ASSIGNMENT FOR MID-TERM

Course Title: Strategic Management

Course Code: MBS 501

Program: MBA

Submitted To:

SHOWKAT ARA KHANAM

Assistant Professor

Green Business School

Green University of Bangladesh

Submitted By:

Sazzadul Islam

Id: 203005006

Green Business School

Green University of Bangladesh

Date of Submission: 01/08/2021

 Answer to the Question no. 1

Use the telephone to contact business owners or top managers. Find an organization that
does strategic planning. Prepare a critique of that business organization based on the
following questions:

a. How does the firm formally conduct strategic planning?

Answer: A strategic plan refers to a company’s game plan. In today’s world many companies are
conducting strategic plan to achieve their organizational goal. In Bangladesh, there are many
organization who formulate and involve in strategic planning. Online money transfer giant
Nagad started their journey with a unique strategy to capture its market by offering them various
offers, one of them is a facility which helps them to send money to any active number. So the
receiver has to open an account to withdraw the money, and in this way they will become a
customer of the company. The strategic-management process consists of three stages: strategy
formulation, strategy implementation, and strategy evaluation.

b. Who is involved in the process?

Answer: Strategic planning begins from the top management. The strategic planning process
involves the senior managers of an organization, and any key employees, who can actively
contribute to the long-term planning of the organization. Each management team must decide
who should participate in the planning process. The CEO and executive team play a big role in
setting the foundation of a strategic plan by creating guiding organizational principles,
articulating the strategic areas of focus, and creating the long-term goals that guide the
organization to create aligned goals and actions to achieve its vision of success.

c. What are the benefits of engaging in strategic planning?

Answer: Strategic planning offers several benefits. Such as:

It allows for identification, prioritization, and exploitation of opportunities.

It provides an objective view of management problems.
It represents a framework for improved coordination and control of activities.
It minimizes the effects of adverse conditions and changes.
It allows major decisions to better support established objectives.
It allows more effective allocation of time and resources to identified opportunities.

d. What are the major costs or problems in doing strategic planning?

Answer: The major problems in doing strategic planning are:

❖ Waste of time: Some firms see planning as a waste of time because no marketable
product is produced. Time spent on planning is an investment.
 ❖ Too expensive: Some organizations see planning as too expensive in time and money.
❖ Laziness: People may not want to put forth the effort needed to formulate a plan.
❖ Content with success: Particularly if a firm is successful, individuals may feel there is
no need to plan because things are fine as they stand. But success today does not
guarantee success tomorrow.
❖ Fear of failure: By not taking action, there is little risk of failure unless a problem is
urgent and pressing. Whenever something worthwhile is attempted, there is some risk of
failure.
❖ Overconfidence: As managers amass experience, they may rely less on formalized
planning. Rarely, however, is this appropriate. Being overconfident or overestimating
experience can bring demise. Forethought is rarely wasted and is often the mark of
professionalism.
❖ Prior bad experience: People may have had a previous bad experience with planning,
that is, cases in which plans have been long, cumbersome, impractical, or inflexible.
Planning, like anything else, can be done badly.
❖ Self-interest: When someone has achieved status, privilege, or self-esteem through
effectively using an old system, he or she often sees a new plan as a threat.
❖ Fear of the unknown: People may be uncertain of their abilities to learn new skills, of
their aptitude with new systems, or of their ability to take on new roles. Content with
success: Particularly if a firm is successful, individuals may feel there is no need to plan
because things are fine as they stand. But success today does not guarantee success
tomorrow.

e. Do you anticipate making any changes in the strategic-planning process at the

company of your choice? If yes, please explain.

Answer: Yes I do. In Nagad the customer faces various problems which need to be attended for
the betterment of the company. Nagad should establish more and more uddokta point so that
their customer can easily withdraw money from the point. Uddokta point plays an important role
in the process reaching maximum customer within an area. More Uddokta point can advertise
itself as a strategy. Those uddokta point can introduce wifi facility to attract more customers.

Answer to the Question no. 2

Use Porter’s Five-Forces Model to evaluate competitiveness among the textile industries.

Porter's Five Forces is a model that helps us to identify and analyze five competitive forces that
shape every industry and helps determine an industry's weaknesses and strengths. Five Forces
analysis is frequently used to identify an industry's structure to determine corporate strategy of a
company or industry. Porter's model can be applied to any segment of the economy to
understand the level of competition within the industry and enhance a company's long-term
profitability. Every company or industry must evaluate the environment that affects their
business in any way. For analyzing the factors affecting their business, porter’s five force
analysis can help to evaluate the competitiveness. A corporation task environment is typically the
industry in which firm operates. I am doing the analysis with the help of Porter’s Five-Force
model.

Porter’s Five-Forces Model to evaluate competitiveness among the textile industries:

Porter five force analysis consist of following five forces:

Threat of New Entrants,

Threat of Substitute Products or Services,
Power of Buyers,
Power of Suppliers,
Competitive Rivalry among Existing Firms.
1. Threat of New Entrants: A company's power is also affected by the force of new
entrants into its market. The less time and money it costs for a competitor to enter a
company's market and be an effective competitor, the more an established company's
position could be significantly weakened. An industry with strong barriers to entry is
ideal for existing companies within that industry since the company would be able to
charge higher prices and negotiate better terms. Microeconomics teaches that profitable
industries attract new competition until the downward pressure on prices has squeezed all
the economic profit from the firms. New firms in an industry put downward pressure on
prices, upward pressure on costs and an increased necessity for capital expenditures in
order to compete. The less threat there is from firms entering the industry, the more stable
a firm's profits are.
2. Threat of Substitute Products or Services: A substitute is a product that performs the
same or similar function as another product. The price of substitutes acts as a ceiling to
the price of the subject product. An attractive price of a substitute acts inhibits an industry
from reaching its profit potential. Increased quality of substitutes: If the quality of a
substitute is high, there is increased pressure to increase the quality of the subject
product. This force focuses on substitutes. Substitute goods or services that can be used in
place of a company's products or services pose a threat. Companies that produce goods or
services for which there are no close substitutes will have more power to increase prices
and lock in favorable terms. When close substitutes are available, customers will have the
option to forgo buying a company's product, and a company's power can be weakened.
Understanding Porter's Five Forces and how they apply to an industry, can enable a
company to adjust its business strategy to better use its resources to generate higher
earnings for its investors.
3. Power of Buyers: The more powerful a buyer is relative to the seller, the more influence
the buyer has. This influence can be used reduce the profits of the seller through a
 reduction of prices, increased favor in customer service or order delivery, or influence
over who the seller supplies to. The ability that customers have to drive prices lower or
their level of power is one of the five forces. It is affected by how many buyers or
customers a company has, how significant each customer is, and how much it would cost
a company to find new customers or markets for its output. A smaller and more powerful
client base means that each customer has more power to negotiate for lower prices and
better deals. A company that has many, smaller, independent customers will have an
easier time charging higher prices to increase profitability.
4. Power of Suppliers: The next factor in the five forces model addresses how easily
suppliers can drive up the cost of inputs. It is affected by the number of suppliers of key
inputs of a good or service, how unique these inputs are, and how much it would cost a
company to switch to another supplier. The fewer suppliers to an industry, the more a
company would depend on a supplier. As a result, the supplier has more power and can
drive up input costs and push for other advantages in trade. On the other hand, when there
are many suppliers or low switching costs between rival suppliers, a company can keep
its input costs lower and enhance its profits.
5. Competitive Rivalry among Existing Firms: The last of the five forces refers to the
number of competitors and their ability to undercut a textile company. The larger the
number of competitors, along with the number of equivalent products and services they
offer, the lesser the power of a company. Suppliers and buyers seek out a company's
competition if they are able to offer a better deal or lower prices. Conversely, when
competitive rivalry is low, a company has greater power to charge higher prices and set
the terms of deals to achieve higher sales and profits.

Rivalry among industry players can affect industry profits through

❖ Downward pressure on prices,
❖ Increased innovation,
❖ Increased advertising,
❖ Increased service/product improvements, among others.

Factors that increase competitive rivalry among existing firms include: Large Number of Firms:
If there are more firms within an industry, there is an increased competition for the same
customers and product resources. There is even greater competition if industry players are equal
in size and power, as rivals compete for market dominance.
The End