Importance Of Strategic Management In Modern Business - A Case Study Of Woolworth Group (70 Characters)

Question:

Discuss about the Strategic Management OR Sustainability .

In the modern business environment, the organization has to deal with an array of factors that affects its ability to expand their activities in the market, reach more consumers and generate huge revenues. In response to such targets, the management takes various processes and actions aimed at facilitating and further positioning the business in a competitive environment. Such positioning would only be possible with the adoption of strategic  management strategies because the process is paramount in improving its preparedness to deal and address the unexpected competitive demands from the environment (Langley, Smallman, Tsoukas, & Van de Ven, 2013). As such, the strategic  management must be an all-encompassing method of formulating, evaluating and implementing managerial decisions in a manner that permits the organization to achieve its objectives. For this to happen, the management must show concerns, involve many parties, train the participants and make well-organized plans.  

Woolworths first opened its business many years ago in Sydney in 1924. The initial market was a bargain basement outlet but later evolved over time to include many business units spanning across the globe. By 2012, the enterprise has developed to become one of the largest supermarket chains both in New Zealand and Australia regarding market share and consumer base. Woolworths operates various brands that include Woolworth’s supermarket's outlets, Dick Smith Electronics, Dick Smith Powerhouse and others. The group generated large revenues from its different business and service portfolios, but recently the case has been the exact opposite. For example, from 2006-2012, the company posted huge profits with 3.3% average growth during the period (Walsh, 2014).

However, Biddle explains that over the recent years, the benefit has begun to dwindle due to problems with suppliers and changing business environment. Besides, there has been intense competition from other brands and this has affected its market growth for the last two years. As a result the management has decided to lay off workers to adopt to the market forces and make profit. The chain has also been in the news for positive reason such as the use of technology to enable consumers manage their buying behaviors which is a blow to its competitors’ like amazon and Coles (Biddle, 2016).

The terms Strategic management is defined as the process in which a firm formulate and implements strategic plans to achieve its objectives. The process is continuous and entirely determined by the evolving organizational goals, values, missions and visions. All kind of businesses be it small, or big engage in strategic management to master the industry’s trends and other changes in globalization and technology (Vogel & Güttel, 2013). There are various theories used in strategic management in the organization. Some of the concepts involved the term goal setting, strategy formulation and implementation, and policy monitoring. On the other hand, the models applied in strategic management are necessary for the development and implementation of a plan and also in satisfying its mission and vision in the market. The model reviewed has some significant similarities such as performing an analysis of the environmental, determining the direction, development of and controlling of the strategy (Vogel & Güttel, 2013). The theory analyzed includes goal based planning, alignments and organic planning models.

Woolworth Group - A Brief Introduction

One of the models used in strategic management Goal-based Planning also known as is an Issue-based model. The mode is utilized by organizations such as Woolworth because they are established. It is used when the management wants to delve deeper strategic management process (Sun, Vancouver, & Weinhardt, 2014). When the management uses the theory, the first step is the SWOT analysis used in the assessment of internal and external forces present in the organization.  Secondly, the theory explains that identification of the major problems and goals will be prioritized. Besides, the vision, mission, and values are reviewed and updated to align with the critical issues and goals formulated by the management.  According to the model, then action plans and strategies to achieve the targets are used in the implementation of the goal (Grable & Carr, 2014).

The model has an influence on strategic management of Woolworth group. The management of the company has formulated and developed action plans, also known as SMART goals. This means the development of targets that are Specific, Measurable, Attainable, Results-oriented, and Time-bound (Beneke, Blampied, Cumming, & Parkfelt, 2015).  Above this, strategic plans which take long to be implemented such as more than one year comes up with strategic plans for a period ranging 3-5 years that are followed by updates and annual reviews of the larger project.  For example, firms ensure there is regular monitoring, evaluation, surveillance and updating of the plan to make them effective and. Besides, these actions are drafted into an actual plan where the employees and other stakeholders can keep track on the company commitment to achieve them (Jie, Parton, & Chan, 2015). 

Another type used in strategic management of Woolworth is alignment model.  The model focus on ensuring there is an alignment of the organization's mission and resources for the smooth implementation of the mission.  The model is very useful to firm’s managers who want to fine tune the set goals and evaluating why the company is unable to achieve these desired goals (Vogel & Güttel, 2013). In the model, the management role is to examine and review the mission, resources, and goals and to be the needed support. Further, discussion to understand what is going well and the issues which need adjustment is paramount. Therefore in the plan, the planning process prioritizes the changes which require being made and the methods of addressing them (Handfield, Cousins, Lawson, & Petersen, 2015).

The model is very influential in the management processes because the firm has aligned its resources, and environment with the missions and set goals. For instance, in the process of strategic management, the mission and visions objectives are linked to the environment which means they are set in consideration of the environmental opportunities and threats. Besides, the strategy actions and plans take place through the firm’s structure, culture and leadership and then evaluation take place (Dos Santos, Svensson, & Padin, 2013).

Organic Planning model can be applied in the context of strategic management in the organization that has stakeholders which wield immense power in the management. The model follows a linear approach and moves from broad to specific.  The process that is followed includes a continual focus the shared values, dialogue and communication that between and the stakeholders. These stakeholders are given an opportunity to contribute their ideas and share them with the larger group and are synonymous with the brainstorming (Handfield, Cousins, Lawson, & Petersen, 2015).

Challenges faced by Woolworth Group

The model is very influential in the management style of Woolworth because it encompasses diverse stakeholders with varying amounts of power in the organization.  Practically, the management and the board when arriving on something follows the storyboard technique and other similar technique known as the nominal group method where all the stakeholder involved has to play an active role in discussing issues and agreeing on what next. The model is relevant because it guards the tendency of few dominating the session while others are overlooked when discussing issues (Juan Ding, Jie, Parton, & J. Matanda, 2014)

Conclusion and Recommendations

According to the model examined above, the process of strategic management in very essential for the organization success. Many managers and leaders ensure that the goals and objectives to be achieved are linked to the mission, vision and the organization internal and external environment. Further, they must be specific, measurable, and attainable and result oriented. Monitoring, evaluation, and update of the goals and objectives are done to ensure they respond to changes taking place. Essential to consider in strategic management is organization structure, resources, culture and the important stakeholders in formulation and implementation of strategies.

The recommendations of the paper is therefore based on the strategy formation, formulation, implementation, and monitoring. In the formation level, the organization need to consider the ever-changing environment and include issues such as technology, competition, and globalization because they have a bearing on how the process takes place. Therefore, they must be adapted to the changing nature of the workplace and global technology as well as emerging markets.

In the strategy formation, the information available must be well utilized and greatly considered when making strategic decisions such as how to address the challenges facing the organization. For instance, the changes in the environment mean employees need to be trained with competencies and skills relevant in the market. It should also be oriented toward ensuring the organization is profitable and maintaining a competitive advantage.

In the stage of strategy implementation where the real policy is put into practice, the management needs to have all the necessary resources to achieve the strategic plan to life. These should be implemented through the formation of programs, budgets, and policies aimed at managing the finances, operational goals and human resources and. Essential to consider is the level of cooperation between senior workers and other personnel to make the process successful.

Finally, the process of strategy monitoring should be used to measure the fundamental goals and use the methods which produce the accurate results to understand the level of success and failure. Therefore the tools used should reveal to management the areas where they need to update when to make it adapted to the changes.

References

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Biddle, I. (2016). The Wesfarmers/Woolworths duopoly war: The Bunnings vs. Masters battle. Busidate, 24(3), 3.

Dos Santos, M. A., Svensson, G., & Padin, C. (2013). Indicators of sustainable business practices: Woolworths in South Africa. Supply Chain Management. An International Journal, 18(1), 104-108.

Grable, J. E., & Carr, N. A. (2014). Risk tolerance and goal-based financial planning. Journal of Financial Service Professionals, 68(1), 12-14.

Handfield, R. B., Cousins, P. D., Lawson, B., & Petersen, K. J. (2015). How Can Supply Management Really Improve Performance? A Knowledge?Based Model of Alignment Capabilities. Journal of Supply Chain Management, 51(3), 3-17.

Jie, F., Parton, K., & Chan, C. (2015). Australian beef supply chain integration: case studies of the two largest Australian supermarkets. International Journal of Supply Chain and Operations Resilience, 1(2), 121-138.

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Sun, S., Vancouver, J. B., & Weinhardt, J. M. (2014). Goal choices and planning: Distinct expectancy and value effects in two goal processes. Organizational Behavior and Human Decision Processes, 125(2), 220-233.

Vogel, R., & Güttel, W. H. (2013). The dynamic capability view in strategic management: A bibliometric review. International Journal of Management Reviews, 15(4), 426-446.

Walsh, B. (2014). Chain store retailing in Ireland: a case study of FW Woolworth & Co. Ltd, 1914-2008. Journal of Historical Research in Marketing, 6(1), 98-115.