Strategic Management

Use relevant strategic management tools and techniques to evaluate the current strategy of the organisation based on their strengths, weaknesses, opportunities and threats. Analyse why this strategy might be suitable, acceptable and feasible. Briefly identify and justify another potential strategic direction for the organisation. Given the nature of this analysis there must be a contemporary and inventive flavour to much relevant data.
A few strengths, weaknesses, opportunities and threats:
Strengths
• Well known for their services
• Trained staff and better qualified mechanics
• More vehicles able to service customers who have broken down
• they can reach their customers in a short amount of time
Weaknesses
• Competitors
• High employee turnover
Opportunities:
• With customers being price sensitive during the current economic climate, to offer new introductory deals for the vehicle breakdown cover to attract new customers
• to partner with a major brand such as RAC work with Tesco
Threats
• consumers have the opportunity to substitute the products which The AA provides easily and with minimal cost by choosing to use public transport
• consumers can easily switch to a rival competitor in the industry if the products and services are being offered at a lower price

 
Strategic management tools and techniques:
Make use of – Strategic Business Unit (SBU)
Strategy clock
• Differentiation
• Low price
• Hybrid
• Non competitive
Strategy lock- in
• Size or market dominance
• First mover dominance
• Self reinforcing commitment
• Insistence on preservation of positive
Portfolio matrices
• Growth/Share (BCG) Matrix- Include this in here- Briefly identify and justify another potential strategic direction for the organisation.
• Directional Policy (GE-McKinsey) Matrix
Corporate rationales
• The portfolio manager operates as an active investor in a way that shareholders in the stock market are either too dispersed or too inexpert to be able to do.
• The synergy manager is a corporate parent seeking to enhance value for business units by managing synergies across business units.
• The parental developer seeks to employ its own central capabilities to add value to its businesses.
Value-adding
Value-destroying
Growth strategy
Growth by internal expansion
• product differentiation
• vertical integration
• diversification
Growth by external expansion: mergers and takeovers
• horizontal mergers
• vertical mergers
• conglomerate mergers

Developing strategy
(USE IN REPORT TO EVALUATE)
Developing strategies
On what basis? In which direction? how?
Basis of choice
Corporate purpose and aspirations
SBU generic competitive strategies Alternative directions
Protect and build

Market penetration

Product development

Market development

Diversification:
Related
unrelated Alternative methods
Internal development

Acquisition

Joint development alliances
In which strategic direction
Existing AA new
Protect/ build
• Withdrawal
• Consolidation
• Market penetration Product development
• On existing competences
• With new competences
Market development
• New segments
• New territories
• New users Diversification
• On existing competences
• With new competences

Talk about- Development strategy: how?
What are the problems and risks:
• Valuation
• Objectives unclear
• Corporate cultures too distant.
• Synergy’s fail to emerge
• Ensuring ownership of assets
• Validating ownership of patents etc.
• Contracts of employment for key staff
Finanicng growth and investment
Strategic alliances
• Building trust
• Learining from the partner
Innovation
• New product development process (market information, NPD process, intergration of process contribution)
• Product life cycle
• Responses to changes in technology
• Vision
• Developing foresight
• develop stretch goals
• empower employees to create and get things wrong
• develop systems for rewards and recognition for innovation
International strategy

Internationalisation drivers

Porters diamond

• rivalry
• market characteristics
• exporting
• strategic alliances
Include:
Suitability
• Does the strategy address the circumstances in which the organisation is operating?
• Is the strategy viable?
• Does the strategy exploit core competences?
• Value chain analysis
• Positioning
• Porters 5 forces
• PESTLE

Acceptability
• What are the expected performance outcomes and are they consistent with stakeholder expectations?
• Stakeholder mapping- What will stakeholders’ reaction be?
• What level of risk is involved?
• What level of profitability?
• What is the cost/benefit?
• Can the strategy be easily understood?
• Is it acceptable to stakeholders?
Feasibility
• Has the organisation got the resources and capabilities to deliver the strategy?
• What gaps in resources and capabilities need addressing in order to ensure success?
You need to provide a rational, concise and coherent explanation of what your proposed strategic direction means for the AA in the assignment. Justify your findings.
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Strategic Management