Strategic Management analysis - Essay Example

?Strategic Management analysis Mission, Vision and Stakeholders 1. Mission Better Place Company is outstanding in trying to overcome the high reliance on the use of oil fuel in the automotive industry. In this industry, one thing that is apparent is that the type of fuel used has been evolving. However, since the use of petroleum products began, the adoption of other forms of fuel process has been slow. With the coming of companies like Better Place, the use of electricity to replace oil has been taking root. This company is motivated by the fact that the rise use of Electric Vehicle is slow, despite the fact that these vehicles are environmental friendly. The company has its own mission and vision that refine its focus in the automotive industry. The company’s mission is to first reduce and later eventually eliminate the use and dependence of oil in automobile industry. This mission defines the company’s focus and what it does differently to create value. This is a global company captivated to creating the world a better place. It works with stakeholders in automobile industry to enhance the spread of EVs. 1.2. Vision The company’s vision is to integrate car companies with the other companies like the battery and utilities companies, and consumers in a way that will enhance an increase in the use of EVs. This vision shows the belief of the company that the only way consumers can adopt EVs in a massive way is by overcoming the main challenge behind the use of EVs, which is its mobility. This belief differentiates the company from other value creators who believed that the massive adoption of EVs will be possible only when the battery capacity is increased. This increase will help cars travel over a hundred miles that are currently possible. Therefore, the company believes that it can achieve the generating of EVs by re-engineering cars and not batteries. This is possible by working on the available technologies and involving the relevant profiles in the automobile industries (Rothaermel 2013). 1.3. Stakeholders The table below maps the stakeholders in Better Place Company Stakeholder Claims and Interests Class Investors Transport project that would have higher returns, receive positive image, and innovative. Key player Government Developing a sustainable transport system Key player Auto Manufacturers developing a sustainable transport system Key player Regulatory Bodies Receive information and regulate organization behavior Keep Satisfied Technical specialists Specify the required technologies to meet the company’s requirements Key player Customers Make successful transitions Key player Program manager Budgeting Keep Informed The government and auto manufacturers are in support of a sustainable transport system. Their failure to acknowledge EVs in some instances is a threat. Customers desire to be relieved from the high cost of oil opt for EVs. The company is interested in reducing pollution and consumption of oil. The project is vital in reducing the increasing economic costs that come with high dependency of oil in different industries including transport. To effectively address the concerns of stakeholders, the company needs to integrate the working of different stakeholders to share ideas (Abernathy, J and Utterback 1975). In addition, customers need to be educated on the significance of EVs. Finally, the company will work to show admirable results in short period to attract more investors. 2. Industry Analysis and Scenarios 2.1. Industry Analysis Better place has can establish its strategy beyond the suppliers bargaining power. The company has numerous suppliers located in different countries who can give vehicle products and other services. In addition, the customers are located in different countries like Australia and United States of America. The main substitute for EVs is the oil. This product has received numerous criticisms regarding its emission on the environment. In a nutshell, suppliers are forced to embrace new initiatives that are environmental friendly (Thompson et al. 2013). Customers bargaining power is also another vital force for Better Places. Considering that EVs are environmental friendly than oil vehicles, customers are likely to buy these product ibhiger volumes in the future. Better Places does not operate on high fixed costs. However, there is a chance that customers may integrate backwards toward the use of oil. Better Place Company enjoys the market that threatens other firms. The company is protected by intellectual rights all over the world. The company integrates with other players auto manufactures who also dominate larger markets. These manufactures have good relationships with customers. In addition, the government is in support of initiatives in the transport system that supports sustainability. However, this action encourages other firms to come with other strategies. EVs demand substitute arises from the use of fuel. However, EVs overcome this threat because the government supports the use of electricity that fuels like oil and gas. It is predicted that the demand for electricity may rise in 2035 because the demand for cars is also increasing in developing countries. In this case, there are chances that people may respond by using oil and gas again and thus causing a threat to EVs (Porter 2008). Better places are exposed to competitive rivalry. Existing auto manufacturers are major rivals to Better Place Company. They have been working hard to embrace EVs. This competition is strengthened by the fact that the auto manufacturers are spread and have loyal customers who may opt for their EVs products than those of Better Place. 2.2. Scenario Analysis For Better Place Company, it is the expected increase in prices of electricity that threatens the survival of the company. Currently, the company is enjoying power prices of electricity when compared with other fuels like oil and gas. However, studies indicate that in 2035, the prices of electricity will be high. This increase is as a result of the increase in the demand of vehicles in the developing countries. The high number of vehicles will also increase the demand for electricity. This scenario will lead to a shift in the focus on the use of electricity. To avoid inflation, the political environment will be forced to balance the use of these two fuels. In a addition, auto manufactures would have highly specialized in the production of EVs. Therefore, to reduce competition, these companies will also be forced to work on other products that will help cut on the dependence on electricity. 3. Resources and Capabilities 3.1. Resources Better Place has a number of resources that enhance its productivity. The company has tangible, intangible and human resources. Tangible resources of the company include the charge sports and battery switching stations. The former is used in provide areas where vehicle batteries are charged when the car is packed. The later (switch station) provides place for rapid battery change or replacement. Borrowing capacity is also high. The initiative is highly supported the government and thus increasing the borrowing ability. At the beginning the company internal funds generation was encouraging. The fixed assets for the company also have alternative uses. For instance, the batteries can be used for other home purposes. The company also has intangible resources. This includes on-board software. This resource is significant in the supervision of the state of a car battery. The company’s is also spread in other countries and thus making it bigger in size. It is located in different countries like Israel and Australia. It also has a driver services. It provides an outstanding driving experience. The company also has a good reputation because it is still new in this market. It has strong relationships with other manufacturers. This relationship is essential in winning more customers, creation of capital, and overcoming the cost of operation. In addition, the world is currently embracing the green culture. This culture is in support of a sustainable environment (Grant 2013). This culture demands that different sectors should aim at adopting strategies that do not emit pollutants. Best Place Company also enjoys human resources. The company’s manager has been a key player in the design of the company mission and vision. Finally, employees’ qualification is another resource. The employees are highly qualified and thus significant in enhancing innovation and creativity. 3.2. Capabilities Better Place has different capabilities. The first is in its corporate functions. As the company is focused toward adoption of EVs, it is also motivated by the need to control costs. This implies that it has a good financial control plan. Its EVs innovation is strategic. The focus is on reengineering the vehicles and not the batteries alone. The company is also coordinated with other auto manufacturers and thus increasing its capability in expanding. Better Place is also managed internationally. It exists in Australia and Israel. The company’s information management is also a capability. It has an integrated network that encourages information sharing (Johnson, Whittington and Scholes 2008). The company is also responding to the need of creating the world a better place. This is by developing a green product. The production of EVs is also continuous. Furthermore, the designed product is vital replacing the long term dependence on oil. It also is cheaper than other alternatives like hydrogen. The company has a marketing capability. The company is responding to green product market trends. Another capability is seen in the management of brand. Finally, the company has vital sales promotion strategies. The media has been influential in the support of Green products. 4. Business and Corporation Strategies In the process of formulating a strategy, Better Place Company has emphasized on the adoption of strategic drift. Initially, in the manufacture of EVs, companies were focused on the improvement of the lifetime of the car battery (Freyssenet 2009). The initial EVs model was limited on mobility. However, Better Place Company founders believed that it was through the reengineering of vehicles and batteries that would make it easier to increase the massive adoption of EVs. This method was easier by integrating the process by other auto manufactures. This is a good idea because the process of adopting EVs began long time ago. It is being practiced by bigger companies and thus it indicates an advantage in the coming stages (Johnson, Whittington and Scholes 2011). Integrating with auto manufactures increases the chance of the company winning numerous customers. These loyal customers will purchase Better Place products because of the trust they have on the initial manufacturers. It also makes it easier for the company to spend less on sales promotion and expanding to new areas. The drift strategy is also favored by the demand for EVs. Currently, there is an increased awareness on the need to have green products. The market is also aware that personal transport is at stake. People are working toward adopting initiatives that promote a suitable transport system (Barney 1995). The strategy of drift has also been influential in determining supply for Better Place. The change of strategy has created the need for improvement. The company has worked toward the development of more charging stations and rapid battery change. These solutions have been significant in overcoming the initial challenge on the massive adoption of EVs. The strategy is also compatible with the existing trials in the development of EVs. Better Place Company is committed in working with auto manufactures who have also embraced the development of EVs. However, these manufacturers were focused on the improvement of batteries alone. Finally, the management is working toward having good relationships with other auto manufactures. Its strategy also attracts the government and other investors. In addition, the company is determined to work with other battery manufactures. Relationship strategy is better achieved when the company works with others (Grant and Jordan 2012). The use adoption of electricity in vehicles is made encouraged by the use of solar systems. This system provides lighting, which is essential in areas where hydropower is not available. It offers a solution for developing countries, which are still encountering difficulties in the supply of power. Reference List Abernathy, J., and Utterback, W. 1975. A dynamic model of process and product innovation. Omega, 3(6), pp. 142–160. Barney, J. B. 1995. Looking inside for competitive advantage. Academy of Management Executive, 9(4), pp. 49-65. Freyssenet, M., 2009. The Second Automobile Revolution: Trajectories of the World Carmakers in the 21st Century. Palgrave Macmillan. Grant, R. M., and Jordan, J. 2012. Foundations of strategy. Chichester: John Wiley and Sons. Grant, R.M., 2013. Contemporary strategy analysis: Text and cases. 8th ed. Chichester: John Wiley and Sons. Johnson, G., Scholes, K. and Whittington, R. 2008. Exploring corporate strategy: Text and cases. 8th ed. London: Pearson Education. Johnson, G., Whittington, R., and Scholes, K., 2011. 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