As members of the senior management team of Able Corporation, your group has been asked to prepare a presentation for the Strategic Officers Steering Committee (SOS-C) of Walden International, the parent company of Able Corporation. The purpose of this presentation is to obtain permission from them to go forward with the next step (developing a full blown business plan) for Able’s strategic initiative to break into the global marketplace.
Paper should include the following.
· An external analysis (opportunities and threats) of the environment that Able is proposing to enter
· A preliminary outline of the business plan to be developed for Able’s strategic initiative
· A rudimentary mission statement
· Key operating principles
· A preliminary market analysis
· The one-year, five-year, and ten-year strategic objectives of the strategic initatives
Any additional material that you considers necessary to support the case for going forward with Able’s global strategic initiative.
BACKGROUND INFORMATION
INTRODUCTION
Able Corporation is a company based in the United States and locally manufactures various tools and gadgets such as lawn mowers, microwaves and ranges. While the company is already operating successfully within the American and Canadian market, the company intends to expand its business more to other foreign markets. This discussion will then be centered on the identification of essential factors the company must take into account in order to expand globally.
Identity Development
In order to develop the appropriate strategies for its global plans, Able Corporation must first define its identity as well as develop its mission statement. In order to develop the company’s identity, a situational analysis must first be conducted. The aim of this step is to define the key successful factors of the company as well as its problem areas that would support or hinder its global business plans. Through situational analysis, the company will also be able to recognize its available sources that can be used for its planned strategies. For this purpose, the company can make use of different analytical tools. The most common of which is the SWOT analysis, where the company’s strengths, weaknesses, opportunities and threats are considered. The company can also make use of PEST analysis in strategic planning and implementation. This tool evaluates the political, economic, socio-cultural and technological factors that affect the company. This is mainly used in order to analyze the businesses’ macro environment. The use of these tools will then help the company to develop its direction or mission statement. The information for the analysis can be obtained from a number of resources including company records, financial reports, sales reports and employee performance records. Gathering information about the company can also be done through researchers and analysts. This step stresses the necessity of developing well-defined strategic goals based on the company’s identity before pursuing set business plans; in this way, failure and losses due to ineffective strategies can be avoided.
Resource Considerations
Based from the developed identity of the company, information on the different resources of Able Corporation will be identified. These resources should be considered in order for the company to make the most of its strengths and avoid costly strategic developments. For instance, the production of the company’s products is done locally; should the company pursue its goals of operating internationally, it should then consider how it plans to produce products for a greater number of consumers. One of the important resources of the company is its contacts with large retailers for its product distribution; the strategic plan of the company should then identify how it will distribute its products abroad. Will the company contact foreign retailers or will it use the online marketing and product distribution features offered by American retailers? In order to make an effective global strategic plan, Able Corporation should not only identify what resources are available but also how these resources will be utilized or modified.
Strategic Implementation
In terms of strategic implementation, Able Corporation should consider using the principle of balanced standardization and adaptation strategy. This strategy has been debated over in relation to foreign market entry and strategic implementation. One side of the argument claims that keeping with the standard operations of the global company is the most efficient for entering other foreign markets; this means that the conventional practices of the company will be applied to all its foreign branches. However, it has been noted that the differences in political, cultural and economic features of countries abroad limits the efficacy of the standardization theory; thus, adapting to the traditions of the targeted foreign market was stressed to be the most effective solution (Subramaniam & Hewett, 2004). The debate was resolved by emphasizing that a balance between standardization and adaptation strategies should be observed among multinational companies. Through this implementation principle, the company will be able to combine the most effective strategies that would suit differing foreign business environment.
Progress Assessment
The process of strategic management does not stop from the implementation process; thus, it is also necessary that Able Corporation develops a system that would evaluate its strategic progress. Assessing the outcome of the implemented strategy is essential as this would determine whether the objective of the company to operate globally has been achieved successfully. This step is also important in enhancing the existing strategy and addressing identified problem areas (Kaplan & Norton, 1996). In order to carry out this procedure, Able Corporation should consider using both financial and non-financial indicators. While the sales, product volume and market growth are important indicators of progress, the company should also take note of non-financial indicators of good business performance such as customer satisfaction and employee performance.
Conclusion
In order to strategically succeed in the global business environment, a company must consider multiple factors. For one thing, a company planning to enter foreign markets must have a clear business objective and sufficient resources to support its achievement. It is also essential that the company is aware how these resources will be utilized. Appropriate approaches in strategic implementation should also be used. Finally, an implemented strategy should be assessed to ensure that intended business outcomes and continuous progress are achieved.
References:
Kaplan, R. S. & Norton, D. P. (1996). The Balanced Scorecard. Boston, MA: Harvard Business School Press.
Subramaniam, M. & Hewett, K. (2004). Balancing standardization and adaptation for product success in international markets: Testing the influence of headquarters-subsidiary contact and cooperation. Management International Review, 44(2), 171-194.
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