The Concept of Corporate Strategy and Strategic Management Planning - Essay Example

? Strategic Management Plan Strategic management plan This is a field under the strategic management, and deals with key emergent and intended initiatives taken by the top management on behalf of the owners. These activities involve utilization of resources to enhance the firm’s performance in their external business environment. It encompasses specifying the organization’s vision, mission, objectives, developing policies and plans, programs, and projects. There is also the designing of a balanced scorecard, which evaluates and analyzes overall performance of the business enterprise towards its objectives. In reference to the reports and records from leading economist, they advocate that, any strategic plan should begin with the initiatives from the stakeholders (Mintzberg, 2007, p.37). In precision, strategic management is an activity under a high level of managerial practices whose basis is goals over tactics. This means that the management team must formulate goals which will out do its competitors’ strategies. By so doing, the organization will have the capability of maintaining a sustainable share in the competitive business environment. This is an article discussing the strategic management plan of PPQ Parts. It s location is in United States and it is leading in meeting its customers demand. The company has not set strong root in reference to its international business structure. The article analyzes the firm’s strategic plans for the next 4 years so as to meet the gaps in its structure. Among the company’s, four years strategic plans are:- 1. Increasing the number employees by from 5,000 to 10,000 (the 5,000 employees work in the branches within USA). 2. Increasing of equipment for international expansion will rise by 80% 3. Increasing the company’s world market share from 5% to 9% 4. Increasing the stock price from $10 to $22 5. Increasing annual profit share from 6% to 13% (the firm’s annually average profits is6%) 6. Reducing the rate of employees turnover from 28% to 17% (this will be an advantage over its competitors are the average rate of employees turnover among its rivals is 25%) 7. Increasing its reach in helping the community, this will be by increasing charity funds from 0.5% to 5% (this is one its corporate value) Other short term goals of the company are reduction in expenditures, high level of security, creativity and innovation, among others. This will act as the subsidiaries of the long term goals (Mintzberg, 2007, p.37). Environmental scanning of current conditions This is an explanation of the ongoing activities in the economy world. It encompasses different items, which in one way or the other may deter the achievement of the goals. These situations may also favor the achievement of the goal. It is the duty of management together with the other stakeholder to ensure that all stabling blocks do not affect the objectives. This will only be met by coordination and communication between different parties in the organization. In reference to the environment, there are many factors affect the process of meeting long term plans. This is because the plans work on the basis assumptions, by putting some of the parameters as constants yet they are not definite. These variables include changes in the economy, prevailing competition, and political stability (Chandler, 2010, p. 45). Economy PPQ is a company in the United; the national has a stable economy, thus favoring the stability of the economy. This is as a result of the government’s measures in protecting the business environment of the country. For the strategic plan to realist, the management of the company should consider the possibilities of changes the value of money. This is because, within the four years, there may be differences like those experienced in the year 2008 (global recessions resulting from changes in the price of oil). The company should be ready to offer terms that increase the rate of stock turnover. Other strategies, which are applicable to these instances, are innovation and creativeness. By so doing, the company will have the capability to give an extra satisfaction to the customers. This will increase revenue, therefore, the profit margin (Porter, 1999, p. 44). PPQ management should use healthy economic strategies such as low price so as to raise the number of potential customers. This is because unhealthy practices such as increasing the price, with an aim of increasing returns may put off potential customers (Porter, 1999, p. 44). Competition One of the significant challenges facing the companies in the USA is competition. This is because the nation has a large economy, thus highly industrialized. With this in mind, the management of PPQ has to design a strategy that will make customers the firms’ products other than those of its competitors. This is in reference to the availability of various substitutes from competitors. The company should also implement a plan where it will disadvantage its competitors; an ideal example is enrolling graduates and undergraduates. This is because they will reduce the cost of labor. Other considerable strategies are availing variety of products, working of on the customer services, improving the quality of products, and offering favorable terms of payments (Bryson, 2006, p. 65). Political stability Political stability is not a significant issue in reference to the location of the company. USA is a nation with a stable government; peace has been prevailing all through the past decades. This is one of the advantages resulting from the location of the company. In reference to the strategic plans, the company should also venture in nations enjoying the same virtual. This will reduce the risk of venturing in nations with unstable governments. Resource analysis PPQ Parts locations will also help in meeting the planned objectives in relation to ready human resource. There is available labor as the nation has one of the admirable educational sectors in the world. The company also has access to finances. There are different financial and non-financial organizations in the nation, and this will facilitate the company’s financial strengths. The government also has a wing that helps investors expand their reach after presenting a material business plan. This aid is in the form of loans, but with highly favorable terms in terms of interest and grace period. New ventures around the world will be in areas with enough human resource; this is with the aim of reducing chances of hiring human resources from other countries as it would end up being an extra expenditure. The chosen areas of expansion will be in Europe and Australia. Africa will have several limitations and hardships, but the market will expand as a result of the developments and advancements in the region (Andrews, 2009, p. 34). Conclusion With the implementation of this plan, PPQ Parts will have the capability to meet its long term objectives. This is because it is a combination and integration of various components that affect performance of new ventures. From this plan, we can learn deal with global operations, which include different key aspects. These aspects are essentials in determining whether long term goals are achievable in a highly competitive environment. The plan will also ensure that PPQ Part maintains a sustainable share in the business environment. References Andrews, K. (2009). The Concept of Corporate Strategy, 2nd Edition. Dow-Jones Irwin. Bryson, J. M. (2006). Strategic Planning for Public and Nonprofit Organizations. Jossey-Bass. Chandler, A. (2010). Strategy and Structure: Chapters in the History of the American Industrial Enterprise. MIT. Mintzberg, H. (2007). The Rise and Fall of Strategic Planning. Basic Books. Porter, M. (1999). Competitive Strategy. Harvard Business School Press. Read More