Strategic Planning Essay On Corporate Strategy
Answer any TWO of the following questions in an essay format. All questions are weighted equally. The two essays are to be submitted in one document, clearly referenced and they must be your own individual work. Normal rules of plagiarism apply.
1. Critically evaluate one model or technique that can be used to generate strategic options for the future of a company. Provide examples to illustrate your points.
2. What are the key points and strategies recommended by the Boston Consulting Group (BCG) model? Critically evaluate the usefulness of the Boston Consulting Group (BCG) model in performing a Portfolio Analysis or a Strategic Business Units (SBUs) analysis.
3. To what extent does the 'design' approach to strategy development give us a complete understanding of how strategies come about? Use relevant academic literature and examples from industry to support your answer.
4. Cirque du Soleil challenged the conventions of the circus industry. It created uncontested market space that made competition irrelevant, by shifting away from the traditional circus show. It moved towards creating impressive professional dancing and acrobats’ performances. Actually, one of the first Cirque du Soleil productions was titled “We Reinvent the Circus.”
What kind of strategy has Cirque du Soleil followed? To what extent is this kind of strategy sustainable for the medium to long term survival of an organization? You can use this example or/and other examples from any industry to support your answer.
5. Outline how budget airlines such as Ryanair and Easyjet have configured their value chains to achieve competitive advantage in the passenger air travel market. To what extent are these strategies likely to provide competitive advantage in the long-term?
The answer to this question of Strategic Planning Essay means that strategic options used for examining and creative alternative responses related to activity arranged in the outer circumstance, which the association is confronting. Vital choices help with exploiting realities, patterns, and openings alongside the danger of the outside world. The options identified with systems are fundamental for the business association because the market continues evolving. For the business association to remain fruitful, it needs in saving the change for its way just as building new procedures to counter new practices. According to Wright (2019), it is discussed in this Strategic Planning Essay that when a business organization assists in sustaining the benefits that surpass the normal for its industry, the firm needs to have an upper hand over its adversaries. The objective is to attain a sustainable advantage.
Balance scorecard refers to the strategic planning model, which offers a big and appropriate picture, which looks at the strategy. The selected technique assists in reflecting the mission, vision along with the strategic focus areas. This technique includes strategy maps, which aid in visualizing and examining each objective. This strategic planning model can assist in making the best choice for businesses in developing or boosting a consumer focus. This technique mentioned herein Strategic Planning Essay focuses on the concern of consumers that is time, quality, performance, and service along with the cost (Thomas, 2019). Additionally, when companies implement a balanced scorecard technique to work, then they should articulate the goals into appropriate and particular measures. In the viewpoint of Hart (2019), describe a balance scorecard is an exhibition metric which uses in key administration to distinguish and improve the distinctive interior elements of business along with their result for attaining the external outcomes. If the company implements the balance scorecard technique then it assists in attaining the maximum revenue and it includes that it provides permission for effective strategic planning because in this multiple factors consider instead of only considering revenue numbers. Another benefit noted in the Strategic Planning Essay for the future of the company is to map out on a single sheet as it makes the communication strategy with the other leaders of business organization. In addition to this, performance reports are useful at the time of utilizing a structured approach. The main reason for this is to envision the exhibition in a groundbreaking alongside a natural way.
Cheng, Humpreys, and Zhang (2018) states that the company can create a balance scorecard in different steps that is the company needs to focus on the different projects which have different perspectives such as business organization should provide the training to team members and then describe the process to them. In addition to this, after explaining the procedure needs to focus on the end-users as well as focus on the financial perspectives. In this Strategic Planning Essay, another step is to select the appropriate strategic objectives for each perspective and in this; involvement of the team should be done by making the long-term objectives and that objective should be measurable. After that, among team members state the objectives properly. Further, the third step is flesh out the strategy map, and in these four perspectives should combine with objectives through the visual map, and from these each objective depicts the cause and effect chain to follow. Another step is measuring and evaluating the success of the company. From the perspectives of Syahdan, Munawaroh, and Akbar (2018), it examined that there are some problems, which generate at the time of implementing a balance scorecard and they are it takes a lot of time to set up effectively in the company. In addition to this, individuals should never understand this technique fully and because of that fail to attain the benefits. This technique outlined in the context of Strategic Planning Essay is too rigid and does not account for the variations in the business landscape. Additionally, it provides a special focus on financial measures instead of all measures. Apart from this, it provides focus internally by completely avoiding macro-economic or competitive aspects of running a business. However, the truth for the balance scorecard is that it is an excellent tool, which implements in the company to attain maximum benefits and the success for future of business organizations.
A balance scorecard is a technique, which utilizes in generating the strategic options for the future of the company. It provides a bigger picture to look at the strategy. The starting point of the Balance scorecard is the mission and vision of the organization. From the perspectives of Lucco (2015), demonstrate that to visualize each objective, strategy maps are used which results in the development of customer focus. A balance scorecard is not just limited to a Strategy map; however, a strategy map is a significant component of the balance scorecard. A strategy map helps in putting the strategy on a page in the language, which everyone understands. Four important perspectives of this strategy include Customer, Financial, Internal Process, Learning, and Growth. For example, let us consider a hypothetical example of an airline, called Supreme airlines. In this case of Strategic Planning Essay, the money related point of view of the Balance scorecard is to expand the estimation of the investors. The client point of view of the Balance scorecard, in this case, will be the frequent and reliable departures in comparison to other travels and having very low-ticket prices. In this case, the interior procedure points of view of the Balance scorecard are too cost-effective, innovative, and create relationships. By cost-effective, it means to have no-frills, high utilization, and standard fleet. By innovative, it means having direct routes, good locations, and faster ground turnaround. By creating relationships, it means to have no elites and having a fun experience. Learning and Growth perspective of the Balance scorecard, in this case of Strategic Planning Essay, will be the high employee ownerships, high compensation, and flexible union contracts.
Figure 1: Balance scorecard of supreme airlines
Source: (Lucco, 2015)
After summarizing the whole essay, it concludes that a balance scorecard is a business framework along with the management system, which is utilizing to track as well as manage the strategies of the business organization. This technique presented in the Strategic Planning Essay used in businesses, non-profits along with the governments. The main usage of a balance scorecard is to communicate or transfer the information, which the company wants to accomplish and determine which projects; products along with services need to prioritize. Apart from this, it is also specifies in this Strategic Planning Essay that the implementation of the selected technique describes the attainment of goals and targets and according to that company describes the success of the company.
According to the research on Strategic Planning Essay, Boston Consulting Group (BCG) model also known as the growth-share matrix is a planning tool, particularly used for portraying the brand portfolio of the firm on a quadrant. In the level hub of the BCG framework, there is a hub of relative piece of the pie while on the vertical pivot there is a hub of the speed of market development. To assess the situation of the brand portfolio, the Boston Consulting Group creates this matrix. It classified into four groups based on competitive position and industry attraction, which used to reveal the likely profitability in terms of cash generated. The general purpose of the Boston Consulting Group matrix is to understand the brands in which investment needs to done or the brands, which need to divest. One of the dimensions in the Boston Consulting Group matrix presented in this Strategic Planning Essay is the relative piece of the overall industry, which used to assess the business portfolio (Jurevicius, 2013). Higher the piece of the overall industry, the higher the money returns of the business in light of the fact that as the creation expanded, and economies of scale accomplished prompting an expansion in benefits. Another dimension in the Boston Consulting Group matrix is the market development rate. Higher the market development rate implies higher the income but the same achieved through increasing the investment for stimulating the growth rate. It also results in burning much cash so those players only, which are cash users and invest only when the market share is increased or maintained in the future, use it.
Figure 2: BCG Matrix
Source: (Management Consulted, 2020)
Boston Consulting Group (BCG) matrix divided into four quadrants Dogs, Cash Cows, Stars, and Question marks. Dogs represent those that have low market share in comparison to their competitors and they operate in such a market where growth rate is slow. According to the words of Martin (2019) considered to prepare this Strategic Planning Essay, states that it is not advised to invest in Dogs because of their low or negative money returns. In any case, a few canines for longer periods might be productive and can give collaborations to other brands. Therefore, deeper analysis is required for each brand to know about its worth investing or not. Dogs are having a low piece of the pie and low market development. Key decisions for hounds incorporate Liquidation, Retrenchment, etc. The most profitable brand is Cash Cows they should milk as much as possible to maximize the cash. Cash generated from them should invest in stars to support their growth. As per Boston Consulting Group, matrix cash should only invest in Cash Cows to keep up their present piece of the pie and not to expand development. Money Cows are having a high piece of the pie and low market development. Vital decisions for Cash Cows incorporate new item advancement, broadening, and so forth. Hanlon (2019) depicts that the quadrant, which works in high development businesses and can keep up its high piece of the pie known as Stars. They are the two generators and clients of the money. Cash ought to put resources into Cash Cows as they expected to generate positive cash flows and become Cash Cows. However, not all the stars become Cash Cows because of the rapid change in the industries, where even the new products can outdated by the new technological advancements resulting in stars turning into dogs instead of Cash Cows. Stars are having a high piece of the overall industry and high market development. Vital decisions for stars incorporate market and item advancement, display entrance, Horizontal and vertical coordination, and so forth. The last quadrant of the Boston Consulting Group lattice is question marks. These brands require nearer thought. In the quickly developing markets, where a lot of money devoured and misfortunes incurred, they hold low market shares. The Strategic Planning Essay examines the words of Torquati et al., (2018) which states that Question marks have the potential to become stars by increasing their market share and becoming Cash Cows. However, it not always guaranteed for question marks to become successful even after huge investments. Sometimes they even battle to pick up piece of the pie and in the end become hounds. In this manner, it is important to consider them in deciding whether it is worth to invest them or not. Question marks are having a low piece of the overall industry and high market development. Key decisions for question marks incorporate divestiture, market, and item improvement, advertise entrance, and so forth.
Boston Consulting Group matrix is very easy to perform and helps in understanding the business portfolio's strategic positions. It also considered a good starting point for conducting detailed analysis. In Boston Consulting Group matrix analysis, first of all unit is chosen for which analysis is required to be done. Afterward, the market defined and the cumulative market share is calculated. Finally, the market growth identified and brands allocated accordingly in the Boston Consulting Group matrix. Based on the Boston Consulting Group matrix build in the above section of Strategic Planning Essay, four potential strategies can be followed which are Build, Hold, Harvest, and Divest. From the perspectives of Madsen (2017), states that Build refers to increasing the investment in the product to increase the market share and further making it stars and then Cash Cows. Hold used when further investment cannot be done in the product. In this case of Strategic Planning Essay, it kept in the same quadrant as it is. In the case of harvest, investment reduced and it tried to take out most extreme money from the item to build its gainfulness. Reap significantly utilized for Cash Cows. Strip alludes to the discharging of cash, which is as of now stuck in the business and it majorly used for dogs.
From the above analysis made in the Strategic Planning Essay, it concludes that the Boston Consulting Group matrix used to analyze products, companies, or brands based on their development rates and the market share in comparison to their largest competitors. However, its use has diminished now because of its inherent limitations. However, with the limitations in mind, it can be used as an important tool in this era also. Therefore, the Boston Consulting Group matrix quadrants cannot be applied blindly. They should not replace strategic thinking and should only work as general investment guidelines. For making reasonable investment decisions, a firm should rely on various factors such as the judgment of management, strength, and weakness of the unit of business and external environment factors.
Cheng, M. M., Humpreys, K. A., & Zhang, Y. Y. (2018). The Interplay between strategic risk profiles and presentation format on the manager's strategic judgments using the balance scorecard. Strategic Planning Essay Accounting, Organization and Society, 30, 1-14.
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Hart, M., (2019). 8 Strategic Planning Models and Tools for the Customer-Focused Business. Retrieved from: https://blog.hubspot.com/sales/strategic-planning-models
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Syahdan, S. A., Munawaroh, R. S., & Akbar, H. M. (2018). Balance Scorecard Implementation in Public Sector Organization, A Problem?. International Journal of Accounting, Finance, and Economics, 1(1), 1-6.
Thomas, J., (2019). A Balanced Scorecard in Action: Manage Your Company Better in 4 Steps. Retrieved from: https://toggl.com/blog/balanced-scorecard
Torquati, B., Scarpa, R., Petrosillo, I., Ligonzo, M. G., & Paffarini, C. (2018). How can consumer science help firms transform their dog (BCG Matrix) products into profitable products?. In Case Studies in the Traditional Food Sector (pp. 255-279). Strategic Planning Essay Woodhead Publishing.
Wright, T., (2019). How to Implement the Balanced Scorecard (2019 Update). Retrieved from: https://www.executestrategy.net/blog/how-to-implement-the-balanced-scorecard