Organizations Strategic Objectives - Essay Example

STRATEGIC MANAGEMENT April 20, Introduction Organization is key to achieving in business. It helps set goals for the business, be able to access who the buyers of the goods and services are in the market, the value of the company’s produce in the market, align goals of the company in association with achieving the company’s goals, secure the interest of the shareholders, create more value for their share of securities in the market, know how the company can generate more value for itself, the geographical scope within which the company should focus in order to grow among others. This is so seen and put into adherence through proper and strategically managing of both resources available to the company, that which that the company already possess and taking advantage of it marketing strategy to achieve its goals and those of its shareholders. This paper focuses on strategic management of an organization, its aim and concepts, principles, key factors affecting it such as external, internal and industrial environments. It also describes strategic formulation. Strategic management is the art of making decisions for an organization or company, taking into consideration the competitive market in which the organization finds itself and other factors affecting it in regards to achieving the organizations goals and objectives with the best interest in creating a profitable environment for both the company and its shareholders (Dess, 2005). Strategic management is all about analyses, making choices and seeing that those choices are implemented. Strategies are meant to give the organization or company a focus, direction in which to channel its efforts as per the environment it finds itself in and define major characteristics of the company’s goals. After this analysis, the management group needs to make appropriate decisions, on how to find their place in the market by making great and applicable marketing strategies as to help them gain and a substantial amount of clients, while attracting more for their goods and services in this market regardless of the external competition they face making sure that their ideas of marketing or goods production are not able to be copied by other competitive partners in the market. This means that the company ought to try do everything differently from their competitors in terms of decision making especially due to the constant market competition that they face as this will help them sustain themselves in the market for long as their ideas cannot be copied (Irene M. Duhaime, 2012). After a choice of decisions has been made, the management of the company need to see to it that this decisions are applied effectively as so achieve their goals that have been set and their critical decisions that were made by knowing how to channel the proper sections of the organization to work together in performing effectively to achieve (Garlichs, 2011). As for the management of the company to be able to achieve its goals they tend to always set strategic objectives which come in regard to the vision of the company. Strategic objectives are the aims of the strategic management in any organization. They ought to be in place as to help achieve or measure the length to which the vision of the company is being kept. These objectives are often there to help increase the productivity of the firm and its profits while maintaining its client base and attracting more of the consumers. These objectives ought to be (Monahan, 2008) realistic meaning that they can be achievable regardless of the factors affecting the production or marketing of the goods and services. Time is of essence both to companies and shareholders as well as consumers. This means that this objectives have to be achieved within a specific period of time so as to meet things like market demand of the goods, the fiscal expectation set by shareholders among others, meaning that they are too measurable and specific while being appropriate in terms of the company’s vision. This helps to push employees in achieving their goals within the company by helping them work collectively through the different production channels in appropriate time producing considerable good output for the firm, this upon completion and seeing they can achieve the goals set by management helps motivate the employees (Boswell, 2000) as they can see that they are able to meet targets set by management and in return they gain incentives from the company too. This could help the different production departments to meet their own set goals other than those set by management. This too leads not only to greater equity in terms of the company’s assets but also helps in measuring the growth of the resources produced by the company hence attracting more shareholders as the prices in index rise on their stocks in market and their produce continue to genuinely be accepted by the community. As production increases the company finds the need to reduce prices in the market for their goods and services hence creating a greater profit margin for the firm. This also leads into more jobs creation as the company grows in it production since it has to meet production demands in the various sectors within production. The company has more chances of investing in other sectors as their profit margin allows for diversification (R.Yarger, n.d.). These strategic objectives and aims are best achieved when concepts are put into place. The concepts of strategic management are done on the basis of cost, consumer and competition analysis (C Appa Rao, 2009). This is usually for the gain of profit for both company and shareholders. There are several concepts involved SWOT (Strength, Weakness, Opportunities and Threats) analysis. It is composed of both internal and external environments affecting the business. Strength and weaknesses are the internal factors while opportunities and threats are the external factors. This concept helps you identify the company’s strength and it weaknesses while identifying the major opportunities that the company can explore in and major threats facing the company. The major strengths of the company could range from the unique selling position of the company in the market, what the company does better than other companies in the competitive market, the uniqueness of the resources that the company has that other companies are at a disadvantage upon, the advantages that the company has for example taxing system that other competitive companies don not have while the weaknesses of the company could range from what things or factors of output that affect your production internally for example poor technology that generally affects the sales of the company or what the view of the people is in the external market concerning your company, what the company should at all costs try to avoid and by detecting the weaknesses of the company it is easy to use the strengths of the company to eliminate this weaknesses so as to increase productivity of the company. Opportunities are what the company or management could view as it’s points of opportunity in the market such as upcoming markets or its advertising strategies that lead to its growth or what resources it can view in the market that aren’t being used by any competitive company within the same industry, looking at the market trends of the produce and being able to identify what the company can easily take over as an opportunity. Opportunities could come from changes in people’s way of life, government policies on the produced goods, large advertising on goods and services, changes in technology of production for example producing more natural juice rather than adding additives in a juice producing firm among others. It is possible to know of opportunities coming up or that are available for the company by looking at what the company has for strengths and knowing how to create those opportunities or rather looking at the weaknesses of the company and knowing how to use your strengths to overcome this weaknesses and trying to use them as a chance to look at what opportunities are being offered to overcome this weaknesses. Threats could include having serious cash flow problems in the production sector of the company or being unable to pay debts that on the capital loaned from banking or financing institutions, probably facing challenges in changing the company’s technology as to be able to produce more quality goods and services as probably demanded by the stand quality assurance office, things that competitors are doing that your company is not able to do due to other challenges it is facing among others. When trying to overcome threats facing the company it is always advisable to try ignore or overlook things such as government policies or quality assurance expectations or changes in technology as this could take a long time to fix (Fine, 2009). The costs of production per every item produced in a company could decline cumulatively due to a couple of factors such as the labor in production increases or the technological touch up on the production of the item among other resources. This the experimental curve concept that dictates that despite the high cost in production, competition from the competitors or changes in technology the production costs per item should not increase over time but decrease as production gets more efficient and gets more units per item (David A. Aaker, 2009). The growth share matrix (SAHAF, 2008) indicates the share in the market that a company takes compared to its competitive companies and their share in the size of attraction that it takes in the face of their consumers. This helps the company know their share in price of their securities or invested equity in the market helping them make decisions as to whether to invest more and diversify their investments in the market for a profit gain. This is the corporate strategy and portfolio theory (H. Kent Baker, 2013). The return on investments for companies is usually a good measure to which a company can know how its assets in the market are performing and through the same it is able to be able to compare itself with other companies. Through this same return on investments figure shareholders are able to a certain the value of their investment in the company and its worth and whether as to why their portfolio managers are making good decisions on their behalf and that of the company too. This leads to automatically increasing their shares in the company hence helping in the increase in share value of the company. Should the company not be performing effectively, realigning the company by increasing tasks of the of the labor through properly aligning the right skills in the right field could eventually see an increase in the market share of the company as production increases’. Competitive advantage of a company is a great asset to it. This means that the company though producing similar goods and services as other companies they are doing something totally different from their competitors that is helping them maintain a great base of clients without necessarily having to do much advertising or such. ‘Their products speak for themselves in the market.’ Competitive advantage could either be driven from factors such as superior production skills that the company owns through well managed and trained labor skills, well developed technology that is not available in other competitive companies, price differentiation in relation to other competitive companies or the geographical coverage that the company covers in terms of client base compared to other companies. In this competitive advantage theory (Singh, 2008) the company has a great advantage over its other companies and the strategic management team has pursued and maintained it. It is so far the most adequate method of strategic plan that never fails. Firms like IKEA (Barry J. Witcher, 2010, p. 155), a home furnishing Retailer Company, have managed over the years to maintain their competitive market advantage despite rising completion in the furniture industry over the year. There are several factors that affect the competition advantage of a company in the market. These include the willingness of the buyers to purchase the produced goods and services, the suppliers willingness to avail available resources that are needed for the production of goods and services, the new companies entering the market with new strategies that could seem a threat to the company itself and the emergence of companies that produce substitutes to the various goods and services that are being produced by the company and offering them at a lower cost than the products in question (Hasan, 2013). These five factors affect industries a lot and they are needed to be able to achieve a great and balanced competitive advantage for a firm while causing a lot of friction in the industries producing similar goods or substitute goods to each other. While a company has got to conquer this factors affecting its basic model of structure industrial problems are also to be a suit to consider so much while making strategies. This is known as the industry structure and profitability (Kenneth Desmond George, 1992) since all profits made could be essentially affected by this. To produce effectively a company has got to have all its chains of production well aligned so as one chain does not affect the production of another. This means that the production department does not affect the branding department which doesn’t affect the logistics, sales and all the others. Aligning this various departments correctly and giving them considerable time to achieve their goals, enables the firm be able to produce effectively and lay out their products for sale to the market efficiently by meeting clients’ needs on time. An example would be a bread baking firm that requires to deliver fresh bread in the market every morning. This means that the resources need for production should be delivered on time so as to allow bread to be baked on time and then delivered to the packaging department with the packaging packets already prepared and branded effectively then delivered to the sales department that ensures that the bread is counted for and the proper sale price is given then to the logistics department that ensures the bread reaches the market on time to ensure that the clients have their fresh bread every morning. This arrangement of the chains of production in order to efficiently get the produce ready on time is the value chain concept (Umit S. Bititci, 1998). Every chain of production in company can be their threat to development and getting proper financial gains for the company. The company can either choose to keep the poor performing section in the chain of production by partly selling it out to another company through outsourcing or generally erase it off and get the services from another company that is doing well in that area of production. Paying attention to what a firm can do best is the best opportunity they can take into increasing their profit. This is known as the core competence of the company (Drejer, 2002). Strategy can be viewed as a way of adapting to change within a firm’s organization. A good and great strategy need not be fixed but adoptable to changes whenever there is a reviewing of the strategies of the company. While making strategies for the company, a good strategic developer needs to be able to focus on the mission of the company, its focuses but be able to put it at an advantage profitably for its gain and that of the shareholders. Like explained by porter a company needs to be able to contently have its own advantage when it comes to market completion and have advantage on the same. This can be effectively seen through companies like McDonalds (Enz, 2009) the retailer fast food chain with even emerging competition like burger king, KFC and the like they have still maintained a sustainable market and are busy expanding into many other geographical markets and being able to retain their clients. They have diversified their asset allocation (Charles Lamb, 2011) and invested in not only selling meals but also including things as selling toys in their meals example the happy menu for kids that comes with toys accompanying it, gyms among others. This diversification helps in increasing their profit margin, increasing its shares in the stock market, while attracting more investors. The value of strategic management is best experienced in firms that have those kinds of managers that meet, discuss and make important decisions on the progress of the firm hence increase their profitability. Bibliography Barry J. Witcher, V. S. C., 2010. Strategic Management: Principles and Practice. s.l.:Cengage Learning EMEA. Boswell, W. R., 2000. Aligning Employees with the Organizations Startegic Objectives: out of "line of sight," out of mind. s.l.:Cornwell University. C Appa Rao, B. P. R. K. S., 2009. Strategic Management and Business Policy. s.l.:Excel Books India. Charles Lamb, J. H. C. M., 2011. Essentials of Marketing. s.l.:Cengage Learning. David A. Aaker, D. M., 2009. Strategic Market Management:Global Perspectives. s.l.:John Wiley & Sons. Dess, G. G. L. a. M. L. T., 2005. Startegic Management. 2 ed. New York: McGraw-Hill Irwin. 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