Each student will write a strategic analysis report of NOT more than 2500 words. The report should demonstrate that the student has thoroughly researched their topic. Students should use examples of business practice from the scholarly journals papers, conferences, books and professional magazines to support their arguments. The strategic analysis will be on a local company. The report consists of two parts and should cover the following requirements:
- What industry is it?
- General environment analysis (economic, physical, sociocultural, global, technological, political/legal and demographic – and work out what the important facts are).
- The industry environment ((i.e., supplier power, buyer power, potential entrants, substitute products and rivalry among competitors) and explain briefly what is significant for each).
- Competitive environment (Is there a strategic group that you need to take account of? What is the rivalry like in this group? What capabilities do the relevant firms have? What strategies do they follow? What threats do they represent?)
- Opportunities and threats
The study below outlines a report of consumer goods Company operating in Australia by name ABB Grain. The research describes important environmental analysis, for example, ecological, social, and technological features. In broad, the report is enriched to deliver strategic analysis of functioning the business in the competitive market around the corporate. The research is seriously done with the appropriate knowledge of many consumer goods productions that operates with the aim of delivering quality goods at fewer costs. The establishment delivers rural amenities comprising of nourishment and agriculture chemicals supply and fur and livestock undertakings. The later it acquired support by the attainments of Wardle Co, Adelaide Wool Company and Stawool in the year 2007.
The company tends to have significant set-ups in New Zealand focussing on the trading and delivery of proteins materials and grains. In the year 2007, the company recognized a dual venture in Ukraine with France based malting company (Soufflet) to amass grain, market their grains and control supply chain actions. The company takes venturing aspect an important factor as it improves business undertaking all over in foreign states. By giving both an exclusive look at new technological grounds and a path to conceivable ownership or new concepts applications, commercial venturing allows a firm to respond speedily to market changes. According to Hill 2017) venture endowment can attend as an intelligence-gathering inventiveness, assisting a company protects the situation from developing competitive coercions.
Industry type connected with the company is a manufacturing type denoting the industries that incorporate in the industrialized and material processing and result in both formations of new supplies or value-adding facet. The sector (manufacturing) earns a vital industrial segment share in industrialized states and also in some middle developed countries. The end product tends to either accommodate full sale merchandise to customers or as an intermediate product applied in the process of manufacturing other goods/services. These establishments (Manufacturing) are the main wealth-creating segments in any of the thrifts around the globe. These productions smear various technologies and are extensively referred to as manufacturing procedure administration where they generate physical merchandises (Brack et al., 2015). How these possessions are created differs depending on the exact company and industry. Though, most producers use machinery and industrial apparatus in producing goods for public consumption. The manufacturing procedure generates value, meaning businesses can charge a premium for what they always deliver.
General environment examination of the company under deliberation is that it principally enhances pay, wealth and impartial distributing them. The political consideration of the countries the company is operating from is rich to improve effective operation. There is the existence of political stability where it offers a conducive environment for the company to work efficiently. Business operating in unstable conditions (political) tends underperforming due to several factors brought out by the insecurity and instability. Political steadiness and economic expansion are deeply interrelated. The relationship among economic growth and stability denotes to the state that the political security of a country can lead to its economic development. A study by Morris and Metternicht (2016) states that mutual denominator and the most reasonable relationship amid economic growth and stability is the element that a stable environment nurtures economic growth. The indecision associated with an unhinged political climate tends to decrease investment and the speed of economic expansion. On the other hand, deprived economic performance may prime to government downfall and political strife. A politically wobbly environment usually denotes that the government is exploiting or mismanaging the republic’s resources: possessions are not fully utilized, or in a manner where economic expansion could be enhanced.
Technological analysis of the country under consideration is that it is one of most developed countries in the world regarding technology thus giving ABB Grain Company an upper hand in development. Automation capability will enhance many unskilled tasks to turn to allow the company to substitute human production shapes with entirely machine ones. This aspect reduces manufacturing costs, cost to distributors, superstores, and many other different productions. On the dismissive side, the steady increase in job automation ought not been such an abundant thing for job hunt firms. Australia is rich in Internet connectivity, and it’s undoubtedly that in the latest year’s worldwide internet connectivity has been on the upsurge. This offers an even superior market for many businesses who apply internet capabilities in connecting with their clients. On the flip side although, a global increase in internet connection might mean less interest in traditional communiqué means, which is a negative result for some telephone facility providers will have to alter their offerings to remain relevant, while paper and ink production companies might obtain less business.
The company on demographic analysis is enhanced as it works on values/targeting more adults in the business as fewer youths are entitled in agricultural practices. The adult population of the area is significantly considered thus enabling them to define the appropriate amount of output delivered in the market. In cultivating more customers in the market, ABB Grain tries to educate youths on the importance of agricultural practices.
The company goes further by enhancing that the social culture setting of the place is considered in their performances. The social-cultural context of the region permits agricultural based operations which in line goes with objectives of ABB Grain. The company is entitled in giving back to the company thus assisting them in development aspects in the area. Social culture enhances that all practices are in accordance to the setting on the region.
Analysis of potential analysis in the industry is not an exceptional reason that more investors are coming up day today. New entrants in business may deliver a threat to one's company as they will come to produce similar or substitute goods which bring competition to the market. Risk of new participants Porter created shakes the competitive set for the existing contestants and influences the aptitude of existing companies to achieve profitability. For instance, in height threat of entrance means new competitors expected to be attracted to the returns of the industry and can arrive in the industry with much comfort. New entrants entering the market can either portend or decrease the market segment and profitability of prevailing competitors and may upshoot in changes to standing product quality or price stages. According to Keller (2015) as new entrants flood the market zones, one supposed to enhance a plan to counter before it influences the business. A great menace of new entrance can both prime a trade more competitive and lessening profit potential for existing contestants. On the other hand, a low threat of admittance makes the industry less viable and increases profit possible for the existing organizations. The company is subjected to the danger of potential; entrants as the government in place encourages investments in the industries as it improves the economy of the entire state.
ABB Grain Company experience opportunities for distributorships. A distributorship includes entering into a contract to offer and sell the product of others, without being permitted to use the builder's trade name as a fragment of the agent's trade designation. Contingent on the agreement, the supplier may be restricted to selling only that business's goods or may have the liberty of marketing several different creation lines or services from various companies. ABB Grain firm had ventured with other companies thus enhancing opportunities for selling their products overseas hence becoming more competitive to deal with competitors in the entire market.
Another opportunity ABB company experiences is the aspect of network marketing programs that features low upfront investment and the chance in vending a product line straight to friend, household and other personal interactions. Most network advertising programs also ask members to recruit additional sales agents. The employees constitute a representative's "downline," and their auctions generate income for those overhead them in the platform. Gears can get tacky when a network marketing recompenses participants chiefly for conscripting others entirely than for vending the company's merchandises or services. A system (network marketing) in which most of the profits comes from recruitment may be reflected as an illegal pyramid system. Subsequently, network marketing plans are usually exempted from business chance regulation and are not defined as contracts under state and central franchise laws, as one is entitled in performing his/her investigation before capitalizing any money.
The most worrying threat of ABB Grain Company is economic environment business threat. The economic environment poses risks to several businesses as several products/services not selling in a sound aspect during the economic slumps, such as a collapse. Moreover, clients tend to reduce their spending while sales operators tend to cut their assets investments. Other merchandises and services, conversely, sell enormously well during recessionary stages. If a proposed commercial entity will excel, hesitate, or remain unscaled during financial downturns. In every economy, whether in a developed country or developing countries there always an anticipated decline of the economy thus it becoming a threat to almost all companies.
The ABB Company also experience the threat of technological changes in the imminent future. Technology application plays a crucial role in many businesses. The computer productiveness, for example, spends an excessive time deal and money looking for more operative and cost-efficient conducts to bridge the breach among humans and computers. Computer corporations creating an improved and more natural tactic to computing will undoubtedly experience success. For ABB Company as it is operating in a state where technology is a crucial success factor, it is essential to hunt for ways to become more technically advanced continuously. Every company in operation should enhance capabilities of dealing with every or most technological advances in order not to negatively impact the outcome of the business.
ABB Grain Company contains resources of various kind, Tangible and intangible resources that are a vital element in every organization. The Company got an extensive piece of land. As all know that area is the prime tangible business asset. The land is any portion of the property or any grounds utilized by the business in carrying out various productions. Land can devote to a real piece of land where cultivation is carried out if the activity associated with agro-products. Also, Land tends to mean all the places within that a factory is positioned or even where an office is located. The land is one of the excellent vital, tangible resources that are indispensable for a business to operate efficiently. The other substantial supply ABB Grain Company got is the aspect of labor. It is a form of tangible support that is obligatory in exercising out any practice of production. Labor is the physical resource that operates machinery generating output thus delivering profit to productions. Labor can be of several types. While unskilled labor might be suitable for manual procedures, while highly expert labour is required to operate stylish machines that generate meticulousness output. Such a skilled labour force is much in the mandate in precision productions as it is instead challenging to obtain enough qualified employees. Labour as a tangible resource for business means all persons that are comprised in the production procedure, and it contains every person; right from the machine operates to the highly capable production administrator. Langford, Fellows, Hancock and Gale (2014) states that economics never distinguishes between structural status and position of a single person and if that particular individual delivers service to the association, they are all deliberated as labour.
Intangible assets of ABB Grain Company comprises Intellectual property that merely a subclass of intangible assets. Confident new economy businesses, which may be demarcated by the state of their intellectual property, are now contending in a knowledge-based frugality. While old economy establishments competed under the armor of their elements and mortar, the new economy firms that are dependent on their intangible assets struggle for market share with adaptation and invention. The company also has another intangible asset as a form of Goodwill. In accounting, goodwill is an intangible asset arising when a particular customer obtains already existing business. Goodwill signifies resources which are not distinctly identifiable. Goodwill in ABB Company does not include recognizable assets that got capabilities of being separated or divided from the unit. The goodwill resource type extends to the excess of the acquisition consideration which is the amount of money compensated in buying the asset or existing business) over the entire value of the possessions and liabilities. In the balance sheet, the goodwill aspect is considered as an intangible asset, for reasons of neither not seen or even touched.
ABB Company got various capabilities that assist much in their operations to enhance best output realization. They strengthen management capability which is the only active aspect of management and is a tactic that applies the organization's client value proposition to created performance objectives for skills grounded in value involvement. It aids driving out inadequacies in capabilities that back low customer effect and focus productivities in areas with significant financial leverage that preserve or capitalize on entire growth abilities. The other capability the company has is the capability of sustainability where the firm maintains the uniqueness and superiority of the proficiency relative to other firms notwithstanding their sweats to imitate or duplicate the final products available for marketing. One tactic to sustainability ability is ensuring ABB Grain Company develops the capability faster than its competitors through learning and invention (Barney 2017).
In the core competencies analysis, it clearly understood that the company performs in fulfilling the competency tests concerning their capabilities. Management capability ensures that there is a noteworthy contribution to the professed customer benefits of the end product available in the market. This aspect enhances customer satisfaction hence enabling loyalty to their products which in turn improves the sales volume hence high-profit realization. Sustainability enhances the test of making it demanding/challenging in products imitation. The capability enhances high competitive advantage in the market as competitors are not in a position to imitate theirs produces.
Management information system (MIS) is the proposed information system that will improve the actual productions of ABB Grain Company. The method comprises management information systems thus scrutinizing people and technology in a well-defined structural setting.
In a commercial setting, the eventual objective of management information system (MIS) is in line with increasing the value and profits of the corporate. Whereas management information systems tends application by any and every management level, the decision of which structures tend implementation generally prime upon the chief technology officers and chief information officers (Cavalaris et al. 2015) They usually accountable for the overall technical approach of the organization including assessing how improved/new technology can assist in productions upsurge. They further tend acting as verdict makers in the implementation procedure of new management systems. Upon enactment, the allocated users will enhance proper access to pertinent information. It is important noting that not anyone feeding data into system needs necessarily be level of administration. It is a corporate exercise to have non-managerial staffs record data inputs to the system though they rarely have admittance to the reports and decision support platforms presented by management information systems.
I recommend the company to enhance advanced information systems that try to ensure the speedy, accurate conversion of vital information associated with navigation safety. Some performing agencies by now utilize information systems that endorse navigation safety in carrying out their goals/objectives. With ever amassed complexities of business as well as supervision, currently, Information systems are not purely required for refining effectiveness of business operations. I recommend better utilization of the system for effective decisions in the business and achieving strategic benefit. Management systems in the organization tend to enhance better functioning with capabilities in the business divisions. Active administration in the industry will improve proper strategic planning which in turn will provide elements of meeting the stipulated goals (Fountas et al., 2015).
Barney, J.B., 2017. Resources, capabilities, core competencies, invisible assets, and knowledge assets: Label proliferation and theory development in the field of strategic management. The SMS Blackwell handbook of organizational capabilities, pp.422-426.
Brack, W., Altenburger, R., Schüürmann, G., Krauss, M., Herráez, D.L., van Gils, J., Slobodnik, J., Munthe, J., Gawlik, B.M., van Wezel, A. and Schriks, M., 2015. The SOLUTIONS project: challenges and responses for present and future emerging pollutants in land and water resources management. Science of the total environment, 503, pp.22-31.
Fountas, S., Sorensen, C.G., Tsiropoulos, Z., Cavalaris, C., Liakos, V. and Gemtos, T., 2015. Farm machinery management information system. Computers and Electronics in Agriculture, 110, pp.131-138.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function. Macmillan International Higher Education.
Keller, W., 2015. „Using capability model for strategic alignment” in Simon, D.; Schmidt, C.(Eds.)(2015): Business Architecture Management-Architecting the Business for Consistency and Alignment; To be published by Springer in the series. Management Professionals.
Langford, D., Fellows, R.F., Hancock, M.R. and Gale, A.W., 2014. Human resources management in construction. Routledge.
Morris, A. and Metternicht, G., 2016. Assessing effectiveness of WEEE management policy in Australia. Journal of environmental management, 181, pp.218-230.
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