BMP6002 STRATEGIC MANAGEMENT 1: A Critical Analysis of Strategic Management Processes and Tools

BMP6002 STRATEGIC MANAGEMENT 1

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Introduction:

This report is based on the strategic management and the analysis for businesses, this report will provide information and effective knowledge of strategic management, and different tools, techniques that are used by business organizations. When several companies or business organizations are work in the same business market and area then they have to assess their strategies to achieve their goals, objectives, profits, and productivity with effective growth. Strategic management can be referred to as the management of several resources within the organization to achieve all the objectives and goals. This type of management involves the analysis of competitors and their environment, setting objectives, analyzing the internal environment of an organization, strategic evaluation, also responsible for ensuring that the management rolls out all organizational strategies.

This report will provide the critical assessment of different processes used by organizations to identifying and determining their strategies. The evaluation of critical models & tools that organizations will use for determining their strategies will provide in this report. To create a better understanding the Lyst organization is selected that provides fashion clothing and footwear for people. Applications of different tools will discuss in this report from the perspective of the Lyst organization. Finally, this report will provide the importance of change management with transformation complexity, cost, risks, & sustainability.

The process used by organizations to determine their strategy:

In business organizations, it is very important to have better strategies so that they can achieve all the goals and objectives, and also gain more profits, increased performance, productivity. This determining and planning of organizational strategies is an important process and necessary when more than one business organization is work in the same marketplace.

The process used by Lyst organization and other organizations is included various steps that help them to develop, plan and determine the strategy for them. Determining and planning process of strategy can be the most effective tool for various business organizations with measurable objectives and goals, that can help them to make a better decision. This planning and determining process is beneficial to prevent the organization from low-performance tasks and business operations without setting the real purposes, priorities, aim. This process helps to st clear a vision for the future, this process will decision-makers to take beneficial and correct decisions for the organization and their employees. In the process of strategy determining and planning following are the main steps.

1. Develop or review mission & vision: In this process, decision-makers of lyst or other organizations can obtain fresh information from different stakeholders like their clients, customers, communities, suppliers, employees, & investors. Through this step, it can evaluate how their stakeholders think about lyst, and it also helps to identify the major goals and objectives, along with actions that aligned with them. Developing or review the mission and vision of the organization is very challenging along with changes in the business processes (Bryson, 2018).

2. SWOT analysis and others operation & business analysis: In the lyst and other retail business organizations the operation and business analysis is the key factor for strategy determining and planning, & it is helpful to understand the internal environment of an organization, along with its weaknesses, strengths, and external environment along with its opportunities and threats, and for lyst organization SWOT analysis is one of the best tools. In this step, all the stakeholders provide their viewpoints about the organization (Akbari, 2020).

3. Selecting and developing strategic option: This step is providing the template to develop and identify key strategies for the organization that will helpful for achieving objectives. It is also important that the strategy should develop as per the collected requirements in step one. Different types of strategies are possible, but a selection of one main strategy is important.

4. Establishing objectives strategy: In this step al the objectives are set, this step can allow managers in lyst organization to view the overall picture of their company, & can select a better strategy according to their objectives. Templates can help to understand different optional strategies and measure the timeline to ensure a better and effective strategy. In this step is it important that the timeline and measures are based on the SMART factors, and these factors are as follows.

• S - Specific.

• M - Measurable.

• A - Achievable.

• R- Realistic.

• T - Time-bound.

When the selected strategy satisfies the SMART factors then it will provide better communication in the hierarchy of lyst organization (Smallbusiness, 2021).

5. Execution plan of strategy: In this step, various organizations may fail to implement the strategy, and make them realize it with full potential, then it is important to prepare a proper plan of deployment.

6. Resource allocation: In this step management team of Lyst organization can be assigned with determining strategies for better, they can provide better resources to achieve the goals and profits (Chanias, et al., 2019).

7. Review: In this step key factors of successful deployment of strategy are required to review them constantly for effective decisions.

All these steps are used for determining and planning of the lyst and other organizations. In this process, all the steps are required to consider, especially in the selected lyst organization their business analyst and management team must make clear mission and vision in their objectives to achieve them and improve their profits with increment in customers. And their mission is to provide the latest fashion clothes and footwear for its customers.

Models and tools used by organizations to determine their strategy:

Every organization within the retail and marketing sectors they have to plan and determine the business strategies that will help them to achieve goals and objectives to improve their performance in the market and increase their profits. This process can be done with several tools and models, organizations can select these tools according to their requirements and needs. These tools mainly help the organizations to analyze and determine their effective strategies. Following are some main tools and models that are used by organizations to determine, plan, analyze their strategies of a business.

1. Gap analysis: This tool is most effective for internal analysis, this tool help to identify the main gap in a company that affective the progress to achieve the objectives & mission, vision. In this analysis this tool provides the process to compare the current state of organizations with its desired state in the future, this difference is providing a current gap in the strategies of the organization. The gap analysis helps to create several actions that will work as a bridge for gap identification, and it also helps to plan strategy with the best approach and in a meaningful, structured format.

2. VRIO analysis: This tool is also helpful for internal analysis, and it identifies the resources of organizations that have the potential for developing more sustainable advantages of organizations over their competitors. This VRIO analysis tool provides a different framework that is based on various types of traits, this framework help to encourage business organizations to think about how they can be moved all particular resources for the next step to develop competitive advantages (Mirkovic, 2020).

3. Analysis of 4 corners: This is another tool for internal analysis, These 4 corners are focused on the major competencies of a business company, this tool is mainly used for the long term. Most tools and models can evaluate the current state of entity sets, but they can analyze and assess the future strategies of a particular organization, which will help them to take one more step towards their competitors. With this tool, organizations can identify and know their motivation, competitors, current strategies, and capabilities, and it helps to provide different actions for improvement.

4. SWOT: This tool is also used by so many organizations, it is very effective to analyze the strategies, it includes both external and internal environmental factors of the business organizations. With the SWOT analysis is it important to use specific & verifiable statements, to perform analysis effectively (Abbafati, 2018).

5. Strategy evaluation: This type of tool is used by every organization with their previous strategies that required to be upgraded as per their needs and customer wants. This strategy evaluation helps with the previous strategy that not working properly to achieve the goals of business & profit increment. It helps to identify what went correct and well, and what was not good.

6. PESTEL analysis: This tool is very popular among several other tools, and also used by most of the organization to determine their strategies. This Pestel analysis tool helps to analyze external environmental factors of an organization, and also focused on the business operations that have an impact on the success of the organization. This tool is one of the most effective for external analysis. 6 different factors need to be considered while performing the PESTEL analysis following are its main factors.

• P- Political.

• E- Economic.

• S- Social.

• T- Technological.

• E- Environmental.

• L- Legal.

All these elements help to analyze the strategy and organizational environment, it helps to create a better understanding of the current or present state of the company, and how these factors impact the organization, also the PESTEL analysis is helping to focus on certain other elements that connected to a particular organization and help to reduce the negative impact on the organization (Mirkovic, 2020).

7. Porter’s five forces: This tool is focused on external analysis but also include internal analysis, this tool is very effective to scan the external environment of a particular organization. This tool provides a wide picture of the current market position of the company, and it creates different questions that help to assess the situation and current state, like what kind of forces beyond the competition, where to find competitor’s positions in the market, etc. Such questions are answered by the business analyst and management teams in a particular organization. These answers will help to create and determine better strategies, that can provide more profits, position, growth, and high customer rate for good performance of an organization (Le, 2020).

These all tools are used by different organizations to determine the strategies that will be more suitable for them and help to gain more profits, customer trust, investors.

Application of these tools to a real Lyst organization:

The lyst organization is an online retailer in the market of fashion they provide more than 5 million products for their customers, and the main focus on clothing, footwear for its customers. The Lyst organizations headquarter is in the UK, and they have more than 12000 brands. Lyst organization is providing a high range of products at one retailing place, and one wide-open platform they have provided to the customers. The lyst organization is using SWOT & Gap analysis to determine and analyze their strategies for business, and to achieve all the business goals and objectives (Lyst, 2020).

SWOT analysis	Strength	Weakness
Internal factors	Lyst organizations providing the latest fashion for their customer. Good customers services. Effective prices from other organizations. Good quality products. Lyst has well knowledge and skilled employees to provide a better experience to customers. Their online platform provides high security for the customer’s data, for their banking information.	In the Lyst organization, one of the main weaknesses is the time to deliver the products. Another weakness is providing more offers and schemes to the customers.
	Opportunities	Threats
External factors	For the Lyst organizations, there are fewer competitors. With several brand partners Lyst organization always trying to improve its performance.	One of the main threats for Lyst organization is their main competitors Mark & Spencer, and Farfetch organization, they also provide high range of fashion clothes.

Gap analysis: The Lyst organization has also used a tool of the gap analysis for determining and analyzing their strategies. In the Lyst organization business analyst and management teams are using gap analysis tools to analyze and identify the gap between performance and strategy. In this tool decision-makers, managers, and business analysts perform three main steps to determine their strategies and implement them by reducing the gap.

Figure 1 Gap analysis

(Source: Marketing91, 2020)

1. In the first step, gaps are identified by a particular team in Lyst, main gaps are due to segmentation in the market. This marketing segmentation is based on the threats from its competitors such as M&S, and Farfetch.

2. In the second step of this tool, various identified variables are reduced. In this step, all the factors that affect the profit rate and performance of Lyst organization are required to reduce by providing various offers and new schemes for customers.

3. In the third step new strategies, offers and schemes are implemented, and all the offers are needed to be advertised by well know vendors, and also they use social medial digital platforms for advertising their offers so that more customers can attract and purchase products from lyst organization. This will help them to increase and improve profits, performance, and customer trust.

Importance of change management:

In business organizations, there are various reasons to make changes in the business operation, strategies, and processes. These changes are required to manage effectively within the criteria of change management.

Following are key factors that change management include as its importance.

1. External factors, it is very important in the changes, and it helps in rapid development, growth of digital company solutions. If organizations are not considered the changes then they can not hold a high position in the market.

2. Successful ideas, the methodology of change management help to make successful ideas for organizations, and work to achieve goals. Hence change management is important to implement new strategies successfully (Karaxha, 2020).

3. Change management is important because it can provide cross-functional changes in the organization.

4. Change management is important because it engages people within the organizations to work more effectively.

5. Change management is important for the organizational transition.

6. To improve the productivity, performance, and profitability of an organization the change management is very important.

7. To reduce the cost of business operation, strategy development, change management is important for every organization (Hayes, 2018).

8. Change management helps to improve the technical aspects of business organizations so that they can improve the security of organizations as well as customer information.

9. Change management is beneficial for adopting new technologies that will help to reduce the risks of security and data privacy and gain customer trust.

10. Change management is important to provide sustainable products and services for customers (Cameron, and Green, 2019).

Conclusion:

In the above report entire discussion is based on the strategic management, and determining of strategies for business organizations. Initially, this report is provided an introduction of strategic management, and its definition is described. To create a better understanding of the process used by organizations to determine their strategies, in the report seven steps are discussed that involved in this process. The report is provided a critical evaluation of different tools and models used by organizations to determine and plan their strategies, around seven tools are evaluated. To discuss the applications of tools Lyst organization is choosed that used SWOT and gap analysis tools to determine and analyze their strategies. Finally, the importance of change management is discussed that is based on the sustainability, cost, transformation process, and risks.

References:

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Hayes, J., 2018. The theory and practice of change management. Palgrave.

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