has done wonders through conveying technical support, creating loyalty of customers, and production of products (Khan, et al., 2015). Hence, Apple is free from the fear of this factor because anything which is released by Apple is destined to be sold because of their strong groundwork. Moreover, this groundwork of Apple preserves its productivity without the need to produce superior products than rival tablets, Android phones and eReaders, who are selling their products at a low price (Clarke and Boersma, 2017).

Bargaining Power of Suppliers

The bargaining power of suppliers can reduce the profits of Apple by recognising supplies’ high prices. Therefore, the company is always on the lookout for fresh suppliers because the fact that Apple Company is continuously growing cannot be doubted (Zhou and Gupta, 2018). Fresh suppliers are allowed to get themselves registered on the website of Apple online, which in result convince the suppliers to reduce the bargaining power. Hence, Apple is able to reduce their bargaining power amidst a significant number of suppliers (Knott, 2015).

Bargaining Power of Buyers

In order to gain a majority of shares in the stock market, Apple has to take its consumers into consideration through a variety of segments like age, income and educational level (Khan, et al., 2015). Another factor is that the purchasers are quite sensitive in the measures of prices and can easily be distracted to another retailer. In the overall market of smartphone and tablet, Google is the leading competitor (Castro, 2016). This is due to that fact that Blackberry, which was once known as a leader of the smartphone market, now, only owns 1% of the market. Approximately 75$ of the industry’s profit is held by Apple (Zhou and Gupta, 2018). Hence, the chances of Apple users to switch to another brand are considerably low. However, Apple still has to be careful since companies like Nokia are slowly coming to ascension once again (Lai, et al., 2015).

Threat of New Entrants

Letting more companies enter the market clearly means that Apple will experience a decrease in its shares. Apple can generate profit and preserve its shares in the market through brand’s and product’s differentiation along with making a firm marketing strategy (Zhou and Gupta, 2018). A well-established company like Apple is not easy to compete by any company fresh in the market. The reason is quite vivid it is because Apple has esteemed imaging of brand, excellent customer services, perceived value, and most importantly the innovation (Clarke and Boersma, 2017).

Threat of Substitute Products

The threat of substitution of a product has two main factors, performance and price, which permits the customers to change the product. The substitution threat can be reduced and its percentage depends upon the loyalty of the consumer (Paik and Zhu, 2016). There is no company in the market which can offer the ‘ecosystem’ innovated by Apple. The main reason for the people to by iPhone is that they yearn for robust apps along with standards, furthermore, the other upgradability of Apple permits the customers to transfer content (Yusoff, 2018).

The sales of the companies have enhanced geographically, among this 1/3rd of the sales are from the US and 1/3rd are from Asia. Compared to Europe, having 22% of the market, these areas have a maximum expected growth in sales (Dolata, 2017). The market in Asia has significantly increased because Asia’s sales have upsurged twice the time since 2011. This suggests that the sales of the iPhone have increased by 85%. Furthermore, the growth of the iPad has ascended by 17%. This suggests a 132% increase in revenue. In contrast, the iPod and Mac were significantly low in sales as shown below (Yusoff, 2018).

Compared to its competitors like Google Android, shares of Apple have upsurged from 48% to 60% which far superior. The shares of Google have expanded from 15% to 19%. In general, the outcome was quite positive (Knott, 2015).

The level of equity had no effect on 45% of the high interest. Furthermore, without influencing it has augmented by 68% (Castro, 2016). The equity of the company may not ascend in future. It is due to the fact that the company has declared the repurchasing and dividend of the shares. The ratio of liquidity of Apple is 1:6, which is quite beneficial for the company and the excess money was $110,000,000,000 which has enhanced from $97,000,000,000 from Q4.

Conclusion and Recommendation

In short, The Apple, Co. is extremely innovative and the only company who took the innovation to a whole new level in contrast to the competing companies. These stances are usually considered to be significantly risky. However, Apple has been benefiting since the beginning when it comes to inventive products. Rigid and firm position in the market and unflinching loyalty of consumers have made Apple the tech-giant of the world. Furthermore, the closed ecosystem and various other user-friendly products have enabled Apple to stand apart from its competitors, having its own league. Apple is the most admired company in the whole world, which is an important factor. Whereas, it is also accredited to be the first business model having a sustainable music download system through iTunes and iPod. The fact that Apple is a lucrative company having expecting optimistic days, cannot be debated. However, the Apple should cautious in political and legal aspects which is due to the fact that in many countries Apple has a high price and it purchases the processor of application from Samsung, a fact which may give birth to problems.

References

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Business policy and Strategic management are guidelines defining how the scope within which decisions can be taken by the subordinates in an organisation while the latter is the course of action through which an organisation relates itself with environment so as to achieve its goals (Anjankumar). They are a set of decisions and actions resulting in the formulation and implementation of strategies designed to achieve a firm’s objectives.

In the case involving DSS Consulting, on being promoted to the position of Chief Operating Officer at DSS Consulting, Meg Cooke was tasked with new responsibilities and roles chief of them being to see DSS Consulting expand its client base from the traditional small school districts to larger districts in line with the new company policy of allowing new leaders to take more control over DSS and the new business strategy which they hoped would help improve revenue growth at the firm (Divekar). To achieve this, DSS restructured and consultants assigned to new cross functional teams responsible for marketing and delivering services to districts in their assigned regions. Chris Peterson was assigned the Southwest Region team as team leader and put together a team that she would work with to meet their objectives.

At the time Meg assumed her position, DSS was facing various challenges that had led to stagnation in revenue growth and new strategies were necessary to see a change in company revenue. She therefore took to a new business model with new policies and strategic management in lorder to help DSS gain strategic competitiveness in the market through value creating strategies that were customer focussed and creating value for customers(Michael et al. 2017 p 5). She allowed subordinates to deal with problems and issues without consulting her for decisions every time, and let the teams decide their areas of focus independently. Since DSS corporate strategies had changed along with the company vision and objectives

Chris and her team went on with their roles and responsibilities and completed their running projects before deciding on a new project to create a scaled down Planning and Budgeting system for their regular small districts. During the planning and development stage, Chris involved two superintendents of smaller districts who all had positive feedback on the system. The team also sought the help of specialists within DSS whenever they encountered challenges while developing their product however, they received little help as they were also focussing on their own projects. All through the project, Meg and Chris did not meet much as compared to other groups since Meg gave the team space to make their own decisions

On completion and beta testing of the product, Chris and Meg met to discuss the project. In the meeting, Meg seemed more interested in how the new system would be marketed to larger school districts given that they may not be interested in the system as it were. This shows that Meg was more concerned with how relevant the project was to the new company policy and strategy of focussing on larger districts to expand their revenue growth.

During the Monday morning meeting, Meg informed Chris of her decision not to go forward with their project citing lack of interest for their product in other regions, and her concern that the system would not interest larger districts. Although this did not sit well with Chris after her team and herself dedicated a lot of their time and energy on the project, Meg reacted as she did because the project did not fully comply with the new company policy and strategy to expand from their traditional small districts to larger districts and becoming a cross-functional, customer focused organisation(Ananjkumar). This decision was arrived at by Meg after evaluating the strategy Chris’ team had taken and concluding that it did not meet the immediate company goals as were(Kenton, 2018). Chris’ and her team’s product despite taking up a lot of time and resources did not meet the new company policy as it was still focussed on the smaller districts.

REFERENCES

1. Anjankumar. Business Policy and Strategic Management. Kunda College of Technology and Management. Retrieved from https://www.scribd.com/doc/45606679
2. Kenton, W. (2018). Strategic Management. Retrieved from https://www.investopedia.com/terms/s/strategic-management.asp
3. Divekar, S. Business Policy & Strategic Management. Retrieved from https://www.slideshare.net/mobile/share/business-policy-strategic-management
4. Michael, A., Duane, R., Robert, E., (2017). Strategic Management; Competitiveness & Globalization.

Strategic Management

To begin with, tourism is one of the largest industries in the world contributing 6 trillion dollars annually into the global economy. World travel & tourism council, 2011 predicted that tourism could create 69 million jobs in the Asia and Mexico. Tourism has been part of this world from the very beginning. People have been travelling from one place to another for leisure and fun. And now with modernization more people can travel in lessor time. This thing has made this industry worth trillions of dollars. From sea routes to airlines everything advanced now. (Jain, page 510, 1992). Europe has always been the most hotspot place for travellers for many years even in 2019 top 2 countries with most travellers were France and Spain (Romecitynow, 2020).

Moreover, as stated by Thompson, Strickland and Gamble that the meaning of Strategic management is the main plan of a business, in which they decide how to keep growing as a organization, stay competitive in the market, how to reach the targets in order to enhance the organization’s performance and to keep attracting and satisfying customer’s needs (Tapera, 2014).

As well as, the concept of management needs to be understood as it’s a big challenge in tourist organizations. Trends in global market changes the perspective of tourist management in the dimension of strategy of new models in tourist organizations. (Maric and Page 427, 2012).

The benefits which can be obtained from strategic management helps encounter planning process. Key factors for this are internal and external environmental issues which effects organization directly and indirectly and can change the way an organization operates. Strategies make sure that organizations are well set on its goals and objectives with a guideline.

Moreover, it provides a path for employees of that organization to follow. Without such strategies and guidelines organization cannot determine their routes or implement any policies in the organization. This could further affect their survival in the industry.

Due to this process of strategic management all the loop holes and questions could be answered in a much systematic way. Thus, they will get a much clear picture of their routes.

Evolution of Strategic Management in Tourism & Hospitality

In recent years, tourism and hospitality management has gained significant importance and development and has become important part of people’s life. Attractive places and promotional spots have gained enough famous that people don’t just go for enjoyment but to spend their best time of life. This has increase competition in global market of tourism. (Getz and Page 593, 2016).

The management is a crucial innovation which is a modern revolution in tourism industry. In such way managements try to overcome the hindrance in the industry which can cause the problem for people. Its importance can be understood by the complexity of the industry and competition in the global market.

Further, this leads the people and the organizations towards information and knowledge. It helps maintain the coordination within the organization effectively and efficiently (Robbins et al., 2009:10).

It helps win the market and increase the profit with significant percentage. Organizations must strategize plans for long term future in order to compete and act accordingly with changing market. (Banja, page 120, 2016).

Importance of Strategic Management in Tourism & Hospitality

The primary purpose of strategies is to have a guidance and be competitive in the market. With dynamic changes in domestic and international market it is impossible to survive without a strategy. Even if the data of tourism industry is put together of last decade, significant changes can be observed.

Furthermore, sometimes strategies could be problematic as well due to changes in the market. Internal and external factors affect businesses in different ways and organizations can never predict them. The best way is to stay updated and be flexible with the strategies so they can change easily.

In this context, Entouristik can develop strategies as well to effectively grow their business by changing market by implementing effective strategies.

Strategic Marketing

Strategic marketing is all about developing a marketing strategy for an organization. Primary focus is on the competitive and consumer advantage a business can has in the market. Strategic marketing is different from strategic management although there are some similarities. Strategic marketing helps identifies the market to compete and survive on the basis of advantages. Furthermore, Hambrick And Fredrickson (2001) stated that marketing strategies has five following elements:

• It deals with where organization plans to be active
• How it will get there
• How it will succeed in the marketplace
• What the speed and sequence of moves will be
• How organization will obtain profit

However, it has a resource and budget limitation under which it has to be operated. Strategic marketing can be for short term and long terms depending upon the situation and resources available. But with this strategy company can analyse its performance and make changes (Jain, page 510, 1992).

Importance of Strategic Marketing in Tourism & Hospitality

As mentioned earlier, tourism and hospitality industry is the world’s biggest industry is not just because of customer’s satisfaction or desire but because of the marketing strategies which have been implemented by the businesses to attract customers. One of such strategy is marketing strategies which helps sustain the competition in the market and grow with a tremendous speed. Everyday millions of ads and marketing tools are used to attract customer to travel different places. From airline to hotels to restaurants and different destination spots. People are attracted and choose these things to travel.

Tourist organizations have adopted this strategy not only to grow but to meet the challenges of changes markets. Organizations can define such marketing strategies as “integrated pattern of decision making”. Crucial decisions are made in this strategy which can easily affect the market in positive and negative manner (Varadananjan, 2010, p. 128).

As experts suggest that strategies which are driven by market and customer preference should be the starting point of any business (Cravens & Piercy, 2009). Thus, every market and customer factor have to be considered in making strategy like customer taste, seasonality, etc. Referring to the benefits and advantages of the strategic marketing, it is becoming very important. However, this market still lacks many crucial elements in marketing. One of the reasons is that now the marketing strategy is more focused towards destinations than consumers. Consumers are the main elements because of which this organization is running and they are the one need to be focused (Williams, 2006).

Due to the advancement in the market, organizations have lost their interest in offering packages rather than outlets and destinations. The preference and desire of consumer is being neglected completely. Now consumers have more knowledge of tourist spots and the demand high value service from the tourism industry (e.g. Web 2.0 and Web 3.0)

Tools for Strategic Marketing in Tourism and Hospitality

The competitive strength in the environment of tourist services, especially hotels are strongly related to the policies and strategies which are developed through the process of new information technologies (Oltean et al., 2014).

Technological innovation has greatly impacted the traditional tourism marketing strategies in the last decade as well as, changing the behaviour of implementing the strategies and tasks of service providers. With the increase in demand for quality services and high satisfaction have forced companies to modify themselves and adopt technologically advanced systems.

Such innovations are becoming part of every organization in the industry. This is obvious that investment in information technology will increase the effectiveness and efficiency of the organization. Although, this will also increase the competition by reducing the cost and time spend on each task and capturing markets globally (Bilgihan et al., 2011).

As stated by, Eurecat Tourism Innovation Department Director Salvador Anton Clave said during the Forum TrisTIC de Barcelona event that “the change goes beyond improving processes of the tourist experience; it entails transforming the tourism system itself.”

Some elements like mobile phones have major effect. They have made everything available in one click from booking to travelling everything can be done on your cell phones. People can locate restaurants, hotels, top tourist spots and even purchase anything they like. And most importantly people can never get lost in new location thanks to GSP and google map (Global growth agents, 2019).

Mobile apps

In terms of technology and future growth, smartphones are the most important development. Today, instead of just connecting people now they are used for booking tickets of airlines. Book Uber cars to reach different locations and to choose places where one wants to go.

Faster and safer with biometrics

The biometric system at airports and hotels have made trips extremely safer. On the basis of this all the gather can be collected with the help of fingerprint. In future it is possible that people will not need to carry passport and tickets with them instead with the help of biometric system their booking record will be displayed on computer and travelling will become very safe and easy.

Fewer hotels, more private homes

Sharing foods and living places is becoming new thing in tourism industry. With the help of Airbnb people can book their accommodations much cheaper than hotels and have the luxury of living in homes. This make things safer for people and increase the diversity in people to share their things and make money.

Furthermore, COUCHSURFING has made life much easier than Airbnb. This app has allowed people to connect and live free in different countries, reducing their cost of travelling to minimum level possible. In COUCHSURFING people share their houses and food with travellers for free and give them tour of their places. And each people can know another even before they meet by their profile and references, they get by other peoples. Such new technologies have made things secure and easy for everyone.

Car rentals with GPS

Nowadays, people don’t need navigators to track locations but they have smartphones for them. People can track their cars and distances. Rental companies have taken great advantage of this and Ryanair airline is also using this service in their benefits (Tourism Review News, 2019). It has become simpler to book a car online and locate it through the GSP about where the car is.

Customers us informational technology system to compare alternative solutions for traveling and finding best suitable offers. Using different servers like Kayak, TripAdvisor they can find best travel guides and secure bookings to meet their requirements (Buhalis & O,Connor, 2005)

Online shopping also differs due to the complexity of the website, the easier it will be more customer will shop from that website. (Beldona, Morrison, & O’Leary. According to an Australian study, different people have different comfort zone in terms of website and they act according to their preference. Even while booking on the website it have to secured which increases the trust of costumer to again visit (Benckendorff, Moscardo, & Murphy.

Kim and Han (2007) concluded that potential consumers of seven different agencies identified that low fares and security is the most important aspect of any website.

Customer loyalty and satisfaction is highly integrated with quality service and secured channel (Ho and Lee (2007). In developing countries like India, Brazil, research has showed that IT staff have high technical skills and need more development to grow their businesses (Tetteh & Snaith).

Additionally,

In case of Entouristik, the management should also adapt such marketing strategic to expand their business effectively.

External Environment Analysis

This theory is based on the ideology of maximizing company’s profit and building long term advantage for an organization. The industrial organization perspective is the basis of the theory which shows that the external factors of the market are more crucial to gain and sustain competitive advantage in the market (Porter, 1981).

Comparison

Strategic management is a long-term strategy planned by the business in order to establish a clear path for the business to follow which portrays how will the business expand, target achieving, how to maximize the profits, which can provide a sense of motivation for the employees.

Whereas, strategic marketing is about segmenting and targeting markets through multiple techniques such as, launching new products which are trending in the market, by setting up prices according to the strategies of long-term management. The primary goal is to satisfy the customer needs and wants far better than the rival comapny and achieve and sustain a competitive advantage. Many businesses face failures to sustain their relationships with existing customers. (Romecitynow, 2020).

Conclusion

In order to expand and effectively run their business Entouristik should use strategic management for the long-term future, and to prepare for the changing marketing conditions. As well as, develop marketing strategies using new era technological marketing tools to attract and sustain customers in order to maximize the profits.

Introduction

To deal efficiently with the broad array of factors impacting the capability of a company to develop and prosper, managers require superior tasks they think will facilitate the best placing of the company in its naturally competitive environment. Such positioning is achievable with strategic management as this method enhances preparedness for unexpected inner or maybe competitive demands. Strategic management is composed of the evaluation, decisions, and methods a company undertakes to be able to develop and sustain naturally competitive benefits. It provides the group a feeling of its goals along with a sense of the way it is going to achieve these objectives. Therefore, this essay will state the different terms of strategic management all over different domains in which line up the exact identical meaning to the main terminal. Examples will be provided as well in order to demonstrate and clarify the terms from different perspectives for the seek of having a full understanding of meanings.

Body

Planning as well as Management Strategy Formulation Strategy may be described as a guide through who organizations improve from the present state of affairs to some future preferred state. It is a powerful argument for a company to properly place itself within its environments and constrain, therefore maximizing the potential of its for moving together with the green improvements. According to Miller, A. (1996) that,” It is then easy to change accordingly as situations in the ecosystem change”. This term is applied in a work environment with the employees and how the strategic management took a place in that specific field and here is a clarification of it. dedication from the administration heading down and also help through the leading brass going down will guarantee strategic planning initiatives shift within the correct path and most employees within the group will purchase effortlessly into the technique. Each part of the company is as crucial as the best level of administration and thus should be recognized as such. Strategic planning teams must make sure that most organizations are represented, for instance, all levels of control and direct care personnel, in the situation of a clinic, must be well represented not by their managers but by the peers of theirs. Ansoff, R. (2018) has stated that “All those that represent the staff needs to be people who’d place the interests and issues, of the group first before theirs”. The staff must be healthy and also think about the gender balance as equally crucial as various group balance, by doing this the group’s dynamics will have the ability to run to all views and the maximum represented.

So, what do we comprehend by Strategic Management? it could be called or even describe as the technique that business has to utilize so that, they are able to be ready to attain everyday goals of the group as well as at exactly the same time it will be simple for the organization to achieve naturally competitive advantage in the marketplace. According to Wheelwright, S. C. (1996) that,” SM is really important because of reasons that are many. They generally include whether the company is confronting issue in the business line of theirs, in case they wish to release a product that is new in the industry, for right analyzing the environment”. Additionally, the key choices that the company takes are based upon what technique that they’re planning to use and just how it will have an effect on their company revenues as well as profit margin. The primary definition for SM is science or art in formulation, analysis, and in addition to drawing crucial choices that are cross-practical in nature and that could really help accomplish the common aims of theirs and the objectives. This just means they’ve to prepare for the activity of theirs, assess after which they have to apply after taking into account different factors, therefore, it will be simple to evaluate as well as can make changes that are necessary when it’s being required. SM happens to be viewed as among the significant element in the good results of any organization.

Here is listing a lineup of all the strategic management definitions which have been found and stated at all times. a pair of choices plus steps causing implementation and formulation of techniques made to get the goals of an organization. It tries to maintain an organization lined up with its earth while capitalizing on environmental opportunities and organizational strengths and also avoiding or minimizing organizational flaws and outside risks. According to Shuen, A. (1997), “The supervisors, who have strategic management expertise, are looking for a competitive edge for the organizations of theirs and also long-term organizational efficiency”. It’s, thus, an intricate function dealing with all activities associated with formulating, applying, reformulating, and recycling strategies. In a nutshell, good strategic management translates a good method into action. As normally, including a good strategy will be made ineffective in case it can’t be changed into action. Hence, it’s the responsibility of the strategic supervisors to accomplish green checking, assess inner weaknesses and strengths, set objectives, mobilize online resources, layout actions plans, monitor progress, implement actions, and balance energy and deviations from targets for the accomplishment of key results areas and goals.

Conclusion

The intention of mine in this particular essay isn’t to market any one particular view of technique but to suggest a number that looks helpful. In going after the various definitions, it is going to be beneficial to consider the significance of technique, to try out realize just how various folks used the expression, as well as, later to determine if some definitions hold up much better in a specific context. Lastly, the various versions of the approach suggest above all that approach is a concept. Any company ought to have a vision, organizational structure, objectives, and mission. For covering the all of conditions organization has to build a strategic choice by which they are able to achieve their primary goal point. Business must keep the most key course of action also the various other elements. The procedure for strategic management is a combination of numerous products. It’s a science since it demands scientific research when formulating blueprints for the tight. On another hand, it could be claimed it’s art given that when plans are applied it varies distant relative to the qualities and color of managers.

Introduction

Strategic planning implies getting ready for making and actualizing procedures to accomplish hierarchical objectives. It begins by making oneself straightforward inquiries like: What are we doing, should we keep on doing it or change our product offering or the method for working, what is the effect of social, political, innovative and other natural factors on our activities, are we arranged to acknowledge these progressions and so forth. (Steiner, 2014)

Strategic planning helps in knowing where we are and where we need to go with the goal that natural threats and opportunities can be misused, given the qualities and shortcomings of the association. Strategic arranging is ‘a careful self-examination with respect to the objectives and methods for their achievement so the endeavor is provided both guidance and union.’

Strategic planning is done to understand, foresee and assimilate ecological notions. It is a constant procedure. Each time business associations need to build the development rate or change their tasks, want for better administration data framework, co-ordinate exercises of various offices, expel lack of concern from associations; they make strategic planning.

Importance of Strategic Planning

Firms that make strategic plans have great deals, low costs, high EPS (income per share), and high benefits. Firms have money-related advantages in the event that they make strategic plans. strategic planning guides individuals towards hierarchical objectives. It brings together authoritative exercises and endeavors towards the long haul objectives. It guides individuals to wind up what they need to end up and do what they like to do. strategic planning gives data to evaluate hazard and edge methodologies to limit the chance and put resources into safe business openings. The odds of committing errors and picking incorrectly destinations and procedures, along these lines, get diminished. strategic planning makes the best utilization of assets to accomplish the most extreme yield. Assets are rare and key arranging helps in their utilization in the territories where they are most needed.

Literature Review

The writing survey uncovered that strategic planning is a mainstream and widespread practice in the private part. It is an initiative and the board apparatus that has been effectively utilized for a considerable length of time to enable associations to more readily plan for the future and enhance long-haul execution. There is expanded acknowledgment that key arranging isn’t sufficient without anyone else’s input and that an excessive number of good strategic plans have been left to assemble dust. The powerful initiative is required to both create and execute vital plans. This has prompted the idea of ‘strategic management, which incorporates the execution and continuous administration of vital arrangements, not simply their advancement. There are diverse key apparatuses that an organization can use to get a deliberate and adjusted methodology. One of the key abilities of a strategic investigator is in understanding which systematic devices or procedures are most fitting to the goals of the examination. The following is a review of a portion of the more ordinarily utilized strategic analysis tools.

SWOT analysis

A SWOT examination is a straightforward however generally utilized apparatus that helps in understanding the qualities, shortcomings, openings, and dangers associated with an undertaking or business action. It begins by characterizing the target of the undertaking or business action and recognizes the inner and outside components that are essential to accomplishing that objective. Qualities and shortcomings are generally inward to the association, while openings and dangers are typically outside. (Patrakhina, 2015)

SWOT distinguishes the techniques utilized for making a particular plan of action as indicated by the organization’s accessible assets and capacities, incorporating the earth in which the organization works. It sees positive and negative components both inside and outside the firm, that influence its prosperity. The investigation enables the organization to figure or anticipate changing patterns that advantage the basic leadership procedure of any association. (Tassabehji and Isherwood, 2014)

PESTLE Analysis

PESTLE examination is a strategic planning technique to decrease business dangers. By analyzing the Political, Economical, Social, Technological, Legal, and Environmental elements, firms will increase profitable favorable circumstances. These favorable circumstances help with the thought stage, item advancement, item propelling, content advertising procedures, and different variables, to build achievement. (Holloway, 1987)

The benefits of the PESTLE examination include being financially savvy, giving a more profound comprehension of the business, sharpness to dangers, and a technique to exploit openings. The main expense of the PESTLE examination is time. While extra projects can help sort out info and criticism, PESTLE investigation can be finished through a basic archive or pen and paper. PESTLE examination is additionally direct. The measure of research fundamental, how much time, and how frequently you do PESTLE investigation for your firm is discretionary. but, the expense to do any dimension of the examination isn’t inclined to change.

Without PESTLE investigation, conditions that specifically and in a roundabout way influence business can go unnoticed. PESTLE examination takes a gander at various and persuasive variables which could influence the achievement of your item dispatches. It energizes the improvement of vital reasoning for a more profound comprehension of strategic planning. While we can utilize PESTLE to dissect firms in a wide sense, it can likewise be limited and utilized for explicit items, promoting plans, and client connections. Especially, when utilized in new improvements inside the firm, PESTLE examination can bring issues to light of potential dangers. Regardless of whether that is a current contender, up and coming contender, or inside your very own items. With PESTLE investigation, you can altogether analyze changes and build up an arrangement to limit any/all benefit increment or harm. Without it, the business could be hit by startling danger. Openings are mostly external. By utilizing PESTLE examination to contemplate outer situations, opportunities can be found and used to reinforce a company’s business.

What not to do, as opposed to what to decide to do, is one of the things when discussing strategy. Strategy is an action that leaders take to achieve one or more of the organization’s goals. Strategy can also be defined as a general direction set for the company and its various components to achieve a desired state in the future. Strategy is the result of a detailed strategic planning process. Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages and this analyzes the major initiatives taken by a company’s top management on behalf of owners, involving resources and performance in internal and external environments (Nag et all, 2007). In order for the organization to apply this process, the upper management must be able to think strategically first. The strategic management process is best implemented when everyone within the business comprehends and understands the strategy. It is essential to know the correlation between the two concepts of the strategic management process and strategic leadership.

Strategic management is important because it permits companies to analyze their current capabilities and their operating environment, to be able to identify either opportunities or even long-term threats, and collect the company’s resources to address them. The objective of strategic management is to achieve better alignment of corporate policies and strategic priorities. In other words, the strategic management process is important to the leaders in the organization to be able to align the company towards the organization’s objectives, developing policies and plans to achieve these objectives, and allocating resources so as to implement those plans. It is the highest level of managerial activity, usually performed by the company’s Chief Executive Officer (CEO) and executive team. It provides overall direction to the whole enterprise. The three stages of the strategic management process are Strategy Formulation, Strategy Implementation, and Strategy Evaluation. The process involves matching the companies’ strategic advantages to the business environment the organization faces. One importance of an overall corporate strategy is to enable strategic leaders to put the organization into a position to carry out its mission effectively and efficiently. A good corporate strategy should integrate an organization’s goals, policies, and action sequences (tactics) into a cohesive whole. To tackle the many obstacles created by today’s global business environment, strategic leaders must be able to develop, employ, and evolve focused strategies that address and attack the ever-changing landscape in which they operate. Understanding the importance of the strategic management process enables leaders to critically analyze the potential shifts in their industry, evaluate opportunities to create value, and learn how to employ effective leadership techniques to shepherd an organization through necessary strategic shifts.

Business activities of an organization are carried out by formulating a strategy called Strategy Formulation. The following elements are developed in the strategic formulation stage; vision and mission that include the organization’s goal, strengths weaknesses identifying the organization’s strong and weak points, as well as opportunities and threats associated with the organization’s external environment. By understanding the elements developed during the strategy formulation stage, strategic leaders will be able to decide and consider how to allocate resources, enter or maintain business, consider mergers or joint ventures, liquidate or divest the business, enter foreign markets, consider business expansion and notice and manage resistance to takeover. The process of formulating a strategy essentially involves six major steps. Although these steps do not follow a rigid chronological order, they are very rational and in this order can be easily followed. First, setting the goals of the organization is the key component of any statement of strategy in setting the organization’s long-term goals. Strategy is generally known to be a medium for achieving organizational goals. Objectives emphasize the state of being there, while strategy emphasizes the process of getting there. The strategy includes both setting goals and the means to be used to achieve those goals. Strategy is therefore a broader term that believes in the way resources are deployed to achieve the goals. Once the goals and factors that influence strategic decisions are determined, strategic decisions are then easy to take. Evaluating the organizational environment is the next step in evaluating the organization’s overall economic and industrial environment. This includes a competitive position review of the organizations. A qualitative and quantitative review of an existing product line of an organization is essential. The purpose of such a review is to ensure that the factors that are important for competitive market success can be discovered so that management can identify their own strengths and weaknesses as well as the strengths and weaknesses of their competitors. After identifying its strengths and weaknesses, an organization must keep track of the moves and actions of competitors in order to identify likely opportunities for threats to its market or sources of supply. The next step is to set the quantitative target as the organization has to set quantitative target values for some of the organizational goals in practice. The underlying idea is to compare with long-term customers in order to assess the contribution that different product zones or operating departments could make. The next step is aiming in context with the divisional plans where contributions made within the organization by each department or division or product category shall be identified and strategic planning for each sub-unit shall be carried out accordingly. In which, macroeconomic trends need to be carefully analyzed. Performance analysis is then administered which includes the discovery and analysis of the gap between the performance planned or desired. The organization must carry out a critical evaluation of the past performance of the organization, present condition, and desired future conditions. This critical assessment identifies the degree of gap between the actual reality and the organization’s long-term aspirations. The organization then attempts to estimate its likely future condition if current trends persist. Finally, the strategic choice is the ultimate step in formulating a strategy. After consideration of organizational goals, organizational strengths, potential, and limitations as well as external opportunities, the best course of action is actually chosen.

Strategic implementation is the second phase of the strategic management process which is also dubbed as the “action stage” of the strategic management process. Annual objectives are established along with the formulation of policies. Furthermore, the employees of the organization are motivated & resources are allocated in order to implement the formulated strategies. Strategy implementation further includes developing a strategy of pro-culture that is supportive, creating an effective organizational culture, redirecting marketing efforts, budget preparation, developing and utilizing information systems, connecting compensation of employees to the organizational performance. At this process, strategic leaders are able to mobilize their managers & employees into the implementing phase so that the formulated strategies are executed. This process is also considered the most difficult stage amongst the other stages of strategic management due to the requirement of personnel discipline, commitment, and sacrifice. Interpersonal skills are of particular importance for successful strategy implementation as this stage is considered as utmost critical in the stages of the strategic management process for leaders by creating answers as to “How best can we get the job done?” to stimulate their employees throughout the organization to work with pride and enthusiasm towards achieving the organization’s objectives.

Strategy evaluation is as important as formulating a strategy because it sheds light on the efficiency and effectiveness of the comprehensive plans to achieve the desired outcomes. With socio-economic, political, and technological innovations, strategic leaders can also assess the appropriateness of the current strategy in today’s dynamic world. Strategic evaluation is an important means for strategic leaders to assess how well the organization has performed, relative to its goals. This is the final stage of the strategic management process. Organizational evaluation ‘measures, compares and analyses the coherence between results and specific objectives and between specific objectives and general objectives of institutional projects, programs or plans’ (Hernan, 1987). It’s an important way for leaders to reflect on achievements and shortcomings. At this stage is important for the organization to be able to re-examine their current goals, which may have been set at a different time, under different circumstances. Three fundamental strategy evaluation elements are to review external and internal factors that are bases for current strategies, measure performance, and lastly to take corrective actions. It is crucial for leaders to have sufficient awareness about the problems and if strategies are not working well. Moreover, future modifications are in lieu of strategies due to forces of external & internal factors. Any successful evaluation of the strategy begins with defining the parameters to be measured. This stage is important to leaders as they can determine the organization’s progress by measuring the actual results versus the plan. By monitoring internal and external issues will further enable leaders to react to any substantial change throughout their organization. If the leaders determine that the strategy is not moving the company toward its goal, then they take steps for corrective actions. If those actions deem successful, then repeat the strategic management process. Because internal and external issues are constantly evolving, any data gained in this stage should be retained to help with any future strategies.

For most organizations, the major advantages of strategic management include identifying, prioritizing, and exploring opportunities. The process will greatly assist an organization in launching new products or penetrating new target market groups. It allows strategic leaders to understand whether or not the business is in a profitable position. Broadly speaking, the benefits of strategic business management can be divided into two distinct sections. One is a financial advantage and the other is non – financial advantage. It has been widely noted that companies with skilled strategic leaders always profit better than their competitors. The reason is strategic management helps an organization to stay focused on its goals. Many people see strategic planning and management processes only for large-scale businesses. In fact, even a startup requires strategic services of management. In fact, start-ups or small businesses require better strategic planning to ensure business growth in the shortest possible time frame. Many startups have their vision scattered. They lack good strategic planning, so they don’t understand their chances. Failure to understand opportunities keeps a business away from its main objectives that can generate real income for them. In Malaysia, large numbers of startups or small businesses are failing to thrive because they lack support for quality strategic management. Only tangible benefits of strategic management have been highlighted so far. In addition to the tangible benefits, strategic management also offers certain non-financial benefits to strategic leaders. It helps an organization to understand its threats, weaknesses, and gaps thus to better understand its business rivals. Strategic management’s most important non – financial advantage is that it helps strategic leaders become more disciplined and organized. It bridges a connection between performance and employee rewards. A company grows rationally under proper strategic planning, understanding its financial feasibility. If the organization is planned to be expanded by strategic leaders, they should aim for meticulous strategic management to find the feasibility or viability of business expansion at this stage.

Any organization can follow to the letter any of many strategic management frameworks, but there may still be chances of failure at execution. This is where the strategic management process is crucial for leaders to be successful in the leadership team that they must have the requisite strategic management competencies or at a minimum be working toward building these competencies. Strategic leaders must be competent with the vision and direction for the growth and success of an organization and a good strategic plan allows their business to be able to assess resources, allocate budgets, and maximize ROI (investment return). In order to successfully deal with change within an organization, all executives need the skills and tools for both strategy formulation and implementation. Managing change and ambiguity requires strategic leaders who not only provide a sense of direction but who can also build ownership and alignment within their teams to implement change. Summing up the following can be stated that strategic management is the process of specifying an organization’s objectives, developing policies and plans to achieve these objectives, and allocating resources so as to implement the plans. This process is important to molding strategic leaders to manage, motivate and influence the whole organization to share that same vision.

In this age of development and globalization, organisations require proper analysis and formulation of abilities so that they could provide the employees with framework and strategies to improve the growth and development of the organisation (Lyyra and Koskinen 2016, p. 61). Through the implementation of strategic management, the organisations are able to develop abilities to meet their goals (Almuzel et al. 2018, p.191). However, in such conditions, it should be mentioned that prior to implementing the strategic management associated interventions, the resources available, the assessment of the internal and external processes and others could be understood (Jazouli, A. and Mitchell 2017, p. 10). Hence, this provides a framework for the population so that using these strategies; the organisation could develop its long term strategies and could help each other to achieve the goals. Perkins and Murmann (2018, p. 475) also add to it by saying that application of strategic management helps the organisations to fairly distribute the resources and help each of the team member to reach its organisation development associated goals.

The primary aim of this paper would be to analyse the strategic management of the Tesla organisation. Further, in the process, it will discuss different aspects such as the focal organisation analysis, critical analysis of the business environment of the process, industry and competitor analysis, and Future trends and key drivers.

Focal organisation analysis

Strength

1. Branding: technological progression has always been considered as the brand of this organisation and this brand recognition is the biggest strength of this organization. As per the effective brand with their innovative ideation has helped them to earn a worldwide buzz for the organisation and it is beneficial for everyone in this organization.
2. Product and technological success: the cars developed by this organisation are sustainable and are proven to have effective and high performances. The organisation has invested primarily in the research and development section so that new and developed technologies could be included in these products (Cheong, T., Song, S.H. and Hu, 2016, p. 123).

Weaknesses

1. Increasing cost for the research and development units: while discussing the weaknesses of this organisation the revenue generated should be discussed. As the organization did not earn the proper amount of revenue due to its high investment in its Research and Development unit. As perMacDuffie (2018, p. 482), this organisation spends 14% of its revenue in these units so that they could develop cost-effective batteries.
2. Expensive products: the over price of products limits the consumer base of this organisation and hence, this is one of the primary weakness for the entire organisation. As per Cheong, T., Song, S.H. and Hu (2016, p. 123) majority of people are unable to buy their products due to the high price and creates an obstacle for the growth of this company.

Opportunities

Increasing and sustainable market trends: despite the limited and restricted consumer base, this organisation has observed a proper up and high market trend in recent years and this creases a room for opportunities for the growth and development of this organisation. The new and developing products of this organisation promise to be green, environmentally friendly and budget-friendly to the middle-class families.

Ability to expand internationally: the organisation has developed its base in the western market and now through their expansion strategies, is not ready to expand in Asia. The organisation has planned to use the inexpensive labour costs so that they could develop products depending upon their consumer needs in the Asian market (Teece 2018, p. 123).

Resources and capabilities: the organisation has spread its base in multiple sectors due to which they have become unstoppable and irreplaceable. One of the best resources of this organisation is its brilliant engineers that have developed this organisation as one of the most technologically advanced organisation. Secondly, after acquiring the Solar City, the organisation now has developed solar panels for its products, defining its capabilities in future (Akakpo et al. 2019).

Critical analysis of the business environment

As per Välikangas et al. (2018, p. 470), differentiation should be considered as the primary business strategy of this organisation as due to their high production rates, high operation costs and consumer processes have affected the profit ratios of this organisation. Despite this, the organisation is observing a steady and sustainable growth due to its differentiate abilities. The organisation focuses upon working their products differentiate from others and hence, despite focusing upon the low-cost processes, Tesla invests upon newer technologies so that they could help the organisations through the implementation of innovation. In this aspect, it should be mentioned that the organisation focuses upon developing and implementing sustainable growth so that they could compete with their competitors and implement success for its technological performances in their market (Teece 2018, p. 123).

Besides this, the organisation’s abilities to implement its innovation and technological processes in the research and development section should be discussed effectively so that they could develop new and sustainable abilities (MacDuffie2018, p. 482). This organisation has dedicated completely its resources and revenues in the growth and development of new and efficient technologies. Due to this prospect, they and their products could be distinguished from others. Despite having higher revenue rate than other automobile organisations, Tesla spends 14% of its revenue in the research and development and hence, this organisation is a major cause of buzz among the automotive consumers that thrive for development and innovation in products (Teece 2018, p. 123).

The functional strategy should also be discussed in this aspect. As per MacDuffie (2018, p. 482), Tesla has a stable commitment towards its value chain and production and as per Teece (2018, p. 122), it is the dealership and abilities that help the organisation to understand that their products are their primary branding tools. Therefore, despite all these, their primary focus should be upon their product, its quality and sustainability. As per Lyyra and Koskinen(2016, p. 61), due to the sustainability and urge for development, the organisation has also trained its employees so that they could also completely focus upon the abilities of the organisation. Further, the organisation has also developed abilities so that their focus for the environment could be understood and through the development of environmental consciousness among its employees as well as consumer base. Therefore, the development of these, the organisation has developed abilities so that they could connect to every aspect in these processes (Teece 2018, p. 123).

Industry analysis

While discussing the type of industry and analysing its functions, the organisation and its existing rivalry with others should be discussed effectively. Tesla organisation works in a highly competitive and as an automotive organisation due to which this organisation holds the most significant place in the global market place (Teece 2018, p. 123). There are multiple rivals for this organisation and as per the business trends, General Motors, Ford Motor Company, and Fiat Chrysler are the organisations that are associated with the critical competition with Tesla in global market place. However, depending upon the new innovations and technologies, this organisation does not have any rival. However, with the development of abilities and critical market complications, it should be mentioned that with the development of technological aspects and research and development, other organisations would soon develop new and technologically developed products. This would eventually hamper the loyal consumer base as those organisations would sell their products at less price. As per Lyyra and Koskinen (2016, p. 61), these models would directly compete with the new and technologically developed products in the market. One of the primary reason for this situation would be limited number of high-class consumers associated with Tesla organisation and high price of its products. All other organisations are focusing upon developing cheaper and developed version of products, electrical vehicles and others due to which majority of the population would be able to afford those products and they would be able to provide effective service to its consumers. Besides this price related rivalry, the organisation is about to face complications with critical market competition associated with luxury car brands as well such as BMW, Mercedes-Benz, Maserati, Audi, Porsche, and Jaguar (Teece 2018, p. 123). These products are involved in the increased competition and hence, it has become important for this organisation to implement critical aspect and focus upon implement strategies so that every product of this organisation could work effectively for the development of products that would be affordable and appealing to every individual associated with it. Besides this, competition could also be present due to the presence of critical health complications associated with the car parts collected from the processes due to which majority of the organisations develops parts that could be used within the products developed by Tesla organisation. Hence, this competition is associated with the usage of care parts that could be used within the process of making innovative cars. Therefore, these are the complication that arises after the analysis of market in the process (Lyyra and Koskinen 2-16, p. 61).

Competitor analysis

The industry has a wide range of market competitors ranging from Luxury Competitors to American Automotive competitors. The analysis for the luxury competitors Bavarian Motor Works and Mercedes Benz is given below (Kauerhof 2017, P.80):

BMW (Bavarian Motor Works)

• Strength: Excellent quality, performance, strong brand value.
• Weakness: Poor in associated partnerships and operational cost-efficiency.
• Capabilities and Competencies: Versatile, strong financial hold and innovative in terms of technology.
• Business Strategy: Market segmentation and differentiation.

Mercedes Benz

• Strength: Excellent performance, quality and strong brand value.
• Weakness: Costly maintenance.
• Capabilities and Competencies: Financially stable and excellent engineering and automobile technology.
• Business Strategy: Market segmentation and differentiation.

The above mentioned BMW and Mercedes Benz are two distinct luxury brands that are consistent competitors of TESLA motors. In the coming years, BMW plans a launch of 25 electronic vehicles with 12 of them being completely electronic and possessing a useable range till 435 miles (Kancherla and Daim 2018, P.348). Mercedes Benz also plans to spend $ 1 billion to commence the production of electronic vehicles and introduce a total of 10 novel electronic vehicles (Kancherla and Daim 2018, P.350,351). At the same time, Volvo which is a mass-market brand also plans to launch hybrid and fully electronic vehicles in the year 2019 (Mortiz et al. 2015, P. 88). Considering the innovative measures being undertaken by luxury brands, it can be said that Tesla Motors is vulnerable and is going to witness strong market challenges.

American Automotive Competitors: Ford Motor Company and General Motors.

Ford Motor Company

• Strength: Stable U.S market position, excellent design and precision.
• Weakness: lack of innovation.
• Capabilities and Competencies: Manufacturing and mass production.
• Business Strategy: Cost leadership.

General Motors

• Strength: Multiple collaboration with Chinese companies and strong market positioning within the U.S.
• Weakness: Dependence majorly on the U.S market for revenue.
• Capabilities and Competencies: Global supply-management and innovative strategic supplier engagement program.
• Business Strategy: Poor cost strategy

The two companies General Motors and Ford Motor Company have invested heavily on artificial intelligence, fostering improvement in car design and autonomous car designs which can pose a threat to TESLA motors.

Current trends and key drivers

The luxury brands BMW, Mercedes Benz as well as the American Automotive Competitors have levied efforts in the field of technology so as to improve the car design and transition the traditional car designs into semi or completely electronic operated car designs (Bilbeisi and Kesse, 2017). It is worth noting in this context that For Motor Company has recently announced about the investment of $1 billion for fostering innovation and developing the technology of autonomous driving (Ayala 2016, P.77). The strong market competitors of TESLA motors are integrating effort to make use of advanced AI to launch the concept of ‘Self-driving’ cars. Therefore, it can be anticipated that the current trend in the automobile industry would mostly be reliant upon the development of artificial intelligence and for the same TESLA motors would need to invest in rigorous research and development for the purpose of introducing innovation aligned to the technology of AI. TESLA motors are known for its experienced and skilled manpower and therefore with the employment of skills and expertise of the employees, the enterprise would be able to evolve and integrate innovation so as to produce cars that are of superior quality and unmatched in terms of specifications (Gaya Ferra and Tresserras 2016, P.67). This would help TESLA motors to maintain an edge over the stable market competitors.

Future trends and key drivers

At present, TESLA motors remain unmatched within the automobile industry in terms of specifications and performance in the 21st century. In this context, it is worth noting that the introduction of electronic cars based on the lithium ions has helped to enhance the brand value of TESLA motors against all other market competitors. At present, the market position can be considered stable and through the market size and large infrastructure the company is also provided with a number of strategic opportunities as well as options that can help to enhance the competence of the company (Stringham et al. 2015, P. 88). Factors such as sales as well as supply chain expansion, introduction of budget-friendly models, introduction of mobility services and creation of new market segments and business expansion can help to improve the brand image and sustainability of the company (Mosey and Kirkham 2017, P. 27). In this regard, it is important to acknowledge that the mentioned aspects must be intricately evaluated and taken into consideration such that brand image can be enhanced. It is also essential to consider the risks involved such that appropriate mitigation strategies can be developed so as to ensure that the brand image and reputation of the organization is not impacted and that the organization develops manifold to acquire stability within the International market.

Key factors and opportunities for Tesla

This section would present a brief discussion on the mentioned factors where TESLA motors could work so as to expand the business and acquire market stability. TESLA motors have an opportunity to improve sales within the regions of Asia, Europe and South America. A number of regions within the mentioned continents are unexplored or underexplored and offer an exhaustive opportunity for business expansion. There is a huge opportunity for TESLA motors to make use of improved automobile engineering and technology such as solar cells and other means of sustainable technology so as to expand business within the untapped markets of the mentioned regions (Wen 2016, P. 67). Therefore, expanding the business to the mentioned areas can help the company to grow multi-fold which would add to the revenue of the company. Demographic studies mention that the maximum proportion of the world population includes, people who fall under the category of middle-class income. This means that the company can work on launching economically optimised models which would fit the demands of the people who belong to the lower or middle-class income category. Market segmentation and introduction of economically optimized car models would help TESLA motors to acquire market revenue, expand and diversify (Bilbeisi, K.M. and Kesse, 201. TESLA motors can also work on ride-sharing or mobility services which would potentially serve as a market innovation that would help to boost market revenue. The mobility service by TESLA would intend to serve as an inexpensive solution to customers wherein customers would be able to make use of luxury cars for sharing cab rides to office at an affordable price range. This innovation would not only ease commute route but at the same time would also help to control carbon emissions which would further boost the revenue of TESLA motors (Stringham et al. 2015, P.88). Another application-oriented initiative can be undertaken where the customer would be able to summon a TESLA car at the doorstep similar to that of UBER and commute via a luxury car at an affordable price range. In addition to this, TESLA motors also contain opportunities in the form of mergers, acquisitions and collaboration to expand market and boost the revenue of the company (Ivanov, Tsipoulanidisand Schönberger 2017). It can be expected that long term investment and innovative initiatives can help the brand acquire improved profitability and a larger customer base that would help to attain a stable market position within the international market.

Strategic Management SLP 1

Per request, the required 5-year simulation provided the following findings based on thorough review and data analysis. The narrative details necessary changes in products W1, W2, and W3 in terms of lifecycles as well as price and performance to be considered that will enhance the company’s future profit margin as requested. This report also addresses concerns related to sales, costs, unit margins, profitability, market saturation, and implementing a different marketing strategy towards R&D and pricing from 2013-3016.

Initial Observation

Cost volume profit analysis (CVP), is a method that is used to achieve profit by estimating the changes associated within an organization’s cost. These costs are defined as fixed costs and variable costs which controls 3 parameters (1) sales volume, (2) price, and most importantly (3) company’s profit (Peavler, 2017). As the responsible person for strategic management and pricing in research and development (R&D) and to expound on funding allocations. After running the simulation Joe’s failure to adjust the existing numbers in pricing and R&D based on findings from fiscal year 2012 to fiscal year ending 2016 jeopardized earning potential within a 5- year period. Without compromising and discrediting facts, Joe’s failure to adjust figures in W1, W2, and W3 products lifecycle compromised the ability for the Wonder Company to maximize profitable growth and earning potential. Manager’s pay particular attention to detail and product performance due to market fluctuation which is crucial to operational growth. Marketing and advertising are key indispensable functions to enhance merchandise sales, maintain existing customers, and draw attention to new potential consumers. The previous manager’s choice of decision making affected organizational subtleties from leading, planning, controlling, and directing the functionality of operations to enhance or improve product procurement. Even though the Wonder Company was able to obtain significant profit throughout the 5- year period, continuous change and adaptability is inevitable for elasticity of an organization to remain relevant. Yearly, Wonder’s profit margin decreased substantially due to the marketing manager’s failure of proper fund allocation. When the Wonder Company’s products were no longer in high demand, minimal strategic efforts led to the company being consumed by market saturation. According to (Hargrove, 2019) market saturation occurs when the quantity of a product or service peeks in a particular sector. Implementing a yearly pricing strategy allows a company the ability to adapt to a saturated market if necessary, by utilizing R&D with creativity and an effective marketing strategy for pricing.

Product Performance Analysis

Upon completion of the simulation, the initial performance within the company aligned with the competitive market in 2012 for W1. Wonder Company’s customer base was 1,035,00 with 882,729 being first time customers and 86, 230 being repeat sales accumulating a total of 15% market saturation. The same year, W2 sales decreased to 550,000, with 46,945 repeat customers and 8% market saturation. W3 sales attracted no repeat customers with 2% market saturation during 2012. That year alone was a red flag for the previous marketing executive to conduct thorough review of product analysis instead of running repeat numbers. The previous decision was derived on the inclination of sustainability and attributed to W1’s performance in 2012-2013 with increasing customers from 1,035,000 to 1,917,729 however, market saturation increased 12% that year from 15% to 27%, W2 doubled from 8% to 16%, but outperformed competitors in the same market, and W3 remained consistent due to pricing which contributed to allocation concerns for demand. The simulation provided the following results for market saturation for 2013-2016:

2013-2014- W1 market saturation increased from 27% to 48%, W2 increased from 16% to 36%, and W3 increased minimally from 2% to 3%. The W1 sales fared the same as market competition, and W2 was still in the growth phase where consumers had yet purchased. Failure to adjust the necessary funding for pricing allocation allowed continuous market saturation of W1 and W2. As the years progressed the percentages steadily increased for those two products and are detrimental to potential profit margin.

2014-2015- W1 increased from 48% to 73%, W2 from 36% to 73 %, and W3 from 3% to 4%. From 2014-2015, the products of W1 and W2 began experiencing saturation as Volume sales almost doubled and its repeat customers declined. During this phase W3 price point cost more than the product market and performed lower than the competitors.

2015-2016- W1 INCREASED FROM 73% to 93%, W2 FROM 72% to 100%, and W3 4% to 5%. The yearly growth percentages of W1 and W2 contributed to market saturation contributing less need of the product due to market and consumer demand.

Financial/Market Review

The attached appendix depicts product analysis for W1, W2, and W3 from fiscal years 2012 to 2016. The breakdown is a comparative comparison based on the given numbers provided within the simulation. During the lifecycle, the simulation provided the following results. In 2012 total profit was $86,637,786 with 17% profit, in 2013 total profit was $289,759,640 with 27% profit margin, 2014 total profit was $567,621,741 at 22% profit margin, 2015 total profit was $18,964,877 at 3% profit margin, and 2016 total profit was $19,876,715 at 4% profit margin totaling $1,650,231,103. The numbers represent significant profit but did not maximize on outcome potential. The profit margins continued to decrease as a result of failure to implement cost volume profit analysis, market saturation, and consideration for market demand. In 2012 costs associated to product market price was more than the competitive market. In 2013 the company saw its most significant profit in sales growth, but most consumers had not yet committed to purchasing the merchandise. In 2014, based on previous sales, the price of W3 products cost more than competitors, however, majority of W3 consumers were new and led to W3 pricing of $185 falling below the competitive pricing market. Analyzing the process and using the given numbers provided, in 2015 W1 achieved profit but sales declined and executed the same as market competition. During the span of 5 years none of the prices were adjusted, nor products discontinued, product cost and market demand were irrelevant since breakeven point was not taken into consideration for either product. Wonder Company’s previous marketing VP should have paid particular attention to breakeven analysis in 2014 as W3 sales declined but product cost was more than the competitive market. At that time, inconsistencies within current pricing strategies should have been a marketing concern. W3 pricing and R&D allocation should have been monitored more closely since there was no significant growth utilizing the numbers for this product. In retrospect, Joe saw no need to adjust the current pricing strategy due to the company accumulating profit with the figures that were previously used. Consideration of market volatility is important in adjusting operations. Amadeo (2019), referenced market volatility as the velocity of price with the changing market with a market cap and bottom. Managers should pay close attention to pricing and adjustments associated with because of market uncertainties and global growth. The failure to adapt a competitive pricing strategy for W3 or try to improve performance on W1 and W2 implied concerns of future options and company advancement.

Alternate Strategy

As VP of marketing, it is vital to conduct necessary research to enhance organizational growth and future potential. Quantitative data provides reports and statistical data for the output of each product within a company’s footprint. Management control is a way to direct staff with task and purpose to promote future potential. According to Erik-Sveiby (2001), management control is the most common approach to measure and report to improve an organization’s internal performance. Therefore hands on involvement is one of the most essential elements for visibility within company operations. As an enabler, visibility is a key performance indicator (KPI) which directs the needed attention to performance and the required adjustments to be made i.e. in performance, pricing, R&D, and how each function should be addressed to maximize profitability at the lowest operating cost. Of the four intangible measuring approaches by (Luthy) 1998 and Williams (2000), 2 of those stands out to improve performance and they are return on assets (ROA) and market capitalization (MCM).

• (ROA)- a time-based analysis of actual performance of a company’s product compared to the industry average.
• (MCM)- analyzes the difference between organizational capital and stockholder’s equity as assets of little to no importance.

However, stockholders’ point of view should be considered in the decision- making process of product procurement. Stockholders’ are not only investors, but also include customers and when sales decline the impact affects all involved and the entirety of the process. Managers should be more engaged and proactive in their approach to market fluctuation as a concern for future potential.

References

1. Amadeo, K., 2019. Volatility and its Five Types. Retrieved from https://www.thebalance.com
2. Erik-Sveiby, K., 2001. Methods for Measuring Intangible Assets. Retrieved from https://www.sveiby.com/files/pdf/intangiblemethods.pdf
3. Hargrave, M., 2019. Market Saturation. Retrieved from https://www.investopedia.com/terms/m/marketsaturation.asp
4. Peavler, R. (2017, February 02). How to do Cost-Volume-Profit analysis: An introduction. The Balance. Retrieved from https://www.thebalance.com/how-to-do-cost-volume-profit-analysis-an-introduction-393475

INTRODUCTION

The management concept of building an organization around the profitable satisfaction of customer needs has helped firms to achieve success in high-growth, moderately competitive markets (Bracker, J., 1980). However, to be successful in markets where the economic growth seems to be matured and in which competition appears to be high, it is key to follow the marketing concept and a well-developed management strategy. Such a strategy considers a portfolio of products and takes in to account the anticipated moves of competitors in the market.

Management is strategically concerned with the direction and scope of the long-term activities performed by the organization to obtain a competitive advantage. The idea is to have your organisation customer focused whilst simultaneously satisfying your stakeholders’ expectations. The scope of my study restricts itself to the analysis of Management strategy of Nokia and Samsung.

What is strategic management?

According to Chen, Hambrick and Nag “strategic management is the continuous planning, monitoring, analysis and assessment of all that is necessary for an organization to meet its goals and objectives” (2007, p. 935-955). Fast-paced innovation, emerging technologies and customer expectations force organizations to think and make decisions strategically to remain successful (Völckner, F. and Sattler, H., 2006). The strategic management process helps company leaders assess their company’s present situation, chalk out strategies, deploy them and analyse the effectiveness of the implemented strategies (Welch, D.E. and Welch, L.S., 1996). The strategic management process involves analysing cross-functional business decisions prior to implementing them.

Importance of Strategic management

Strategic management drives the necessity to form a commitment toward strategic planning which in-turn signifies the company’s ability to set both, short- and long-term goals, then determining the decisions and actions to be taken in achieving these goals.

Strategic Management on a corporate level normally incorporates preparation for future opportunities, risks and market trends. This makes way for the firms to analyse, examine and execute administration in a manner that is most likely to achieve the set aims (Covin, J.G. and Slevin, D.P., 1989). As such, strategizing or planning must be covered as the deciding administration factor. Apart from faster and effective decision making, pursuing opportunities and directing work, strategic management assists with cutting back costs, employee motivation and gratification, counteracting threats or better, converting these threats into opportunities, predicting probable market trends, and improving overall performance Covin and Slevin, 1989, p. 75-87).

Strategic management process

(Poister, T.H. and Streib, G.D., 1999)

Strategic Intent

Strategic intent gives an idea of what the organization desires to attain in future. It answers the question what the organization strives or stands for? It indicates the long-term market position, which the organization desires to create or occupy and the opportunity for exploring new possibilities.

Strategic Formulation

Strategy Formulation is an analytical process of selection of the best suitable course of action to meet the organizational objectives and vision. It is one of the steps of the strategic management process. The strategic plan allows an organization to examine its resources, provides a financial plan and establishes the most appropriate action plan for increasing profits.

Strategy Implementation

Strategy implementation is the technique through which the firm develops, utilises and integrates its structure, culture, resources, people and control system to follow the strategies to have the edge over other competitors in the market.

Strategic Evaluation

Strategic evaluation is the assessment process that provide executives and managers performance information about program, projects, activities designed to meet business goals and objectives.

Introduction to the company profiles

Company 1 – SAMSUNG

Samsung is a South Korean multinational company headquartered in Samsung Town, Seoul. It was founded by Lee Byung-chul in 1938 as a trading company. Samsung entered the electronics industry in the late 1960s and the construction and shipbuilding industries in the mid-1970s; these areas would drive its subsequent growth. Following Lee’s death in 1987, Samsung was separated into four business groups – Samsung Group, Shinseki Group, CJ Group and Hansol Group. Since 1990s, Samsung has increasingly globalized its activities and electronics, particularly mobile phones, have become its most important source of income .

As stated in its new motto, Samsung electronics ‘vision for the new decade is ’Inspire the world, Create the future’

This new vision reflects Samsung electronics ‘commitment to inspiring its communities by leveraging Samsung’s three key strengths New Technology, Innovative Products, and Creative Solutions. And to promoting new value for Samsung’s core networks, Industry partners and employees. Through these efforts , Samsung hopes to contribute to a better world and richer experience for all.To this end, Samsung has also three strategic approaches in management. ‘Creativity, Partnership and Talent.’

Strategies used by Samsung

1. Globalization – With more than 285 overseas operations in 67 countries. Samsung is truly global in scope and nature. Samsung’s strategy is two-pronged:

• To prudently expand outside its home market
• To equip overseas units with the skills and resources to be self-sufficient.

This strategy brings Samsung, and the countries where it operates, Globalization provides access to new suppliers and customers, and allows Samsung to learn and benefit from new cultures and new ideas.

2. Human Resource Strategy – One of Samsung’s human resource strategy is to recruit the highest quality personnel around the world, regardless of nationality, by focusing on those who have masters and Doctorate degrees in all areas of management.

3. SWOT analysis of Samsung

4. Value chain analysis

‘electronics and computing’ industry reveals that ‘manufacturing’ is the maximum value adding activity (approx. 50% of total), and a key area for companies to reduce costs and control product quality. Samsung is ‘contract manufacturer’ in DS business, and ‘vertically integrated’ in CE and IM businesses.

PESTEL analysis

Political: Mallard (2015) has highlighted the role of governments using political influence to attract foreign direct investment. Reuters have reported that Samsung is under pressure from the US government to set up a production base in USA (2017a). The recent arrest of Samsung’s Vice Chairman, Lee Jae-Young (McCurry, J., 2017), in a corruption scandal shows that politics plays a significant role in how businesses are run.

Economic: Consumer electronic products have shorter life-cycles due to the speed of technological obsolescence (Torresen,J. and Lovland, T.A., 2007), and companies have to price new products at a high price to be able to breakeven quickly. The consumers in developed countries have the buying power to afford new electronic products.

Socio-Economic: The changes in the life-style of consumers, due to the fast pace of modern life, has seen increase in ‘impulse’ buying of products, In addition, Park, Jun and Lee have concluded in their study that mobile phone shoppers are impulse buyers, and have a high consideration for the product price, since they perceive effort and time spent in buying as a cost (2015, p. 157).

Technological: Wang and Ahmed mention that “a firm’s dynamic capabilities depend upon market dynamism, and this drives the firm to develop core capabilities over a period of time” (2007, p. 31-51).

Environmental: Chopra and Wu (2016) mention that the directives like 2003 RoHS (Restriction in use Of Hazardous Substances) in the EU, and increased emphasis on Climate Change, has seen an increase in eco-announcements from companies in the computing and electronics, who are beginning to view the use of eco-friendly materials and systems in their products as a competitive advantage.

Legal: The ‘electronics and computing industry’ is dependent on technological innovation, which means that protecting IP (intellectual property) is a key issue, and companies have to ensure that competitors do not take advantage by copying or imitation. In addition, product safety issues can affect the company’s reputation and impact product sales (Chen, 2004). Bloomberg (2016) reported that Samsung China have been ordered to pay CNY80 million (US$ 12 million) to Huawei for a patent infringement.

Key success factors

These are the key factors which contribute to success in an industry, and can either be resources (investment, talent) or competencies (technology, process) which an organisation must possess to become successful in the marketplace (Lynch, 2015).

Analysis of the factors influencing the ‘electronics and computing’ industry shows that product affordability, product features, and product quality are the main requirements, and to achieve these, the key success factors are:

• i) Low cost of production (for contract manufacturing only)
• ii) Investment in production facilities
• iii) High investment in R&D
• iv) Availability of talent (scientists and designers)

Company 2 – NOKIA

Nokia is a Finnish international communications corporation. It is mainly involved in the production of mobile devices and in joining Internet and communications businesses. They create a widespread variety of mobile devices with amenities and software that allow people to practice music, navigation, business mobility and more. Nokia is the vendor of Symbian operating system. Nokia has implied such strategies that help it to maintain its hold in the market of being a leading manufacturer in mobile devices.

The organizational mission of Nokia is “Connecting People”. Their mission statement is “In a world where everyone can be connected, we take very human approach to technology”. The organization is involved in the business of manufacturing mobile devices and is in a race to become the world’s leading manufacturer of mobile devices. As the mission states that it wants to connect people, it is aimed at making such devices that they are easy to use for humans and also remain up-to-date with technology.

Strategies used by Nokia

• SWOT analysis
• Corporate culture

Nokia corporate culture is one of the corporation’s planned and cutthroat benefits. Even the corporation’s slogan, `Connecting People’, is representative of the culture, and aids in describing the reason of its corporal amenities. The corporation’s structures highlight masses of natural wood, huge windows, welcoming colours and fabrics, exposed floor strategies, pedestrian overpasses, game/leisure parts, fitness places and saunas.

• Value chain

To get an improved comprehension of Nokia’s stance in the mobile telephony business, it is significant to observe the business value chain. Handset end-consumers do not buy straight from Nokia, as an alternative, they generally register in cellular calling strategies from amenity sources. Nokia trades its phones to the mobile service contributor and/or supplier after creating every handset using several factors created by other sellers.

• PESTEL analysis

Political-The outer political environment has the ability to influence Nokia considerably, particularly owing to the detail that Nokia is functioning on a universal level and should stand to a complete presenter of country precise podiums in which the political and legal techniques can vary considerably.

Economic –Economic factors such as development rates, interest rates, trade rates and inflation rates are vitally imperative to Nokia equally in the temporary and enduring term. The influence of these issues can have main inferences, comprising how they function and make verdicts such as what must be manufactured, how it must be created and what demographic of consumer the end result must be directed to.

Social – Nokia’s inventions have comparatively small product lifespans; this indicates Nokia has to pay careful concentration to styles and social choices. Growths in how mobile phones and smart devices are consumed have altered over the years, for instance, the development of camera phones, touch screens and 3G. Disaster to execute qualities when they initially occur can direct to meaningful market share destruction. Nokia functions in a vast amount of markets mostly owing to its robust allocation system, all of these markets have certain tastes, cultures and anticipations.

Technological –In the telephones business, particularly OEMs, the rapidity of alteration and acceptance of new technology influences officials knowingly; the achievement of Nokia is built on endless invention. Nokia examines research and development improvements by rivals, obvious from their speedy acceptance of touch screen technologies and more lately throughout their research plans into gadgets such as Tablets that are comparable to the iPad.

Legal –Nokia has above 132,000 employees in 120 countries and therefore distinguishes the significance of concerns that associate to service adjustment in addition to employee wellbeing and protection. For instance, Nokia lately authorized a contract linking to the reimbursement parcels to be obtained by the personnel of Nokia employed at the Jucu plant with the Romanian trade alliances. Product protection and well-being is added legal concern that is of extreme significance to Nokia.

Environmental –Altering public approach to environmental sustainability in addition to invention removal and reprocessing have altered extensively over the previous era. Nokia have been active with respect to environmental accountability and sustainability, they set further that it is “integrated into everything we do. From the devices we build and the suppliers we choose, to our mobile solutions that enhance people’s education, livelihoods and health”.

Key failure factors

Ultimately though this lack of innovation management and understand is a failure right at the top of the Nokia organization. For over a century Nokia had exemplified transformational leadership, evolving itself from a manufacturer of rubber products (Wellington boots and cables) to technology hardware to ultimately to the global market leader in mobile telephony. These transitions must have taken transformational leadership in the form of visionary thinking, risk taking, long-term planning and the careful management of

business transformation and organizational culture. However the leadership team present during the last 5 years (or maybe longer) of Nokia’s demise clearly exerted the traits of transactional management – focused on the short-term and managing the maintenance and improvement of performance. This coupled with often conceited nature of a market leader who think they know their market best due to past performance is ultimately the reason why Nokia exists no more.

Conclusion and Recommendation

According to the strong competition in the mobile phone market, Nokia should improve their mobile phone’s abilities such as function of internet using on mobile, and also produce new application to satisfy customers ‘needs. They should not be too dependent on Microsoft, because it would be hazard for the company. On the other hand, Nokia should keep developing the mobile phone technology at the same time Microsoft focus on software and another application that relates to mobile phone using. It might be true that is difficult for Nokia to recover from the problems while the competition of mobile phone is very strong due to the trend of smart phones for Apple and Google’s android operating system, But cooperation between Nokia which produces numerous portfolios and has a very large distributed channel around the world and Microsoft that is the worldwide leader in software, would create new efficiently technology to offer customers and be successful again.

References

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