Angkasa Training Centre

Universiti Teknologi Malaysia

STUDENT’S NAME : NARENDRA KUMAR REDDY A/L LACHIMPADI

I/C NO : 731125-05-5275

PROGRAMME : PROFESSIONAL MASTER IN BUSINESS

ADMINISTRATION

CLASS DATE : 26 & 27 MARCH 2022

INTAKE DATE : JUNE 2021

MODULE : STRATEGIC MANAGEMENT

TRAINER’S NAME : CIK RITA SALWANY

CENTRE : ATC SEREMBAN

OVERALL MARK : TEST

(Fill up by Trainer)

TASK MARKS

1 (15 marks)
2 (10 marks)

TOTAL (15marks)

FINAL MARK
(25%)
TEST : STRATEGIC MANAGEMENT

TASK 1
Discuss the steps of the Strategic Planning Process. In this discussion, you should include
definitions and examples for corporate vision, mission and objectives along with brief
descriptions of the concepts of ‘core competencies’ and ‘competitive advantage.
(10 marks)

To begin this discussion let us first understand the definition of Strategic Planning Process.
In our daily working life , there are anywhere between 4 to 10 steps that we should take to
begin this process .

ANSWER
1. What is Strategic Planning Process ?
The five steps in the strategic planning process are, in the simplest terms, the method used
by organizations to develop plans to achieve overall, long-term goals.This method varies
from the project planning approach used to organize and delegate assignments for specific
projects, or strategy mapping, which allows you to define your mission , vision and
objectives.
The five steps in the strategic planning process that we will discuss are more
comprehensive where it helps us create a roadmap for which strategic goals we should
make an effort to achieve, and which initiatives are less useful to the business. It will also
help us understand our internal and external strategies..

In the beginning itself we must first determine the following :

• Set our Vision.
• Set our Mission which is What and for Whom are we doing this for.
• How to measure our strategy towards our Objectives.

A good example of this can be seen in Apple Inc as below :

Apple’s Mission is:
“to bring the best user experience to its customers
through its innovative hardware, software, and services.”

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This simply translates to :

a) Best user experience
b) Innovative hardware
c) Innovative software and services
From these 3 elements , it can also be derived how the organizational structure is designed
and crafted. Paying great attention to detail,
Therefore, at Apple user experience comes first; this gives great power to design and
designers over engineers.

The Vision statement sets the stage to the company’s core believes. These core believes
do not change year over year but instead follow the company life throughout several cycles.
It is about how we see ourself in the long-term.Thus, an example from Apple Inc:

“We believe that we are on the face of the earth to make great products
and that’s not changing. We are constantly focusing on innovating. We believe in the
simple not the complex. We believe that we need to own and control the primary
technologies behind the products that we make, and participate only in markets
where we can make a significant contribution. We believe in saying no to thousands
of projects, so that we can really focus on the few that are truly important and
meaningful to us. We believe in deep collaboration and cross-pollination of our
groups, which allow us to innovate in a way that others cannot. “

Breaking this in simpler terms . its basically whats stated below:

a) Making great products.
b) Focusing on innovation.
c) Simplicity in place of complexity.
d) Control the primary technologies behind Apple’s products.
e) Focus on a few key projects.
f) Excellence as the standard.

It's important to consider why we primarily do strategic planning:

• To get our team on the same page and align with the vision, mission, and goals of our
organization;

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TEST : STRATEGIC MANAGEMENT

• It is maximizing our organization's resources to avoid wasting time and money on

unimportant projects or activities;
• To understand the trends and scenarios in the industry that might affect our organization
in the coming years;
• To Develop an action plan for keeping us on track and to be responsible for the outcomes.

2. The 5 Steps of Strategic Planning Process

There are mainly 5 steps during the strategic planning in general:

Step 1: Clarify our Strategic Position

This phase of preparation sets the stage for all the work to progress. It will decide how and
where to get at .
Considering both internal and external sources, get the right stakeholders involved right
from the start. Identify our main competitive issues by talking to the company's managers,
selected staffs at the lower level , collecting input from clients, and gathering business and
consumer data to get a better view of the market and customer role.
We then use a SWOT diagram as a framework for our initial assessment. \
Example : Pls see an example from Apple Inc as below,

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TEST : STRATEGIC MANAGEMENT

Step 2: Prioritizing Our Objectives

Once the current market position has been established, we must select the objectives that
will assist us to meet our expectations. Specific objectives will be in line with the mission
and direction of the organization.
Objectives must be distinguishable and quantifiable to help achieve the strategic long-term
goals and initiatives identified in step one.
To do this, we can use a tool called SMART - Specific, Measurable, Actionable, Relevant,
and Timeliness. SMART goals are useful in setting a timeline and identifying the capital and
resources should be achieved, and also key performance indicators ( KPIs) for measuring
it’s success. So that everyone in the organization could incline to work harder for making
goals true.

Step 3: Formulate the Strategy

This phase involves identifying the strategies required to accomplish the goals and mapping
out a schedule and effective method of communication to the staffs respective
responsibilities.
Strategy structuring is used to visualize the entire plan. Furthermore, operating from the
top-down structural maps makes it possible to see market operations and to find progress
opportunities. Since the market and economic conditions are dynamic, the creation of
alternative solutions to address each phase of the strategy is crucial at this point.

Step 4: Implement and Manage The Strategy

Effective implementation of the strategy is key to our growth This phase is the action stage
for the strategic management process.

Step 5: Monitor and re-evaluate Strategy

The strategic plans and priorities will be checked and revised every month depending on
the period we set for implemention in this cased 6 months. It must incorporate the business
adjustments, and ensure targets are based on the organization's constantly-changing
environment.
Strategy assessment and control actions include performance measurements, consistent
review of internal and external issues and, where necessary, corrective actions. Any
successful strategic evaluation starts with the definition of the parameters to be measured.

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TEST : STRATEGIC MANAGEMENT

3. Core Competencies & Competitive Advantage

Core competencies differentiate an organization from its competition and create a
company's competitive advantage in the marketplace. Typically, a core competency refers
to a company's set of skills or experience in some activity, rather than physical or financial
assets. A key competitive advantage for the company is its ability to develop innovative
products that share the same operating system, software and applications. This minimizes
the risk, timescale and costs of product development, enabling the company to introduce a
stream of new products and stay ahead of competitors.

Example : Taking Apple Inc again , It's main core competency is innovation. They have a
long history of developing unique and innovative technology products, including the Mac
computer, iPod, iPhone, iPad, Apple TV, and Apple Watch.And their key competitive
advantage is Apple’s innovative strategy of developing products that complement each
other which strengthens customer loyalty and helps build a barrier to competition.

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TEST : STRATEGIC MANAGEMENT

Task 2
Explain how the SWOT Analysis has helped you to carry out an organizational audit for one
of your client companies and another is how the firm would carry out an environmental
audit for one of your clients by utilizing the PORTER Five Forces.
(15 marks)

ANSWER

1. Definition of SWOT analysis

SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses,
and for identifying both the Opportunities open to you and the Threats you face both
internally and externally.
It’s a methodological tool designed to help workers and companies optimize performance,
maximize potential, manage competition, and minimize risk. It is about making better
decisions, both large and small. It can help you determine the efficacy of something as
small as introducing a new product or service or something as large as a merger or
acquisition.

2. Reasons for using SWOT analysis.

SWOT is a method that, once mastered, can only enhance performance. It’s so powerful
that, with a little thought, it can help us uncover opportunities for the best placement in order
for better exploitation . By understanding the weaknesses in our business, we can manage
and eliminate threats that would otherwise catch us by surprise.

3. When to conduct SWOT?

We can use a SWOT analysis in two predominant ways – as a simple icebreaker helping
people get together to "kick-off" strategy formulation, or in a more sophisticated way as a
serious tactical tool in the competitive sense.

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TEST : STRATEGIC MANAGEMENT

4. Components of SWOT
SWOT consists of four components--Strengths, Weaknesses, Opportunities, and Threats.
These four components are organized into two categories--internal and external. That is,
look internally for Strengths and Weaknesses, and look externally for Opportunities and
Threats.

i) Strengths
Identify our quality and reliability. More specifically, Charlie Loannou defines
strengths as “the resources and capabilities that can be used to develop a
competitive advantage” (Ioannue, SWOT Analysis - An Easy to Understand Guide,
47-49).
This brings us to perhaps the most important aspect of the Strengths assessment: it
is imperative that we analyze our strengths (and weaknesses) in relation to our
competitors. In other words, what are the unique features of our company--a well-
established company with established brand trust, lower production costs, superior
customer service, stronger web presence, etc.--that will provide a competitive
advantage

ii) Weaknesses
Identifing our weaknesses. We need to be honest with ourselves. One way to think
of weakness is the absence of strength. Therefore, the items of our business model
we did not identify as strengths above are the first place to look for weaknesses.
Cash flow, brand recognition, marketing budgets, distribution networks, the age of
the company, etc. are all places to consider when assessing weaknesses. The idea
here is that we must turn these weaknesses into strengths. Find ways to improve.

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TEST : STRATEGIC MANAGEMENT

iii) Opportunities
Here is where you identify the opportunities for growth, greater margins, and larger
market share. Again, assessing opportunity in relation to competition is imperative.
What opportunities are there for you to distinguish your company from your
competitors? What opportunities can you identify to offer a similar service or product
at a higher quality or at a lower price than your competition? What are the needs of
your customers that your field does not currently address?
Technology is an external factor that always presents new opportunities and, as we
shall see, new threats. What technological innovations open up new opportunities
for your business to lower costs, speed up production, market more effectively, or
improve customer service?
The key with Opportunities is that they must be acted on. If Not, our competitors
will.

iv) Threats
Which area is our company at risk? Is our competitor developing a product to
compete with one of ours? Is there a new or bigger company poaching our best
employees? These are all threats to our business.
What about new legislation? Does a new law or proposed law threaten our
production costs? What about new tax laws? A yes to any of these equals a threat.

Lastly, just as technological innovation may provide an opportunity; it can also issue
a threat. Threats to the business now include lawsuits over insurance liability,
legislation proposing banning the service, and higher profit margins at competing
companies.

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TEST : STRATEGIC MANAGEMENT

5. Client Audit using SWOT Analysis

The SWOT analysis below has helped this particular client to identify key issues that
required improvements.

SWOT ANALYSIS on a Consultancy Company

• Quick Customer response with • Low market presence or

no red tape, and no need for reputation.
higher management approval.
• Low staaff count with minimum
• Excellent customer care, as the capabilities.
current small amount of work
• Vulnerability to staff on MC or
means we have plenty of time
urgent leave
to devote to customers.
• Unreliable cash flow in the early
• Lead consultant has a strong
stages
reputation in the market.

• Ease of changing directions

• Low overheads, so we can

offer good value to customers.

• Our business sector is • Developments in technology

expanding, with many future may change this market beyond
opportunities for success. our ability to adapt.

• Local government wants to • A small change in the focus of a

encourage local businesses. large competitor might wipe out
any market position we achieve.
• Our competitors may be slow to
adopt new technologies

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TEST : STRATEGIC MANAGEMENT

As a result of the team's analysis, it's clear that the consultancy's main strengths lie in its agility,
technical expertise, and low overheads. These allow it to offer excellent customer service to a
relatively small client base.

The company's weaknesses are also to do with its size. It will need to invest in training, to
improve the skills base of the small staff. It'll also need to focus on retention, so it doesn't lose
key team members.

There are opportunities in offering rapid-response, good-value services to local businesses

and to local government authorities. The company can likely be first to market with new
products and services, given that its competitors are slow in adopting.

The threats require the company to keep up-to-date with changes in technology. It also needs
to keep a close eye on its largest competitors, given its vulnerability to large-scale changes in
its market. To counteract this, the business needs to focus its marketing on selected industry
websites, to get the greatest possible market presence on a small advertising budget.

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TEST : STRATEGIC MANAGEMENT

6. Client Help using Porters’ Five Forces

Looking into the company’s external micro environment , these factors are all directly
connected to each other in some way. This must be done in order to successfully compete in
any industry. All firms are part of an industry—a group of firms all making similar products or
offering similar services, for example automobile manufacturers or airlines. Firms in an industry
may or may not compete directly against one another, as we’ll discuss shortly, but they all face
similar situations in terms of customer interests, supplier relations, and industry growth or
decline.

Porters Five Forces Diagram

6.1 Industry Rivalry

Industry rivalry is the first of Porter’s forces,It is in the centre of the diagram above. Note
that the arrows in the diagram show two-way relationships between rivalry and all of the
other forces. This is because each force can affect how hard firms in an industry must
compete against each other to gain customers, establish favorable supplier relationships,
and defend themselves against new firms entering the industry.

When using Porter’s model, an analyst will determine if each force has a strong or weak
impact on industry firms. In the case of rivalry, the question of strength focuses on how hard

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TEST : STRATEGIC MANAGEMENT

the companies must fight against industry rivals (competitors) to gain customers and market
share. Strong rivalry in an industry reduces the profit potential for all companies because
consumers have many companies from which to purchase products or services and can
make at least part of their purchasing decisions based on prices. An industry with weak
rivalry will have few companies, meaning that there are enough customers for everyone, or
will have companies that have each staked out a unique position in the industry, meaning
that customers will be more loyal to the company that best meets their particular needs.

6.2 The Threat of New Entrants

In an industry, there are incumbent (existing) firms that compete against each other as rivals.
If an industry has a growing market or is very profitable, however, it may attract new entrants.
These either are firms that start up in the industry as new companies or are firms from another
industry that expand their capabilities or target markets to compete in an industry that is new
to them.
Different industries may be easier or harder to enter depending on barriers to entry, factors
that prevent new firms from successfully competing in the industry. Common barriers to entry
include cost, brand loyalty, and industry growth. For example, the firms in the airline industry
rarely face threats from new entrants because it is very expensive to obtain the equipment,
airport landing rights, and expertise to start up a new airline.
Brand loyalty can also keep new firms from entering an industry, because customers who are
familiar with a strong brand name may be unwilling to try a new, unknown brand. Industry
growth can increase or decrease the chances a new entrant will succeed. In an industry with
low growth, new customers are scarce, and a firm can only gain market share by attracting
customers of other firms. Think of all the ads you see and hear from competing cell phone
providers. Cell phone companies are facing lower industry growth and must offer consumers
incentives to switch from another provider. On the other hand, high-growth industries have an
increasing number of customers, and new firms can successfully appeal to new customers by
offering them something existing firms do not offer. It is important to note that barriers to entry
are not always external, firms often lobby politicians for regulations that can be a barrier to
entry. These types of barriers will be covered in greater depth in more upper level courses.

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6.3 Threat of Substitutes

In the context of Porter’s model, a substitute is any other product or service that can satisfy the
same need for a customer as an industry’s offerings. Be careful not to confuse substitutes with
rivals. Rivals offer similar products or services and directly compete with one another.
Substitutes are completely different products or services that consumers would be willing to
use instead of the product they currently use. For example, the fast food industry offers quickly
prepared, convenient, low-cost meals. Customers can go to McDonald’s, Wendy’s, Burger
King, or Taco Bell—all of these firms compete against each other for business. However, their
customers are really just hungry people. What else could you do if you were hungry? You could
go to the grocery store and buy food to prepare at home. McDonald’s does not directly compete
against Kroger for customers, because they are in different industries, but McDonald’s does
face a threat from grocery stores because they both sell food. How does McDonald’s defend
itself from the threat of Kroger as a substitute? By making sure their food is already prepared
and convenient to purchase—your burger or salad is ready to eat and available without even
getting out of your car.

6.4 Supplier Power

Virtually all firms have suppliers who sell parts, materials, labor, or products. Supplier
power refers to the balance of power in the relationship between firms and their suppliers in
an industry. Suppliers can have the upper hand in a relationship if they offer specialized
products or control rare resources. For example, when Sony develops a new PlayStation
model, it often works with a single supplier to develop the most advanced processor chip it can
for their game console. That means its supplier will be able to command a fairly high price for
the processors, an indication that the supplier has power. On the other hand, a firm that needs
commodity resources such as oil, wheat, or aluminum in its operations will have many suppliers
to choose from and can easily switch suppliers if price or quality is better from a new partner.
Commodity suppliers usually have low power.

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TEST : STRATEGIC MANAGEMENT

6.5 Buyer Power

The last of Porter’s forces is buyer power, which refers to the balance of power in the
relationship between a firm and its customers. If a firm provides a unique good or service, it
will have the power to charge its customers premium prices, because those customers have
no choice but to buy from the firm if they need that product. In contrast, when customers have
many potential sources for a product, firms will need to attract customers by offering better
prices or better value for the money if they want to sell their products. One protection firms
have against buyer power is switching costs, the penalty consumers face when they choose
to use a particular product made by a different company. Switching costs can be financial (the
extra price paid to choose a different product) or practical (the time or hassle required to switch
to a different product). For example, think about your smartphone. If you have an iPhone now,
what would be the penalty for you to switch to a non-Apple smartphone? Would it just be the
cost of the new phone? Smartphones are not inexpensive, but even when cell phone service
providers offer free phones to new customers, many people still don’t switch. The loss of
compatibility with other Apple products, the need to transfer apps and phone settings to
another system, and the loss of favorite iPhone features, such as iMessage, are enough to
keep many people loyal to their iPhones.

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