Strategic Management is a set of decisions and actions that results in the formulation and implementation of plans to achieve the company’s objective. The main elements in Strategic management are as under:
Environmental Scanning
An organisation exists in an Environment and hence to determine the future direction of the organization its environment has to be scanned. Environmental scanning is the procedure of gathering information about events and their relationships within an organization's internal and external environments.
PESTEL Analysis is used as a tool by companies to track the environment they’re operating in or are planning to launch a new project/product/service etc.
PESTEL stands for P for Political, E for Economic, S for Social-cultural,
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What is the influence does the local culture have on the market?
What type of technological advancements is expected to come into the market and how will it affect the market?
What are the environmental factors, rules and regulation are likely to affect the industry?
What are current legislative regulations that govern the industry and what are chances of change or introduction of new or modified one?
All the aspects are crucial for any industry and an understanding of these factors will form the backbone of a good strategy. It is also important to point out that the answers for these factors may affect different industries in different ways
There are various approaches that can be used to sort out information for environmental scanning.
Systematic Approach:
This approach involves systematic collection of data from the market and continuous updating of this data is essential for strategic management and also the operational activities.
Ad hoc Approach:
This approach is done as when data is needed for a specific purpose the particular environment is scanned. This could be done for a specific project or evaluate the existing strategy or to devise a new
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Vision Statement – A vision statement which should be crisp and to the point should be brought out. An effective vision statement brings out the core ideology that binds the organisation and how the future is envisioned. It should bring out the core purpose of existence of the organisation.
Mission Statement- This would actually determine the methodology of the company in reaching its vision, its purposes and its philosophy behind its goals. The mission statement helps to determine the allocation of resources, establishes the premises, facilities accountability, performance criteria for mission achievement.
Strategic Objective- This step in the strategic formulation process the organization identifies the performance targets needed to reach clearly stated objectives which could include market position, production of goods, desired market share, customer services, innovations and sales increases. All stakeholders need to be informed of these objectives and their
403 1. The difference between the following terms are: Strategic management is the process of assigning responsibility to implement and monitor the activities that must be accomplished to reach the goal. Strategic planning is a method used to define the tasks and operationalize activities that must be accomplished to reach an identified or agreed-upon goal. Strategic thinking is a mental process of synthesizing and analyzing information to envision the strategies and tactics needed to achieve an ultimate goal. Strategy is a set of related actions that leadership makes to increase the organization 's performance on agreed upon and significant outcomes and benchmarks.
2. Analysis of the Industry, market size, competition, etc. 2.1. PESTLE A market is the place or medium where specific activities are transacted between businesses and consumers. To study the macro-environment (i.e., external environment), PESTLE analysis is considered to be the most appropriate as suggested by Kotler and Armstrong (2010).
Recognizing an organization’s mission and values in the strategic planning process is always the first step. To a few organizations, this step would include revisiting and occasionally reworking the mission and values if necessary. To some organizations, it would be the first time they are sitting their mission and values. “Mission statements define the nature, purpose, and role of organizations; focus resources; and guide planning” (Keeling 213). They represent the route wherein the organization is proceeding.
We will now be doing a more detailed analysis on these six PESTEL factors. PESTEL refers to the Political, Economic, Social, Technological, Environmental and Legal forces,
The goals created for the organization have to be aligned with the strategic goals and overall mission of the entire organization.
PESTLE ANALYSIS OF INDIA-BHP BILLITON (IRON ORE, COAL, COPPER AND URANIUM COMPANY) A PESTLE analysis is basically a framework that categorizes environmental influences as Political, fiscal, Social and Technological forces. The analysis examines the impact of each of these explanations (and their interplay with every different) on the business. Philip Kotler claims that PESTLE evaluation is a useful strategic tool for understanding market progress or decline, business position, advantage and path for operations. Political causes affecting trade specially revolve round taxes, import and export tariffs, environmental and labor legal guidelines, abilities subsidies, and the steadiness of a given operational area.
1. Define the following terms: GIS; A geographic information system is system made to capture, store, manipulate, analyse, manage, and present spatial or geographical data. FOSS; Free or Open Source Software. FOSS programs have licenses that allow users to freely run the program for any purpose, modify the program as they want, and also to freely distribute copies of either the original version or their own modified version. ILWIS; Integrated Land and Water Information System is a GIS / Remote sensing software for both vector and raster processing.
It relates to the purpose of the company and what they want to achieve in the future. The mission goes beyond the vision as it explains the company’s goals and objectives more clearly. It also mentions how this will be accomplished. The last step is to create a strategy based on the defined vision and mission. (Miller, 2014) Tesla’s mission is ‘to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible’.
PESTEL analysis is a tool that is used to analyse an organisation’s macro-environment. Political Environment The incident of 9/11 has affected the airline industry adversely. The number of tourists to different countries has immensely decreased due to the fear of safety and security issues. On the other hand countries have put measures in place such as strict visa policies and border controls in an effort to combat terrorism attacks.
Francis Aguilar (1967) is the first known reference to the origin of the PESTEL analysis. In his study known as Scanning the Business Environment, he studied the environmental factors that affect business environment and come up with the first acronym ‘ETPS’ which meant the Economic, Technical, Political and social factors (Aguilar, 1967). Later Arnold Brown (1967) focused on the study and came up with a new perspective towards the study of social-technical, economic, political, and ecological (STEPE) factors. In 1980, Porter among other authors scanned the business environment and came up with the current acronym PESTEL meaning political, economic, social, technological, legal, and environmental factors (FME, 2013). According to Collins (1997),
2.0 Porter’s five forces of Levi’s Strauss Threat of new entrants – low • Entry into a market where the production volume is so high already is not really a threat because the cost of production goes down. • Levi’s can produce more at a lower price and possibly sell for more. Bargaining power of supplier – low • Competition within manufacturer is high since it is mass – produced. • Manufacturer is located in many third world countries: Central America, China, Cambodia therefore Levi’s can switch to other manufacturer easily.
PESTLE analysis is include of political, economic, social, technological, legal and environmental factors. PESTLE is a business tool that used by companies to track and analyse the macro environment in which the company operate. This tool is very useful which help in overall growth and development of organization after learning from the past mistake and working for future. The first factor is political factor which include such as law of land, taxation policies, rules and regulation, trade restriction and so on.
It is the planning before the action. In includes many activities like making decisions, making strategy for organization etc. At this time strategic planning is an important part of strategic management. Strategy describes how the goal achieves by using the available resources or what kind of resources they need to achieve the goals. This strategy is used when the organization wants to set the goals and wants to make the planning to achieve these goals by available resources.
Managing talent has emerged as one of the greatest problems faced by MNC’s in India. Using three examples from industry, illustrate how organizations are managing talent in their organization? In one of the interview by Mark Zuckerberg reveals his thought on talent “Hiring for talent is more relevant than hiring for experience.” He also mentioned Less-experienced new hires may be willing to take more risks and have more potential than people with good amount of experience while joining.
2.0 PESTEL ANALYSIS A PESTEL Analysis is a marketing framework to analyse how an organisation is being impacted by a wide range of external imperatives. 2.1 Political Local political factor has a less significant impact on Starbucks Singapore due to strong political stability in Singapore. Singapore is consistently ranked as the lowest political risk country in Asia since 2002 (Corrupt Practices Investigation Bureau, 2015). However, the political stability in the global market is highly important as Starbucks coffee is certified as an ethically traded coffee.