- 20 Marks
SCS – L3 – Q43 – Strategy, stakeholders and mission
Question
(a) Transformational leaders have been posited to impact an organization’s culture, structure, and strategy. These types of leaders manifest themselves as change catalysts, who manipulate organizational factors with the aim of improving knowledge cycles.
Required:
Explain FOUR expectations of leaders in strategic management.
(b) One of the criticisms levelled against the five competitive forces model is that it is static – i.e. it does not focus on the dynamic nature of the business environment. Thus, two other concepts that are proposed to deal with competition dynamics are the concepts of strategic group analysis and the cycle of competition.
Required:
Explain the concept of strategic group analysis and identify THREE examples of common strategic characteristics that define a strategic space. (c)
Demand conditions in the home market is one of the four factors in the Porter’s Diamond Model used for analysing the international environment before formulating an international strategy. The home market determines how firms perceive, interpret and respond to buyer needs.
Required:
Explain THREE home conditions that may put pressure on firms to innovate and provide a launch pad for global ambitions.
Answer
(a) To change organizations and systems from within. To drive forward adventurous, visionary strategies. Leaders need to have a clear vision for the future and what needs to be done to get there, so that they can inspire others to aim for the future as well. To provide clarity of purpose and direction. To be good communicators, both to communicate their vision and purpose, but also to listen to others’ point of view and gain their trust. To motivate others. Visionary leaders motivate others to work harder by making work seen as natural as play, and by making their teams see the value and purpose in what they do.
(b) Strategic group analysis is a competitive analytical tool used in strategic management to group firms within an industry into various sub-groups that exhibit similar strategic characteristics and compete on similar bases. Strategic group analysis enables a firm to identify its competitive arena and, thus, assist managers to identify the firm’s closest and most influencing competitive rivals. The analytical tool enables organizations to overcome the limitation associated with the five forces analysis, which deals with the competitive environment in broad industry-wide terms. The strategic space pertaining to a strategic group is defined by two or three common strategic characteristics. Examples of strategic characteristics that define a strategic group are Product diversity Geographical coverage Extent of branding Pricing policy Product quality Distribution method Target market segment.
(c) There are no cultural impediments to communication. The segmentation of the home market shapes a firm’s priorities; companies will be successful globally in segments which are similar to the home market. Sophisticated and demanding buyers set standards. If the home market sets high standards, achieving these high standards will put a firm in a strong position to be competitive on the international market. Anticipation of buyer needs: If consumers’ needs are expressed in the home market earlier than in the world market, the firm benefits from experience. The rate of growth. Slow growing home markets do not encourage the adoption of state-of-the-art technology. Early saturation of the home market will encourage a firm to export.
- Topic: stakeholders and mission, Strategy
- Uploader: Salamat Hamid