Scenario: Maria is considering operating a local business in the beauty and cosmetology sector in the island of Trinidad. She has completed research into the operations of similar businesses locally and intends to market and sell her products initially at the local level, with the possibility of extending at the regional level in the near future. Maria understands that to shape the business's overall strategy there are various strategic drivers both internally and externally which must be considered and wants expert advice on these drivers relevant to her business. She is also struggling with deciding on the best structure for the organization, as well as the most effective ways of marketing her products to ensure that they are more attractive to buyers than the current options. She is considering a strategic alliance but is not sure if to form links among non-competitive firms or associate with firms in an unrelated activity. Maria is aware of internal and external tools which businesses use to understand the operating environment but is unsure which ones are feasible for her business or will provide the most relevant information. Whilst Maria has a lot of ideas, she recognizes the need for help to ensure her success. As a Strategic Consultant, you are required to provide some guidance to Maria by responding to the following questions:
Using the scenario attached below: Answer:
2. Identify and discuss one (1) internal and one (1) external driver, (as provided below) which Maria should consider as part of her strategic planning exercise relative to the case presented.
Internal Drivers with definition
1. Profits & Revenue
• Key factors in strategic change which are necessary to maintain a
sustainable level organisational growth.
• Profits and revenue serve as an indicator of successful strategic
management.
2. Mission
• An organisation should be driven by the overall mission which addresses
the question “What is our business?”
• Changes in the mission will result in changes in organisational focus.
3. Vision
• A vision statement serves as the roadmap by answering the question
“What do we want to become?”
4. Political Environment
• An internal political environment can serve as a major strategic driver
because it directly impacts strategy, strategic planning, decision-making
and those in charge of ensuring strategic management.
5. Corporate Culture
• The corporate culture sets the tone for alignment of strategy, mission,
vision and strategic goals.
• Example: if there is a culture of innovation, employees may strive to find
new and creative ways to improve organisational processes, output,
goods, services etc.
6. Ethics & Corporate Social Responsibility
• Organisation have a responsibility that impacts consumer perceptions.
• while this is internal, often CSR is shaped by many current, local,
regional and international current events.
• An organisations’ response to such events speak to its CSR (e.g.
Samsung stopped production of one of its cellular phones because they
were recently malfunctioning and hurting customers.)
External Drivers with definition
- Innovation/Change
- Necessary for organisations to adapt to the environmental forces that
impact strategic planning
• Failure to innovate can severely affect profits, revenue and other key
aspects of an organisation
• Example: Blackberry late adaptation to changing nature of their markets
and competitors.
2. Market Shifts & Creation
- Prices within markets can vary and shift.
• New markets may be created and organisations may consider entering
them.
• Production costs may increase/decrease
3. Taxes & Regulations
- Local and global tax regulations direct the output of a organisation within
a particular market.
• Government regulatory forces may implement new industry practices
and policies that must be adhered to.
4. Customer Needs
- A customer wants, demands and needs can drive organisational trends,
costs, and supply.
5. Technological Advancements
When new technology is introduced in a market by competitors, or
the industry, strategies must be adjusted to capitalise or maintain a
competitive stance within the market.
6. Globalisation
As markets become “glocal,” that is global is the new local, strategic
management is crucial to ensure that market penetration and
organisational niches are established for long-term sustainability.
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