Johnson, Scholes and Whittington identified three elements of strategic management that Cells Incorporated must consider in deciding whether to relocate to Dumbura. These are:

1. Strategic position
2. Strategic choices
3. Strategy into action

Each of these will be examined in some detail.

(i) Strategic Position

This is arrived at through an analysis of the position of the company in its markets. It involves determining the ways a company performs or can perform better than its competitors and vice versa.

It also requires an understanding of the factors in the ‘business environment’ that affect the company, and how the company will be affected by changes that are likely to happen in the environment in the future. Could the company be affected by changes in technology, the state of the economy or new laws? Even more important, perhaps, will there be changes in what customers want to buy, because of changes in society or lifestyles? If so, how might this affect what the company produces and sells? Hence, Cells Incorporated needs to take into consideration the facts presented in respect of the socio-economic environment of Dumbura.

Based on Johnson, Scholes and Whittington’s suggestions, there are three aspects of strategic position that Cells Incorporated needs to consider:

• The environment
• Strategic capability of the entity
• Expectations and purposes

Environment (Threats and Opportunities)

The business environment consists of the threats and opportunities that exist, and it is important for Cells Incorporated to assess their significance. Threats are occurrences in the environment that could adversely affect the ability of the entity to achieve its objectives. Opportunities, on the other hand, are factors that might be exploited, to improve the ability of the entity to achieve its objectives. Generally, both threats and opportunities are made up of variables outside of the firm’s control. The existing threats and opportunities in Dumbura that should be considered by Cells Incorporated include:

• Spiking rents, environmental pollution, growing hostility and increasing crime rates in Dumbura; and
• Availability of cheap labour, social infrastructure and tax incentives in Dumbura.

Strategic Capability of the Entity (Strengths and Weaknesses)

Cells Incorporated needs to assess its strategic capability to understand what it can achieve. This involves an analysis of its strengths and weaknesses. This includes:

• Identification of what Cells Incorporated is good at doing and what can be done to improve on these; and
• Identification of areas of deficiencies of Cells Incorporated where its rivals seem to be better and what can be done to improve in these areas of deficiencies.

Expectations and Purposes

An analysis of the strategic position of Cells Incorporated requires its management to take a decision on the purpose of the entity and its objectives. The purpose of Cells Incorporated includes the reduction of the cost of production and the exploitation of the local market. Cells Incorporated also expects to take full advantage of available social infrastructure in Dumbura, e.g., electricity, water, road and rail networks, etc.

(ii) Strategic Choices

This involves identifying different possible strategies that Cells Incorporated might adopt and making a choice of the preferred strategies from the different alternatives that are available. There are three levels involved in the process of identifying alternative strategies and making strategic choices:

• Corporate level and international;
• Business level strategies; and
• Development directions and methods.

(iii) Strategy into Action

The third element in the Johnson, Scholes and Whittington model of strategic management is ‘strategy into action’. This means implementing the chosen strategies. There are three aspects to strategy implementation:

• Organising
• Enabling
• Managing change