The assessment of this subject supports students in developing their skills and knowledge in the foundational management topics that include external environmental assessment, problem diagnosis, strategy development, and the consideration of cultural and ethical contexts. Effective strategic management is designed to proactively respond to changes in technology, external environment, and market tastes. A contemporary understanding of the dynamic forces shaping strategic choices is essential for the successful execution and delivery of strategy.
- Over the duration of the course, you are to monitor news and online sources of opinion to identify three (3) separate strategic influences that together impact on the outcomes of an organisation of your choice. These influential factors may be local, national or international in nature, but they must represent a changing or
evolving story. For example, advances in battery technology, stricter emission controls, and a general move towards sustainable energy has resulted in General Motors (and indeed almost all car manufacturers) actively marketing electric or hybrid models for release in coming years. Note this example is not to be used in your submission.
- You are to discuss how the practice of strategy categorises these strategic influences, and identify the implications for the organisation in question.
- Drawing upon your understanding of theories, models and frameworks discussed in class, you are to identify a strategic course of action to address these circumstances (by either capitalising on positive influences, or minimising the impact of negative influence) in a way that will result in long-term benefit to the organisation. This should include a statement of the firm’s revised goals as a result of this change in strategy.
The strategic management is considered to be a relevant part of the organization and in order to ensure that the firm is able to successfully deal with the different factors as present, the organization needs to form certain strategies which will essentially be able to ensure that all the factors are planned against and the firm is able to maintain its positioning as present in the external environment (Abc.net.au , 2018).
This report will be based on the theory stated and will seek to identify the presence of three critical factors which exist in the external environment of th firm but have a strong impact on the overall functioning of the organization. The company which has been chosen for the analysis is the Woolworths Company and the main aim is to indeitfy three factors relating to economic, environmental and technological factors which might have a considerable impact on the firm and then recommend a strategy which shall help a firm to combat against these factors. Certain recommendations for the same will also be provided.
The primary aim of the given report is to highlight the three strategic influences which may have a strong impact on the firm and may have an impact on the current strategy as adopted by the firm at large. These aims and objectives will be successfully fulfilled with the help of a strategic analysis, using the PESTLE tool which shall help in identifying the different factors like Environmental, Technological, Economic, Social, Political or Socio-cultural which may alter the strategic course of the firm at large (Team, 2013).
The Strategic Analysis is stated to be an integral tool which can be used by the organization in order to understand the the external factors which are present in the external environment of the firm (Slack, 2015). These factors have been elaborated as follows:
- Political: The Political factors comprise of factors like governmental interference, laws prevailing in the country, the support of the business and other similar factors which are existent in Australia (Afr.com , 2018).
- Economic: The economic factors comprise of factors like taxation policies, interest rate, inflation rate and other related economic indicators which may have a strong impact on the overall functioning of the business.
- Socio-cultural: These factors can be stated to be the purchase behavior and buying characteristics of the selected target audience as present in Australia.
- Technological: The technological factors can be stated to be those factors which tend to have an impact on the overall functioning of the organization and determines the success of the firm at large (Stead & Stead, 2013).
- Legal: The legal factors comprise of the different rules as well as regulations which are required to be followed by in a firm at large (Businesslive.co.za ,2018).Australia has a well-defined legal law which comprises of factors like employment, business and others which can be considered by Woolworths.
- Environment: These factors are primarily concerned with factors like emission laws, use of plastic and other environmental concerned laws which will assist a firm in performing well (Jarzabkowski & Kaplan, 2015).
Out of the given analyzed factors, the three strategic factors which might have a strong influence on the overall functioning of the organization is as follows:
The technology which contributes towards the effective functioning of the business on the whole is largely considered to be an effective technology and according to Zott and Amit (2013), the technology undergoes a relative enhancement, which thereby encourages the different companies as present to make use of the evolving technology and see to it that they are easily able to build a firm which is perform well by all means (Williamson et al., 2013). Hence, even Woolworths has picked up this streak and has started making use of customer analytics.
They have used technology to cut down the costs of the company and as artificial intelligence has fairly become relatively popular, Woolworths and its check out procedure might also be greatly affected by it and shall contribute towards the company making use of a relatively new technology for its working. Although Woolworths can be considered as a market leader with respect to the performance of the firm especially in technological aspects, it will still be impacted by the overall change in the technological landscape of Australia (Morschett, Schramm-Klein & Zentes, 2015). This means that the firm, in order to achieve a competitive edge against the different competitors would be required to ensure that it is adapting the latest technology and ensuring long term success (Zdnet.com ,2018).
The major economic factors which has had a huge impact on the overall functioning of the Woolworths as a company has been the economic downturn (Rothaermel, 2015). This further led to a price war between the different supermarkets and other dealers which will have a huge impact on the price determination of the products which are offered by Woolworths. In addition to this, the food industry in Australia has experienced a considerable growth but has not been able to ensure that it has sufficient market share for all he competitors due to the price wars and other competitive factors having an impact on the performance of the firm at large (Theaustralian.com.au ,2018). Hence, although Woolworths may be hampered by the slowdown of the Australian economy at large.
The environmental issues can be considered to be a growing concern with the different business enterprises and in order to ensure long term success the different businesses would be required to ensure that they are able to abide by the different environmental laws which will then be beneficial for the business at large (Hubbard, Rice & Galvin, 2014). Hence, in line with this, in Australia, the use of plastic has been banned and for this reason, even Woolworths is required to see to it that ,
it abides by these rules and limits its use of plastics and other commodities at large. This will go a long way in contributing towards the protection of the marine life which would ensure a safer environment for the different people (Merat & Bo, 2013). In order to promote this initiative, the government has promoted a system of green environment credentials which would then encourage the employees to perform well and in favor of the environment at large (Thenewdaily.com.au ,2018).
Categorization of the factors and their strategic implications
Woolworths has been in this particular business since a very long period of time and with respect to this the business is required to ensure that it takes due care of all the factors which are present and undertakes strategies which will ensure and bring about overall success to the firm (Hill, Jones & Schilling, 2014). Hence, the environmental, economic and the technological factors reviewed as the critical factors and with respect to this it will have various implications on the firm as well which have been stated as follows.
Firstly, due to the technological advancements, Woolworths will be required to ensure that it changes its operational tactics by means of which the company will be able to ensure that it’s able to make use of the advanced technology and bring about acute efficiency in its operations (Lasserre, 2017). In lieu of this the firm will be successfully able to achieve success in the long run.
Secondly, with respect to the economic downturn of the economy and other impacts on Woolworths, the company may largely enforced to undertake the layoffs of a large number of employees and engage in considerably cost cutting techniques which will then help them to cope up with the different changes at large (Hahn, 2013).
Lastly, Woolworths might be required to engage in conservation with respect to its operations which means that the firm would be required to cut down its use of plastics, or other processing techniques which may not harm the marine life and other such environmental aspects.
Strategic Course of Action to be adopted by Woolworths
As a response to the different environmental factors which exist in the business, Woolworths would be required to take considerable measures because there are various implication may form a barrier with respect to the firm`s strategic objectives. The different strategic courses of action which may be required to be adopted by Woolworths is as follows:
- Woolworths would be required to come up with a technology which allows the firm to make use of artificial intelligence and combines the entire systems of the company under one head (Dailymaverick.co.za ,2018). In this manner, the strategic management becomes considerably easier and the organization can be managed easily as well. This has a two way effect which not only allows the firm to ensure that it will be able to save costs by bringing about effectiveness of the operations but also ensures that the operations can be carried out easily.
- Secondly, Woolworths can also look into its environmental concerns by taking measures which will help in the reduction of the different plastic as used (Johnson, 2016). The plastic waste which is incurred by the firm impacts the marine life of the country seriously and hence, it is recommended that the firm makes considerable use of environmental friendly technology which would then allow the company to ensure that it is able to make use of biodegradable products which get decomposed easily and thereby limit the use of plastic by a considerable amount which would be quite beneficial for the firm at large (Grant, 2016).
- The company can also engage in services like home delivery, online application ordering and employing considerably less staff which would then assist the frim to engage in cost effective measures and thereby save the different costs as associated with the firm.
Statement of revised strategic goals
Woolworths needs to aim to ensure that it is able to make use of less plastic bags which would then promote the economy.
- Woolworths is required to also ensure that it is able to make use of considerable cost effective technology which then permits the company to improve its market positioning in the environment and reduce the costs of the operations as well.
- Moreover, it aims to earn a considerable amount of Environmental indicators as well which will be an indicator of the wellbeing of the firm.
Therefore, from the given analysis, it can rightfully be stated that Woolworths need to take considerable measures which will thereby ensure that it is able to maintain its strategic positioning in the market and thereby ensure considerable success for itself in the long run. The given report throws light on the external environmental factors which tend to have a huge impact on the overall performance of the firm and the manner in which these factors have had an impact on the performance of the firm.
Categorization of the factors and their strategic implications
The three crucial strategic influences which have had an impact on the overall operations of the chosen Woolworths are technological factors, economic factors and environmental factors. The implications of these factors on the overall functioning of the business have been stated along with the suggested strategic courses which can be taken up by the firm. A list of revised strategic goals have also been stated. The following section, will provide certain recommendations which can be followed by Woolworths.
In order to ensure that the firm is able to successfully engage in a series of actions which will be beneficial for the firm, it is recommended that the firm engages in the following:
- It needs to undertake a strategic analysis on a continuous basis which will ensure that the firm is successfully able to engage in strategies which will ensure that the firm is able to maintain its market positioning in the market (Vogel & Güttel, 2013).
- Communicate effectively with the employees- If the firm is successfully able to engage in a healthy relationship with the different employees, then it will successfully be able to carry out the strategies quite adequately (Wheelen et al., 2017). This is because it will be able to attain employee cooperation which speeds up the entire procedure.
- Additionally, Woolworths can also engage in effective corporate social responsibility towards the employees as well as towards the environment so that it is able to reduce the impact of its operations on the whole.
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