Development of Management Strategy for Growing Company

Development of counseling Strategy for Growing CompanyIntroduction now technologies argon call forthing so fast that if we ordain not be able to adopt them in time, than our keep smart set becomes non- free-enterprise(a). This project was d maven with an taper to apply gained knowledges in engineering and everywheresight course, to analyse how selected firm quarter be true from engineering and counseling sides. Engineering studies allow protagonist from the one(a) afford to apply engineering knowledges, plainly from the former(a) hand to stupefy knget new technologies and how they sop up our life break. Universities implement in management and grocery store studies pull up stakes divine service to do analyses of rival companies and knead clear how follows management substructure be modifyd or adopt from lasting prosperous companies. on that point atomic number 18 two definitive exhibites in twist construction, foundation and roof. Both construction s atomic number 18 equally alpha for building wellbeing. Foundation assume to be functioned and build up safe in the beginning of construction, besides roof gather up to be do during all buildings life conclusion. It hatchs that roofs argon every sequenced time of period that depends on material, withdraw to be overlaid or repaired. On this hypothesis was natural projects engineering part. For projects object was selected a construction firm that focused on roof construction, its technologies and sheet metal works.By exploring roof securities industry result be determined its growing technologies with an aim to adopt them to selected firm. Exploring major roofing companies management, leave help to improve chosen firm topical personal manner of management.Generally this project is based on roof technologies, management marketplace placeing research. Gained experience will be app deceitfulnessd to chosen firm maturation in all directions.AimDevelop management o utline for a small partnership.Objectives1. Literature re billet of management prescriptive scheme organic evolution* analytic thinking of surround* abstract of options* Development of familys pot, bursting charge and target line of business* Types of management strategies2. Choose a fellowship with an aim to apply management system3. Literature review of chosen company4. Develop management system to the chosen company5. Develop additional management improvements6. Conclusionstrategic ManagementEssence of strategical ManagementAccording to the Emergent view at that place atomic number 18 strategist that suggest that it is effortful to predict rising and strategy quest to be to a greater extent dynamic with an element of risk.The normative view strategic management is about defining a habit and plans of presidency and work out the actions to achieve desired proposes. The essence of strategic Management consist from two levels that ar shown in manakin 1 and described below * General corporate level Decision devising process depends from in what type of business organization company belong. The leadership and civilisation of corporation ar very important strategy management.* Individual business level Decision devising process globally based on competing for clients, generating valuate from tangible and intangible business resources and focus on resources that rump bring militant avail. Strategy is about relations of congenital capabilities and remote relationships. enter 1 Essence of Strategic Management (Lynch, p5, 2010)(Lynch, p5, 2010)Approaches to Strategic Management in that respect are exist two different attackes to strategy prescriptive and Emergent approach.The prescriptive approachApproach is based on head that future is predictable and strategy modernizement begins from Where-we-are now and all objectives and steps how implement ideas are mystifyed. The prescriptive theory bind 3 gist areas Strategic psychodepth psychology, Strategic development and Strategy implementation. All three areas are c draw backly related sequentially. The prescriptive strategy development process shown in Figure 2.Figure 2 The prescriptive strategic process (Lynch, p19, 2010)The sudden approachApproach is based on view that strategy emerges and developed during further period of time based on unpredictable purlieu. The final objective of emergent approach is unclear and objectives are developed during its realisation. Strategic analysis, Strategic development and Strategy implementation are interrelated. But because strategy is implemented by improvisation and allow mistakes, it is not command to strive clear distinction in development and implementation shapes. The prescriptive strategy development process shown in Figure 3.Figure 3 The emergent strategic process (Lynch, p19, 2010)Analysis of EnvironmentAnalysis of surround is a research of everything and everyone in external environs. It in cludes suppliers, nodes, competitors, government, technologies and so forth in that location are exist nine different tools how environment give the bounce be analysed and they are shown in Figure 4.Figure 4. Environment analysis tools (Lynch, p74, 2010)Environment basicsThere are three basic things that should be analysed* foodstuff definition and sizing Question study to be asked in this area is What is the size of market?. It is important to know market size because it will help to design strategy objectives. Market size ordinarily shown in annual gross sales. Market growth by and by establishing market definition and size need to evaluate how much the market has grown in feature period of time, usually in a year. Market growth rate will regulate strategy objectives. Organization that would like to grow quickly will be interested in fast growing market Market get by It batch be defined as ratio of all sales in a market that is detained by particular company. There are different ways how market deal out skunk be mea incontestabled, but well-nigh important of them are Sales revenue and Sales volume. (tutor2u)(Lynch, p79, 2010) compass point of turmoilIt is important to evaluate external conditions of brass section, specially dynamic of environment. In strategy environment will dupe high degree of turbulence it will be impregnable to apply analytical techniques. Environmental forces that lure cheek* Change king Degree of environment change exponent that shows rate how external calculates likely to change. Changeability splits further in such(prenominal)(prenominal) factorso complexity Degree of complexity of such factors as internationalisation, technological, social and political.o gaud Degree of how often new situations knead environment.* Predictability Degree of how changeable environment is predictable. Predictability is subdivided in two categorieso Rate of change How fast environment changes. Usually rated from slow to fa st.o Visibility of future Based on previous experience determine how predictable is future.Figure 5. Dynamics of environment. (Lynch, p81, 2010)After doing analysis of factors above will be possible see how unchanging will be strategy for particular environment. In predictable environment with low turbulence sight be used prescriptive approach. In case of high turbulence better to use Emergent approach because of high rate of change where designed objectives fag lose their cherish in short period of time.PESTEL analysisPESTEL is checklist type analysis that is astray used to analyse environment in different directions. Analysis depose on past experience and events that after listing digest be used to forecast future or apply them on company improvement design. Factors that need to be discovered in PESTEL analysis policy-makingo government policyo Regulations Economicalo macrocosm trendso GDPo Inflationo Unemploymento zilch cost Socialo Changes in lifestyleo demographico customer demando Populationo polish Technologicalo Patents and point of intersectionso Technology developmento step on it and change of technologieso Innovations Environmentalo Public opiniono Green issueso Recyclabilityo Renewable energy Legacyo Lawo Health and Safety(Lynch, p82, 2010)Indus strive life oscillationEntity of strategy will change as company move from one life oscillation phase to another. In the Introduction phase, company try to attract interest in new increase. As harvest-tide became more than(prenominal) recognizable and increase in demand than industry moves into next phase called Growth and with demand increase amount of competitors. Over time when market is saturated and most customers are satisfied with overlap life wheel around proceed to maturity phase where growth is slowed down. Few competitors may spousal relationship in this phase, but effortful to give way because of high competition. After Maturity phase cycle start to Decline. Whole pr ocess is shown in Figure 6.Figure 6. Stages of industry cycle. (Lynch, p87, 2010)Company have more opportunity to survive and gain more earnings in life cycle ahead of time ages while entering barriers are low and there are tho few competitors. But it is hard to determine the beginning of life cycle because if its unpredictable duration.(Lynch, p87, 2010)Key factors for succeederThe Japanese strategist Kenichi Ohmae argue that for prospering strategy ecesis should define key factors for success that will help to define objectives more correctly. Key factors are resources such as skills, labour, experience or attributes that can bring warring expediency to organisation. Key factors can be determined not provided from internal advantages but excessively designed based on external environment. There are three factors need to be analysed guests What exactly customers essential? Who are they? are there any special segments? Why they buy from us? pauperization to be evalua ted (Lynch, p95, 2010)o Priceo Serviceo Product or service reliabilityo Qualityo Technical stipulationo Branding Competition What factors help company to compete successfully? Who are our competitors? What factors captivate competition? Need to be evaluated (Lynch, p95, 2010)o embody comparisono Price comparisono Quality issueso Market dominanceo Serviceo Distributors Corporation Companies technologies, organisational ability and trade? Key resources of our competitors? Need to be evaluated (Lynch, p96, 2010)o utter-cost trading operationso Economies of scaleo Labour costo deed output levelso Quality operationso Innovative abilityo Labour/Management relationso Technologies and copyrighto Skills(Lynch, p94, 2010) porters beers five forcesOne of the most important organisation analysis that need to be per hurled is evaluating environment forces that influence particular company. Such evaluation will help to gain better hawkish advantage than rivals. Professor Michael Porter issue model (Figure 7) that helps evaluate forces that will help to understand organisation opportunities.Figure 7. Porters five forces model (Lynch, p95, 2010)The bargaining power of suppliers Every organisation require raw materials to produce product or service it mean that organisation depend from raw material suppliers. There are shown how suppliers can influence organisation* If there are few suppliers it means that it is hard to switch to another supplier in case supplier is conserve its power.* There are no substitute raw materials that supplier provide.* boldness costs depend from suppliers price. If supplier increase price for provided material than costs will increase and organisation need decide increase product price or not. developmentd price can lead to lose of competitive advantage but if price stay the same that return will be smaller.The bargaining power of buyers To make a profit organisation sell their products or service to customers. Every customer have n eed, wants and own opinion about particular product. Organisation should make customer power analysis to understand who have more influence over other. There are roughly issues* There are only few buyers. Organisation have weak come out and generally depend from customers and want to attract them as more as possible. In this case customers can easily influence organisation.* Product or service is undifferentiated. Customer can easily switch to product offered from other organisation.The threat of new entrants charm of new rivals is possible whet profit margins are attractive and entry barriers are low. Porter argue that there are seven factors that influence entry barriers1. Economies of scale Production cost are reducing when product volume significantly increased. These cost reductions provide entry barriers, because company entered in such market forced to keep small price to be competitive.2. Product differentiation Brand, level of service, attracted customers provide entr y barrier because by entering in such market will lead to pass off extra funds and time to make new brand more recognizable and establish in the market.3. Capital requirements Entrance in some markets require investment in technologies equipment, distribution etcetera4. Switching costs When customer is satisfied with provided service or product he is not thinking about other products and it is hard and require high investments to influence customers opinion.5. Access to distribution channels Production need to be effectively distributed. It takes long time to establish own distribution channels and make it work profitably.6. Cost disadvantages independent of scale Already established companies invested merely in infrastructure and gained mayor buyers in the market. It becomes hard for new company to think what to start with, because infrastructure is already established and it is hard to concern changes.7. Government policy Government tend to secure local companies and l et on law that defend them.The threats of substitutes Substitutes is something that can replace a product or service usually provided for smaller price. Things that need to be analysed congeneric to substitutes* Customer ability to switch to the substitute* The possible threat of obsolescence* What costs will provide switching to substituteRivalry among existing firms Some markets and companies are more competitive than others. There are thing that need to be analysed (Model of competition)* Number of competitors* Size of competitors* Growth rate* Product differentiation(Lynch, p97-101, 2010) quartet links analysisMost organisations links unneurotic to perform better with other companies help. Co-operation can lead such factors* Reduce costs* Increase organisations sustainability* Open new market sectorsThe Co-operation usually divided in quaternary subgroups that help more clearly define co-operation type and how it might be improved Informal co-operative links and networks T he organisation links and co-operates together on mutual basis without contract. The analysis need to be made to find out what opportunities will provide such link. Usually analysis suppress from strengths and weaknesses. Need to pay attention by forming mutual contract because in case fraud it will be hard to prove that particular company is right. Formal co-operative links Formal co-operation is linked with legal contract. The divergency from informal co-operation is in degree of formality. Such links usually form alliance or joint ventures that works together for many old age to gain competitive advantage over rivals and take more market share. Complementors The Complementors are companies that supply products that add value to final product. Usually such co-operation is based on several companies that provide different skills and resources that work together on manufacturing of one product. Such organisations have interdependence between themselves. Government links and ne tworks The organisations that have linkage with government.(Lynch, p102-105, 2010)Competitor analysisIn most markets there are more than one competitor. It is hard to evaluate apiece of them and because usually it is done by taking few companies and making concentrate evaluation. It will help to understand what advantages and disadvantages compare to organisation rivals have. Broad analysis of competitors and their power helps to find their forces. Basic analysis will consist from making competitor profile based on such issues Objective An analysis of competitors objectives help to forecast its strategy. If competitor tend to gain market share then probably will start to implement aggressive strategy. If pursuit profit growth than possibly competitor will invest scarcely in new plant or improve technologies. Every objective can help to forecast rivals action. Companies annual statements can be recyclable in evaluating but need to be analysed wit attention because of factor of bluffing. Resources The type, size and amount of resources that provide competitive advantage to company need to be analysed. Past record of writ of execution Can provide companys successful performance that can be adopted. Current products and services Links with other organisations adjudicate links, alliances and other types of co-operation than stage competitive advantage. Present strategies Innovation, customers, investments, market share, product range etc. tax how such things used for strategy purposes.Customer analysisCustomer is crucial resource of company profit income. any(prenominal) company will always be interested in as more as possible customer attraction. There are measurements that can be used in customer analysis* Identification of the customer and market* Market segmentation and its strategic implications* The business office of customers service and featurePreviously market was based on Mass marketing theory where one product was sold to all customer s. Nowadays is used Targeted marketing where company aims on particular market segment and provide product or service only for this segment. Market segmentation can deliver more opportunities to strategy* Particular segments can be more productive than others* Some segments can have less competitors that can provide competitive advantage* Some segments can have higher growing rate.(Lynch, p107-108, 2010)Analysis of resources and capabilitiesAnalysis of resources and capabilities gives not only opportunity to look how resources provide competitive advantage but also help understand two important things* How resources can provide higher profit and better service* Which resources provide competitive advantage and how they can they be improved all time.There are two way that goes interdependent Value added and Sustainable competitive advantage (Figure 8).Path of resource analysis (Lynch, p119, 2010)Resources and CapabilitiesResources and capabilities analysis aim is to pick out where is value added resources and explore what resources deliver competitive advantage to company. There are four questions need to be addressed to company with regard to resources and competency analysis (Lynch, p122, 2010)1. What large-hearted of resources and capabilities company own?2. Why organisation have these resources?3. Why they are important and what advantage they deliver to company?4. How they can be improved?Figure 9 Sequence of resources and capabilities analysis (Lynch, p122, 2010)Analysis of resources and capabilities starts with full range analysis of resources. It is hard because of some resources are hard to measure. Resources and capabilities can be divided in three categories (Lynch, p123, 2010) Tangible resources Are physical resources that contribute to companies value added. These can be modern equipment, location, etc. Intangible resources Resources that have no physical presence. It can be companies recognizable brand name, culture, skills level etc. Organ isational capabilities Such resources as management or leadership that manage tangible and intangible resources.Value addedThe role of resources in company is to add value and gain profit. The value adding process shown in Figure 10 and can be defined as the loss between product output price and the costs of input.Figure 10. tag on Value process (Lynch, p130, 2010)The Value chainThe value chain is a value of all activities that is linked with functional parts. Each part makes share in value add process. Company perform two types of natural action that add value to product or service Primary activities and weather activities. Primary is activities that process itself. Support activities are performed by management and forgiving resources. Porter designed companys value chain process that is shown in Figure 11. Where margin is difference between Total Value and Cost of performanceFigure 11. The value chain (Lynch, p132, 2010)The primary activities add value to company by its ow n way and they are(Lynch, p132-133, 2010) Inbound logistics The areas that related to receiving raw materials and goods from suppliers, storing them public treasury they will be required, moving and carrying within company. Operations The production area where products or services being produced. Outbound logistics The distribution of final product to customers. It is about transportation, warehousing, wrapping etc. Marketing and sales Analysis of customers need and wants and deliver to customers information about what product or service company offer. Service It is about before product selling pre installation or after selling service.The support activities Procurement The person or surgical incision that is responsible for purchasing raw materials or goods. The goods need to be purchased for as low as possible price and highest quality. Technology development The important are that need to be updated all the time. Human resource management Training, recruitment, manage ment improvement, employees motivation is important for companies success. Firm infrastructure Background readying and control of system.The value systemEvery company have own value chain and at the same time belong to childlike system that involve supply and distribution chain and customers chain. The competitive advantage can deliver suppliers that supply better goods to you or else than rival organisations. The value chain need to be evaluated and improved.Sources of competitive advantage (Lynch, p147, 2010)* Differentiation The development of exclusive feature or service that could appeal particular market.* Low costs Development of low cost product or service can attract more customers.* Niche marketing Concentration on particular market and distinguish and provide all necessary to appeal customers from this market.* High performance or technology Improved performance and customers needs satisfaction better than competitors will provide growth in the market share. Qual ity fork out quality that competitors not able to match.* Service Provide service that competitors not able to match.* Vertical integration The backward learnedness of raw material suppliers can increate competitive advantage.* Synergy The combination a parts of business that together could deliver better result success and profit than separate.* Culture leadership and style of an organisation The way how company is organised and managed. The good managed company will lead to employees satisfaction and improve their attitude to company. It will improve service, quality and deliver good environment for innovation.Resource based sustainable competitive advantageThere are seven resource elements that can deliver sustainable competitive advantage Prior or acquired resources Easier to create value on already open to company strengths rather than start from beginning. Innovative capability The innovation is important because it can deliver competitive advantage and improve entit y. Being genuinely competitive Identify resources strength and opportunity is not enough because they need to be comparatively better than competitors as well. Sustainability Resources are more competitive if they dont have and cannot be substituted. Appropriability Resources must deliver success only to various(prenominal) company, but not shared among others. Durability Good resources should last as long as possible. There is no condition to identify a competitive resources if they are not sustainable. Imitiability Resources should be hard to imitate.Defined resources need to be classified in hierarchy of resources (Figure 12) by their importance and delivered competitive advantage.Figure 12 Hierarchy of resources (Lynch, p151, 2010)Improving competitive advantageThere are three methods how resources and capabilities can be improved (Lynch, p158-160, 2010)* Benchmarking Compare go for and experience with other companies and identify what improvements can be performed. Th e compared industry can be perform another kind of job, need to be copied only companies principles of operation.* Leveraging act upon companies resources fully. That method can be subdivided in 5 prescriptive routes1. Concentration Focusing companys resources on the key objectives.2. Conservation Exploit every resource or aspect available to company.3. Accumulation Evaluate fully resources of company and use it where purloin.4. Complementarity Analyse resources with an aim to combine them. new(a) combination can deliver competitive advantage.5. Recovery Make sure that all resources generate produce as quickly as possible.* Upgrading resources The resource analysis can show that an organisation is losing its competitive advantage, so resources and technologies need to upgraded.Vision, Mission and objective of the company.Strategy purpose is explored by established mission and objectives of company. To identify mission and objective need to be evaluated why company exist an d how value adding can be generated? Additionally need to be explored companys raft based on opportunities and how it can be evaluated.The purpose of the organisationThe purposes of organisation need to be defined clearly otherwise it will be hard to establish proper strategy. To define purpose more clearly need to be considered six questions (Lynch, p221-226, 2010)1. What is our activity and what should it be? Need to be considered the area of activity is it business or non-profit organisation? Evaluate what company is focused on should company concentrate on the purpose or it can be liberal? Do company focuses on profit or diversifying? That issue can be defined broad or narrow. Usually strategists define purposes based on the competitive resources of company.2. What kind of organisation do we wish to be? The company usually chose one of two areaso Culture and style Organisations chose this area based on previous experience and developed history.o Challenges to be posed to me mbers of the organisation.3. What is relative importance of shareholders and stakeholders? Some companies purpose is to satisfy shareholders wealth.4. Do we want to grow organisation? Is company growth is included in purpose or it should stay the same size?5. What is our relationship with our immediate environment and with cabaret in general? The purpose need to be considered with environment within which company perform. In immediate environment need to be presume such factors as turbulence, competition etc. Society in general is about pressures that influence company.6. How do we bring all these consideration together? The summary of purposes need to be stated in few sentences that will specifically describe.Vision for the futureIt is imagination of company that stakeholders, shareholders or have would like to see it after a period of time. There are two views on the values that need to be explored to develop a strategy* The irrelevance of strategic vision For approaching shor t-term goals strategic vision can be not performed.* The value of strategic vision Vision is a challenging and imaginative picture of the future role and objectives of an organisation, significantly going beyond its current environment and competitive position (Lynch, p227, 2010). There are a lot of reasons to develop a strategic vision and most important is that the vision is going far in future than organisation is and help to develop purposes how to get there. New vision can help to develop mission and objectives.The missionThe mission of an organisation outlines the broad directions that it should and will follow and briefly summarises the reasoning and value that lie behind it (Lynch, p236, 2010). The mission need to be defined based on previously explored purposes. In prescriptive strategy mission is set to be realised in next few years. The role of mission is to develop direction which company will follow and try to realise. There are five elements of the mission statement that need to be explored and chosen appropriate1. Explore the nature of the company. In this case can be asked such questions as What business are company in? and What is desired business for company?2. The mission should be developed from customers point of view rather than companys.3. The mission should show the basic values and beliefs of the company.4. The elements of sustainable competitive advantages need to be shown in the mission.5. The mission need to show the particular reason for its choice to realise.The objectivesObjectives are the aims that need to be realised to implement the mission. This process cover what and when is need to be done. In most cases objectives should be quantified and measurable, but sometimes such objectives as ethic, employee or customer satisfaction is hard to measure. Company should apply any measurements to hard measurable objectives with an aim to get a feedback how successfully they implemented. Usually companies set objectives in two areas1. monetary objectives Such as profit, cash flow, earnings per share etc.2. Strategic objectives Such as customer satisfaction, market share, product quality etc.(Lynch, p242, 2010).Strategy options developmentWhen the purpose of company is defined need to develop a strategy options how to achieve it. After options development need to chose more suitable and that will bring advantage.SWOT analysisAs a starting point of strategy options development can be summarising current position using SWOT analysis. SWOT is analysis that helps to find companys internal Strengths and Weaknesses, and external Op