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Strategic management - Essay Example

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Strategic management

The development of the company and the factors which led to the appointment of the new CEO
The company was founded in the 18th century and was made a family enterprise for the production of alcoholic drinks. What is seen through the history of the development of the enterprise, is that it was developing without any strict strategy or plan. As it is used at present, large and small companies have made a tradition to develop 3- and 5-year strategic plans to set the main objectives, with slightly shifting them according to the current situation. The resources of each enterprise should closely viewed and correspond to its objectives and goals. Drambuie was created as an accidental idea but it was also made a successful enterprise; though to keep this success there had to be developed a whole set of measures to keep the company from the fall and decline in sales. There has been a whole set of events, which made it obvious that Drambuie needs ‘fresh breath’ and absolutely new turn in its development. The main factors, which have led to the appointment of the new CEO and the creation of the new strategy were as follows:
1.The main strategy of the company was to keep secret the principal ingredient of the Drambuie production and keep to the line with the Scottish heritage. The management of the enterprise was always performed by the family members. Theoretical marketing and strategic management state, that management of the company should be highly qualified and have enough expertise in the field of management and strategic development. The lack of skill in managing the company, especially in the case with the Malcolm and Duncan MacKinnon, who have become the heads of management after the middle of 1970s, facing the inexorable decline in sales as well as lack of strategy. It is no doubt, that their activity in expanding the general portfolio of the expensive brands was a good step, but in the view of the general sales decline it was necessary to pay more attention to the brands and marks, which are more popular and were affordable by the average consumer. Traditionally the company was trying to target average and higher population, offering brands which were both affordable and high-quality. Through the decline of sales it would have been more profitable to develop the strategy of attracting the average consumer back to the brands through refreshing the product, making it new. One of the key principles of the strategic management is making the product in the line with the requirements of time and consumers. This principle has been forgotten by the previous management of Drambuie and it was the factor which made the company understand the necessity of hiring new experienced CEO.
2. Another unreasonable step of the MacKinnon management was absolute absence of budgeting in the company, the evidence of which was the purchase of the expensive office premises during the period of the sales decline. Budgeting is a part of any strategic planning and management, and planning without budgeting are the two areas which cannot exist separately. It is essential that the development of any company goes according to the cycles, thus periods of increase in sales is usually followed by certain declines, but through these short cycles the general line of ...Show more

Summary

The analysis of the present work is based on the description of the development and modern strategy of the Drambuie enterprise, and the aim of this work is to critically assess the ways which led to the appointment of the new CEO from the outside company…
Author : demariowitting
Strategic management essay example
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