PART A: STRATEGIC POSITION Strategic Objectives Specific Measurable Achievable Relevant Timescale Johnson, Scholes and hittington!

s Rational Planning "odel

1. Strategic position/analysis a. the company should perform external analysis to identify opportunities and threats b. the company should perform internal analysis to determine its own strengths and wea nesses c. once having decided which are the critical or ey factors! it is then necessary to decide on the li elihood of a particular environmental change occurring and the significance of its impact on the firm. Matching the competitive capability of the firm against the attractiveness of the business sector it is operating in will provide an understanding of the firm"s competitive position and the strategic options open to it #g $#ST#%! $orter"s &ive &orces! $orter"s 'alue (hain! $roduct %ife (ycle Model ). Strategic choice a. how to compete b. where to compete c. choosing the method of expansion *. Strategy implementation a. translating long+term strategic ob,ectives into detailed tactical and operational targets b. setting of detailed budgets and performance appraisal to control the business c. ongoing assessment as to whether the plans are on trac and! if not! what action needs to be ta en to rectify the situation d. the company should ensure that planning is not a formal once+a+year exercise but an ongoing process where there is the flexibility to allow strategies to emerge in response to a changing mar et

Prod#ct $i%e C&cle "odel

The model is normally used to assess the overall balance of a product portfolio with respect to1. .rowth / new products replacing those at the end of the life cycle ). (ash flows / positive cash flows from some products can help finance those that are currently cash negative *. Ris / having some stable low ris products to compensate for other high ris ones Social res'onsibilit& / the idea that an organisation should behave responsibly in the interests of the society in which it operates Advantages o% Cond#cting a Sta(eholder Anal&sis: + + + + + the company will be able to select investments that are more li ely to satisfy the expectations of ey sta eholders the company will be able to incorporate the opinions of powerful sta eholders when designing pro,ects identifying and winning over powerful sta eholders will ma e raising and using resources easier anticipating sta eholder responses will allow proactive management and avoid conflicts. The company will be able to identify potential ob,ectors to investments and could then ad,ust how pro,ects are done to reduce resistance the company will be able to identify the level of involvement each group re0uires. &or example! which groups need to be included in detailed discussions and which simply need to be ept informed

"endelo)!s "atri* / the principal sta eholders of a company can be analysed using Mendelow"s Matrix

Porter!s +al#e Chain 'alue activities / the physically and technologically distinct activities that an organisation carries on. 'alue analysis recognises that an organisation is much more than a random collection of machinery! money and people. These resources are of no value unless they are organised into structures! routines and systems which ensure that the products or services that are valued by the final consumer are the ones that are produced. 1t is important to understand that each part of the operation has an impact on other activities. A failure in one area because of the lac of control or influence can damage the overall performance. The value chain-

$rimary activities / the activities involved in converting raw material inputs to finished products! the transfer of the product or service to the buyer and any after+sales service Support activities / cut across all of the primary activities 2y analysing each of these activities! we can identify the problems facing a company. After analysing these activities! the main tas is to decide how the individual activities might be changed to reduce costs of operation or to improve the value of the company"s offerings. 1nbound logistics / the activities concerned with receiving! storing and handling raw material inputs 3perations / concerned with the transformation of the raw material inputs into finished goods or services. These activities include assembly! testing! pac ing and e0uipment maintenance. 3utbound logistics / concerned with the storing! distributing and delivering the finished goods to the customers Mar eting and sales / responsible for communication with the customers! eg advertising! pricing and promotion Service / covers all of the activities that occur after the point of sale! eg installation! repair and maintenance Co,'etences / an organisation"s distinctive competences are those things which an organisation does particularly well / those things that underpin the organisation"s competitive advantage. They include the organisation"s uni0ue resources and capabilities as well as its strengths and its ability to overcome wea nesses. Resources such as technical s ills that can easily be bought in confer no competitive advantage. 1t is only those resources that are uni0ue to the business and enable it to do things differently that create competitive advantage. (ore competences should be difficult to imitate and if not! any competitive advantage will not be sustained. -e& s#ccess %actors / those re0uirements which an organisation is essential to have if it is to survive and prosper in a chose environment or industry #g strong brand name! balanced portfolio of customers! balanced/comprehensive range of products! good relationship/coverage with distributors/retailers! strong support from parent company! strong financial controls! good negotiating and planning and control s ills! good people relations s ills! administrative competence! s illfully deployed mar eting function

1t is not guaranteed that the distinctive competences and the ey success factors are always in alignment. 1t is critical to ensure that what the company excels at is what is needed to be successful in that particular area. E*ternal environ,ental anal&sis.scan / an essential prere0uisite prior to selecting a strategic option. 1t enables the company to identify and understand the (e& e*ternal in%l#ences and uncontrollable influences which will have an impact on the company"s strategy. The ac0uisition of the external information is obtained by scanning the environment continuously and monitoring ey indicators which should enable the company to position itself appropriately with respect to the external environment and the competition. The external scan should be structured around a combination of both the $#ST#% and $orter"s &ive &orces models. 1n addition it is also important to assess potential competitive reactions as part of the scanning process. PESTE$ $olitical #conomic Social Technological #cological %egal /alanced scorecard / a set of operational measures which complement the financial measures which some companies tend to concentrate on to the detriment of other areas. 1. &inancial perspective ). (ustomer perspective / measures the performance of the company with respect to its customers *. 1nternal business perspective / helps to assess how efficiently the company is operating 4. 1nnovation and learning perspective / focuses on the ability of the company to be innovative and to transfer that innovative learning 5isadvantages of the 2alanced Scorecard approach1. Such a comprehensive set of performance measures will ta e considerable time and commitment on the part of senior management to develop. There is a need to avoid over+complexity and assess the costs and benefits of the process. ). There is the 0uestion of whether all the ey sta eholders have shared goals and expectations and whether the measures are focused on short! medium or long+term performance. *. 1ts focus on internal and external processes may not come easily to firms that have organised themselves on traditional lines. (hanging the way performance is measured may need a radical change in culture and meet significant resistance.

Porter!s 0ive 0orces (ompetition/rivalry / high or low6 $ower of buyers/customers $ower of suppliers Threat of potential entrants Threat of substitutes "ar(eting strateg& / concerned with ma ing choices as to which products you supply and the mar ets into which you sell them Niche 'la&er / a company that chooses to specialise in meeting the needs of a defined customer segment with distinctive products "ar(eting "i* 12Ps3 Prod#ct Price Pro,otion Place $eople $rocess $hysical evidence Porter!s 4ia,ond $orter"s research emphasises the fact that no one nation will have a competitive advantage in all its industries and that competitive advantage will be derived from the strategies pursued by firms in the industry rather than from positive industry policies developed by governments. $orter"s 5iamond model is made up of four determinants or attributes. &or a country to have competitive advantage in a particular industry! it needs to have the following attributes and relationships0avo#rable %actor conditions 7eg natural resources! climate! availability of cheap labour8 do not create a sustainable competitive advantage for a nation. 9owever! advanced factors including a highly educated wor force 7human resources and nowledge8 and appropriate technology and data communications infrastructure may! if continually invested in! yield sustainable high order competitive advantage. 4e,and conditions. There must be a strong home mar et demand for the product or service. This determines how industries perceive and respond to buyer needs and creates the pressure to innovate.

The existence of related and s#''orting ind#stries 7industry cluster8 will be of significance in attracting foreign direct investment. The success of an industry can be due to its suppliers and related industries. 0ir, strateg&, str#ct#re and rivalr&. 5omestic competition is vital as a spur to innovation and also enhanced global competitive advantage. To&ota!s Prod#ction S&ste, 1J#st5In5Ti,e3 + + + + + operating with minimal inventory putting the onus for 0uality assurance on its component suppliers significant reappraisal of the number of suppliers needed a move towards a relationship based on partnership philosophy of continuous improvement + Total :uality Management 7T:M8

"c-inse&!s 6S The model is based on the theory that! for an organi;ation to perform well! these seven elements need to be aligned and mutually reinforcing. So! the model can be used to help identify what needs to be realigned to improve performance! or to maintain alignment 7and performance8 during other types of change

Strateg&: the plan devised to maintain and build competitive advantage over the competition. Str#ct#re: the way the organi;ation is structured and who reports to whom. S&ste,s: the daily activities and procedures that staff members engage in to get the ,ob done. Shared +al#es: called <superordinate goals< when the model was first developed! these are the core values of the company that are evidenced in the corporate culture and the general wor ethic. St&le: the style of leadership adopted. Sta%%: the employees and their general capabilities. S(ills: the actual s ills and competencies of the employees wor ing for the company.

Scenarios / =ohnson and Scholes define scenarios as >detailed and plausible views of how the business environment of an organisation might develop in the future based on groupings of ey environmental influences and drivers of change about which there is a high level of uncertainty". 1n developing scenarios it is necessary to isolate the ey drivers of change which have the potential to have a significant impact on the company and are associated with high levels of uncertainty. 5evelopment of scenarios enables managers to share assumptions about the future and the ey variables shaping that future. They are then in a position to monitor these ey variables and amend strategies accordingly. &or most companies operating in global environments the ability to respond flexibly and 0uic ly to macro+environmental change would seem to be a ey capability.