Substitutes Of The Product And Services

Published Date: 02 Nov 2017

In accumulation to SWOT analysis, if I were asked to complete an in profundity environmental scan; I would conduct the following:

A) McKinsey 7S model: To know about a mixture of internal factors

B) PEST analysis: To know about a mixture of external factors.

C) Porter’s five competitive forces: They give support to in analyzing a mixture of factors in

business competition.

McKinsey 7S model:

It gives a range of internal factors including hard and soft essentials. They outcome in the success of the organization if align properly.

McKinsey 7S framework was developed in 1980 by Tom Peters and Robert Waterman. The 7S model can be used in situations where arrangement perspective is helpful. It can be functional to the essentials of a team as well as a project. It consists of seven interdependent factors classified in to hard and soft elements (Peters, 1980):

Hard elements:

1. Strategy;

The incorporated vision and direction of the corporation as well as the manner in which it communicates and implements that vision and direction.

  2. Structure;

The structure of the organisational plan and interconnections between positions in the organisational chain of command.

  3. Systems;

The procedures and schedule processes necessary to perform the work , together with the manners an information moves through the organisation.

Soft elements:

4. Staff;

Personnel categories contained by the organisation.

 5. Style;

The categorization of the ways key managers situate priorities and perform in order to accomplish the organisation's goals.

 6. Skill;

Distinctive capabilities by Organization.

7. Shared Values;

Core beliefs primary the organisation's existence and its prospect of its members.

The internal factors of the organization are aligned for the success of the organization. The performance of the company can be improved and the influence of the changes in the future can be analyze. (Peters, 1980)

PEST analysis:

It is a strategic instrument that enables an organization to observe the important factors in an industry. These factors have an effect on the industry and influence the firms running in that sector. PEST is an ellipsis for political, economic, social and technological analysis.

Political factors; Includes various kinds of regulations and laws, legislations, global issues regarding government and politics, trades and tariffs regarding business.

Economic factors; These factors encompass economic trends, exchange rates, various kinds of costs, taxes, stock markets and economic collision of political and social changes.

Social factors; These engage the demographic explanation of customers and population, living standards, lifestyle, cultures, media, trends and attitudes in a society.

Technological factors: The influence of technological changes, Innovations, advances, new inventions, recycling and research. (Nishadha, 2012)

PEST analysis is carried out which helps in considerate the environment of an organization. It is incredibly useful for strategic planning of an organization.

Advantages of pest analysis:

It mainly helps an organization to recognize the business opportunities it has and to capitalize on them. It makes a business aware of the threats that may occur. It provides a better understanding of the business environment in a wide scope scanning. It appreciates strategic planning and management and improves strategic thinking and shapes the projects have chances to be successful.

Porter’s structural analysis of competitive forces:

Industry competition holds an undeviating effect on the competitive strategies of the organization. The possibility of analysis of competition has been widened by these five forces given by Porter. These five forces are as follows:

New entrants threat

Supplier’s power

Buyer’s power of bargaining

Substitutes of the product and Services

Existing Competitor’s rivalry.

The most significant thing is new entrant’s entry in to the running market. This has a enormous cause on the shares of already existing companies as they may be well operational with extra production capacity and methods of modernization. New entrants carry on their costs near to the ground to capture massive market share. As rapidly as the product is accepted by the customers the costs to be increased automatically. Thus, the entrants test the efficiency and effectiveness of the existing firms.

Supplier’s power frequently influences the industry competition. When there are huge number of buyers and few numbers of sellers, then the suppliers will have the higher hand over the buyers and may perhaps take advantage by lowering the quality and raising the prices.

Buyer’s here are the accessible firms. The existing firms attempt to bargain from suppliers for lowering along costs, good quality and higher levels of service. Thus the bargaining power of customers i.e. existing firms also pressure the competition in an industry.

Substitute supplies are those goods that can be used instead of the product. For example, people with more health consciousness use substitutes of sugar like artificial sweeteners instead of sugar.

Competitor’s rivalry is a rivalry which arises owing to competitor’s action or due to the hard efforts of a company to improve its market position.

Advantage with porters five forces analysis is that it makes a firm conscious of the competition in an industry and how the strategic planning of a firm influences to others. In the combination of different spirited strategies in an industry, a firm can grow a competitive advantage. It enables novel entrants to be familiar with the entrance barriers and the anticipated counter attack by the existing firms. (Porter, 2008)

Question: You have been asked to secure information from your customers for

inclusion in your plan. You have decided to do a survey to get their

input. How will you complete this process? How will you utilize

the information received? Provide information as to what process and

the steps you will take to get the best information possible.

Customer evaluation is an important technique to assess the level of performance of the organization. If provides a obvious suggestion of how the customers perceive the products and services of the organization. Opinions from the customers form a very precious asset to the organization generous an insight into the way organization has to respond. It also directs the improvement to be prepared in the products and services. As the organizational success depends on its capability to meet the needs of customers, the strategy should always aim in beyond the expectations of the customers.

Customer assessment be able to carried out in the following ways:

- Interviews

- Questionnaires/Surveys

- Focus groups

Nearly everyone of the companies previously have the existing assessment and response tools. If they are not obtainable, innovative methodologies that modify the organization have to be developed with the help of strategic management techniques. When it comes to customer assessment, surveys appear to be one of the most reliable and effective tool. The advantages of that are numerous. It is less expensive, and results are more generalist. The result from a survey is a direct reflection of customer's opinions. Survey usually comprise of questionnaire, the answers of customer to these questions provide a guidance to take important strategic decisions. This help to improve the product in the future. Also the managers will have idea of where is the problem, like product, customer service, maintenance service etc.

An example of survey questionnaire can be as follows.

(A) How did you find our product ?

- Excellent

- Good

- Average

- Not satisfied

There are many systems available to process or analyze the collected data from surveys. Examples of these systems can be MIS- Management Information System, DBMS- Database Management System. DSS- Decision Support System.

According to the analyzed information, the strategic plans can be generated to make necessary changes in the product. Assessment and feedback systems thus make the organization an open system where the feedback from the output helps to make the necessary changes in the final product.

Part 2 – Provide 10 concepts, issues, philosophies, or practices in the areas of strategic planning that you can utilize in your workplace. Name the aspect, describe it, and explain the implication for your workplace. This does not have to be in essay form but can be in bullet form.

SWOT: SWOT analysis is a well structured method to evaluate strengths, weaknesses, opportunities and threats involved in a business venture or in a plan. It can also be carried out for any product, person, place or industry. It involves evaluations of external and internal factors regarding plan or venture.

PEST: PEST stands for Political, Economical, Social and Technological Analysis. It is used to examine and evaluate macro-environmental factors used in component of environmental scanning of Strategic management. The growing interest of environmental or economical factors has given rise to green business.

Porter’s Competitive Forces: Michael Porter has given five forces that are really useful in determination of the competitive nature of industry.

These five forces are as follows:

New entrants threat, Supplier’s power, Buyer’s power, Substitutes of the product and Competitor’s rivalry.

Porter’s five force analysis enables firm to understand business strategy development and industry analysis. These five forces, according to Porter, refer to competition from external sources. The remainders are the internal threats. This five force analysis is just a part of Complete Porters strategic model. The others are value chain and generic strategies.

Brain Storming: Brain storming is an individual or group process of making decisions or conclusions. Here a group of people are given a topic to discuss on and new ideas are gathered with an intension of generation of an outcome. It’s an important part in strategic planning process.

Change management: Change management id a process of bringing the firm from its current situation to its desired situation. Its considered to be a prerequisite for identifying and rectifying the mistakes of firm and also important for the continuous improvement of the organization. It is an integral organizational process aimed at helping the stakeholders understand and accept the change in their business environment.

Motivation: Motivation is a very basic approach adopted by leaders of a firm to get the best performance out of workers. This generally involves reward and recognition which may be tangible or intangible. They bring a sense of satisfaction and confidence among the workers.

Organizational Culture: Organizational culture refers to collective behaviors of the employees in an organization. The organizational culture includes norms, vision, values, working language, system, beliefs etc. Organizational culture affects the working environment and how the employees behave and interact with each others, clients and stake holders. Hence it is an important element in strategic planning as well.

SMART Goals: SMART is a mnemonic used when people set their goals. They are the key performance indicators. The letters in the term SMART stand for specific, measurable, attainable, relevant and time-sensitive

Leadership: Effective leadership is of fundamental importance in strategic management. In strategic management, leaders design strategies, make decisions and motivate the employees. They often use the Vision and Mission statements to inspire the employees and to bring best out of them to attain their goals. Effective leadership is always open to feedback that is healthy and in benefits of organization.

Stakeholder Analysis: Stakeholder analysis is a process of identifying the groups or individuals that are likely to be affected or likely to affect a proposed action, and then sorting them according to their responses. This analysis helps the organization to understand the interests of the stakeholders, and hence accordingly changes can be made in the future plan or the existing plan can be evaluated.