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Strategic Business Management

Purpose

The purpose is to develop a standardized strategy that can be implemented to develop leading edge products with sustained growth and success of the company.

Themes

The success of a given business is based largely on the strategies that it follows. Innovation is definitely a valuable complement, but without implementation of a systematic and effective strategy, a long term growth is uncertain. A strategy should be made keeping in mind the following stages before the introduction of the product:

  1. Initiation Stage:

While designing the strategy, it’s inclusive to the plan that the current model of the system is thoroughly analyzed to take further steps to keep the system moving forward. This stage requires awareness of customers’ need, unique values that we offer and how the revenue can be generated.

  1. Ideation Stage:

This stage of the firm corresponds to the awareness of the needs of the customers. The products and services under the company’s name should have relevance to the customers’ demands. The quality and potentials of the products have to be in accordance.

  1. Product Development Stage:

The validity of the ideas and concepts related to the products and services, thus, become an essential aspect which should be under verification while developing the strategy. The verification includes the sustainability of products along with the potential market.

  1. Commercialization stage:

One of the very important aspects of a strategy designing is focusing on the launch of the product. An effective and coordinated launch plays an integral role to leave a good reputation and unfettered expectation of the consumers of their demands and needs.

STRATEGY

A strategy refers to a planned design to achieve a long-term ........

valuable complement, but without implementation of a systematic and effective strategy, a long term growth is uncertain. A strategy should be made keeping in mind the following stages before the introduction of the product:

  1. Initiation Stage:

While designing the strategy, it’s inclusive to the plan that the current model of the system is thoroughly analyzed to take further steps to keep the system moving forward. This stage requires awareness of customers’ need, unique values that we offer and how the revenue can be generated.

  1. Ideation Stage:

This stage of the firm corresponds to the awareness of the needs of the customers. The products and services under the company’s name should have relevance to the customers’ demands. The quality and potentials of the products have to be in accordance.

  1. Product Development Stage:

The validity of the ideas and concepts related to the products and services, thus, become an essential aspect which should be under verification while developing the strategy. The verification includes the sustainability of products along with the potential market.

  1. Commercialization stage:

One of the very important aspects of a strategy designing is focusing on the launch of the product. An effective and coordinated launch plays an integral role to leave a good reputation and unfettered expectation of the consumers of their demands and needs.

STRATEGY

A strategy refers to a planned design to achieve a long-term goal. A strategy nowadays, has no single component. It is an overall plan including different tactics to meet the objectives and goals with proper description about the current state of the company with future prospects of the strategy in the marketplace. Therefore, while looking the long-term perspectives of the strategy, the components attributing to the success should include all the ‘DON’Ts’ along with the expected ‘DOs’. With the growing competitiveness and complexities in the market, a well-planned strategy serves not only in the execution of the business in the beginning, but also to sustain the growth and success throughout.

Analysis of the Company’s status:

Going through the statistics of the balance sheet of the company, it seems apparent that the company runs in an overall debt of $100,000.00 which is quite significant to sustain the company. There is considerable loss that the company is facing which should be managed by the subsequent strategy of the company concentrating on recovering previous losses along with prevention of further losses with effective plan to uplift the revenue generation so as to successfully run the company in long-term.

Following considerations are needed to be kept in mind to design an effective strategy:

  • Market and customer positioning

The first and foremost priority of the strategy is to target the right market for the products. The designing and production of the items should be done keeping in mind the section of the society for which the products have been designed. Therefore, the products correspond to the general middle class-the largest section of the market so as to maximize the reach and scope of the demands. However, as the section is too large, so will be the range and types of needs, a cumulative potential and relevance has to be considered according to the customers profile sets.

  • Advertisement and Community involvement

The reputation of the firm also plays an essential role in the consistent success of the firm. Often, the interpretation of the product has a lot to do with the reputation of the firm. In lieu of that, honest and appealing advertisements will contribute to an effective and widespread attention among the people of target community of the market.

Tools for Analysis

There are various tools considering different parameters to analyse th eoverall working and success of the company. These include SWOT analysis, Porter’s Five forces, PEST and PESTEL analysis, Value Chain analysis etc.

PEST Analysis involves looking at the Political, Economic, Social and Technological factors that directly or indirectly influence the working of the company. Our Company has a good social image while we don’t face any political influence anyways. However, the economic conditions are in no good positions to run the company with success.

  • Owing to a wide range need, a systematical workplace with hierarchical yet collaborative working departments becomes an important asset. Thus, to ensure successful and long-term run of the company, effective communication contributes majorly. This will minimize the loss considering the ever-changing requirements and demand of the customers. In such cultural atmosphere, effective communication is not a complement but integral component.
  • A stringent and rigid strategy implementation is often not a good idea when considering the alignment of the preferences and styles of the consumers. Therefore, keeping flexibility is a conscious effort to ensure sustained growth of the firm. One of the attributes of the flexibility is awareness of existing and emerging technologies to better understand the market. Thus implementation of flexible strategy will contribute to a management of product lifestyles.

 

SWOT analysis considers the strengths of the products along with the Weaknesses in the current model to find opportunities to overcome those weaknesses while taking proper care of the expected threats. This include proper research about the internal as well as external environment of the company.

 

Applications and Justification of the Strategy

The company’s vision has always been to thoroughly research and develop accordingly. Consequently, introduction of new products has been strategized to contribute to the revenue. This includes introducing ‘No Fat Milk’ as most recent product of the company.

  • No fat milk is a natural source of protein, minerals and vitamins that are essential for good health. The cost for development of this product values about $100,000. The launch of this product in the next round will give significant profit to the company. As a result, $10k will be added to the fixed costs.
  • The Lite milk is 99.9% fat-free. It is low in cholesterol with a great taste. This product has a good scope in the market with a wide range of consumers including families and health industry. Wholesalers and distributors are definite market segments for the product. The production of this product has been increased to maximum i.e. 400,000 instead of previous 300,000.
  • An important tactic is advertisement for the Dairy VAP. This advertises our products to the Dairy VAP Segment at a cost of $40,000. This advertisement will be seen by 25% of the Dairy VAP market. If the project is run now, it will be effective from this quarter, but will remain in effect for about one year.
  • One of the major step as an effect of the strategy is expansion of the production capacity for Plant 1. This project expands the entire milk processing plant. This project will take effect from this quarter, if it is run now. The projects will double the production capacity of the plant at a cost of $0.15 per unit of addition production capacity. This project provides ample opportunities to downsize the plant later as per the requirements. However, no provision of any refund of the expenditure will be guaranteed. Additionally, there will be opportunities to further expand the productions in future.

 

 

Constraints in the Strategy

While designing the strategy, several other products were also proposed, for example, development of organic full cream milk, but no-fat milk was chosen to maximize the market reach to a greater sector of the society. With the similar objective, an additional production plant is also being planned to increase the overall product production with a  aim to generate more revenue.

Consequently, financial resources have to be brought in to meet the possible outcomes of the plans. Therefore, to introduce new products, the company needs to borrow funds for the execution of the plan. A loan of $100,000 has to be taken for the same for a period of 1 year. The interest rate for the loans is fixed at the rate of 6% or $1,500 per quarter. The loan need to be paid after duration of 1 year as the revenue is generated.

If the company fails to meet the expected comeback, then there are chances that the company will suffer more loss.

However, going through the current market status, there are greater chances of success. Additionally, investing in the advertisement will contribute majorly in the expansion of the business by popularizing the products.

Thus, the strategy provides good assurance in the success of the company.

 

 

 

 

 

 

 

 

References

 

Ommani, A. R., (2011). Strengths, weaknesses, opportunities and threats (SWOT) analysis for farming system businesses management: Case of wheat farmers of Shadervan District, Shoushtar Township, Iran. African Journal of Business Management  5(22),  9448-9454. 

 

Osita, I. C., Onyebuchi, R. I., & Justina, N., (2014). Organization’s stability and productivity: the role of SWOT analysis an acronym for strength, weakness, opportunities and threat. International Journal of Innovative and Applied Research  2(9), 23-32.

 

Downey, J., (2007). Strategic Analysis Tools. The Chartered Institute of Management Accountant. Topic Gateway Series. Retrieved from 

Chauhan, A. K., Kalra, K. K., Singh, R.V., & Raina, B. B., (2006).  A Study on the Economics of Milk Processing in a Dairy Plant in Haryana. Agricultural Economics Research Review 19, 399-406.

Fallon, N., (2017). SWOT Analysis: What It Is and When to Use It. Business News Daily Managing Editor. Retrieved from h

Jurevicius, O., (2013).  PEST & PESTEL Analysis. Retrieved from