7001 Managing Strategy Operations and Partnerships Assignment Sample 2024
3a: A critical analysis of the industry environment
| Environmental Factor | Challenge(s) pertinent to the industry | Impact |
| Political | Growing political issues and Brexit issues are considered two of the major issues that Wincanton face while operating its business in the UK. It decreases the business potentiality for the organisation. | The corporate tax rate in the UK stands around 25% and the inflation rate in the country is also growing at a rate of 6.4% making it difficult for the organisation to operate their business in the UK (Trading Economics, 2022). The growing political challenges turned out to make it difficult for Wincanton to operate their business in the UK. The rising cost of operations also increases the business challenges for the firm. |
| Economic | Slowing the GDP growth rate and decreasing FDI investment in the country has decreased the opportunity for the organisation to decrease their capability. Poor economic condition also makes it challenging for the firm to expand its business in different parts of the world. | The slow growth of the economy makes it tough for the organisation to sustain their business as a result of which decreases the ability of the organisation to keep their business sustainable and profitable (Trading Economics, 2022). Decreasing FDI investment has also made it challenging for the organisation to increase its business and earn profitability. |
| Technological | Technological challenges that the firm is facing are a lack of funding and support in terms of developing new technology. Poor technological growth also reduces organisational effectiveness and productivity. | Lack of technological development also makes it challenging for the organisation to grow their business. Failing to implement advanced analytical technology also makes it challenging for the organisation to scale up their business (Gov, 2022). Failing to implement technology also makes it difficult for the organisation to eliminate waste and maintain productivity. |
| Socio-cultural | Social challenges that are being faced by the organisation comprises of changing nature of the people failing the firms to maintain positive relationship with the people. The changing nature of the business also makes it difficult for the firm to grow relationships and contribute to the firm’s development. | Social factors turn out to be challenging aspects as failing to maintain positive customer relationships increases the difficulty for the organisation to satisfy the growing needs of the customers (Statista, 2023). Failing to meet the social needs of the customers also decreases the ability to retain the trust and loyalty of the customers. |
| Environmental | Poor environmental standards for Wincanton also decrease the ability of the organisation to achieve sustainability as a result of which it decreases the reputation of the organisation. | Wincanton while operating their business in the UK also needs to follow the Environmental Protection Act 1990 in terms of maintaining sustainability Complying with environmental law helps the firm in reducing environmental concerns (Legislation, 2022). |
| Legal | Failing to maintain employee safety and standards also fails to protect the personal information of the customers. Legal issues turn out to be challenging for the firm to maintain stability in the business. | Wincanton’s failing to maintain legal laws turns out to be difficult for the organisation in growing its operations and facing the loss of business opportunities. Legal laws such as HSWA 1974 are being maintained to offer employees safety and security that guarantee them safe working environments (Hse, 2023). |
VRIO Analysis (Budiharso et al. 2022):
| Resource/Capability | Value | Rarity | Inimitability | Organization |
| Extensive global network | YES | YES | YES | YES |
| State-of-the-art technology | YES | NO | ||
| Experienced and skilled workforce | YES | YES | YES | YES |
| Strong financial resources | YES | NO |
3b: An evaluation of the industry itself
| Porter’s Force | Strength | Justification/Reasons |
| Bargaining Power of Suppliers | No
The bargaining power of suppliers is low because of Wincaton’s relationship with other suppliers. |
Justification: Suppliers in the logistics industry can have a moderate to high level of bargaining power because there are several suppliers of transportation, warehousing, and other logistical services (Budiharso et al. 2022). However, certain specialized services or unique resources may give some suppliers higher bargaining power. Additionally, if there are limited alternative suppliers, their power may increase. |
| Bargaining Power of Buyers | No
The services that are being offered by Wincanton are not being offered by any other organisations. |
Justification: Buyers (clients) in the logistics industry, such as retailers, manufacturers, and e-commerce companies, often have multiple options for logistics service providers. This availability of choices gives them a moderate to high level of bargaining power as they can negotiate prices and service terms. Moreover, the logistics services offered are often critical for clients, increasing their negotiating position (Chong 2023). |
| Threat of New Entrants | Yes
Inadequate resources, experiences and financial capital. |
Justification: The logistics industry can have significant barriers to entry, such as high initial investments in infrastructure, fleets, and technology. Existing companies often benefit from economies of scale and established networks, making it difficult for new entrants to compete effectively. However, in some specialized niches or local markets, new entrants might find opportunities (Kuranovič 2022). |
| Threat of Substitutes | Yes
Substitute holds high power because of the availability of local printing and designing companies. |
Justification: The threat of substitutes in the logistics industry is generally low. Once a logistical system is set up and running efficiently, it is challenging to find direct substitutes that can provide the same level of service and cost-effectiveness (Zhao 2023). While technological advancements may introduce some new options, the overall threat remains low. |
| Competitive Rivalry | Yes
Growing competition for the organisation decreases the revenue capability of the establishment. |
Justification: The logistics industry is highly competitive, with many companies vying for market share. Low switching costs for customers and the availability of numerous logistics service providers intensify competition. The industry also experiences price pressures and innovation-driven competition, which further increases the intensity of rivalry among existing players (Zhuang et al. 2023). |
| Complementors | High | Complementors play a critical role in the logistics industry by offering products and services that enhance the value and efficiency of logistics operations. The strength of complementors in the industry is high, as they bring innovation, technology, and additional services that can differentiate logistics companies and improve their overall competitiveness. |
Porter’s five forces is a framework used to analyze the competitive environment in which a business operates. When applied to logistics industry competitions, it helps identify key driving forces.
The logistics industry offers low barriers to entry, making it simple for new companies to enter the market. Unfortunately, however, high capital requirements associated with infrastructure and technology may make it challenging for these newcomers to compete against established competitors.
Logistics buyers tend to have low concentration, as numerous small and midsized businesses need to ship products. Switching costs for buyers are low as switching providers is straightforward.
Logistics suppliers tend to have low supplier concentration, as many small and midsized suppliers are present in this industry. Furthermore, switching costs are low for suppliers in this field because customer switching can occur easily.
Switching costs are high for buyers and suppliers in the logistics industry because it is challenging to change providers; however, switching costs are low given how easily switching providers is. Low barriers to entry create intense competitive rivalry in the logistics industry; however, high switching costs for buyers and suppliers can reduce such rivalry.
Activity 3 References:
Birru, A.C., Sudarmiatin, S. and Hermawan, A., 2022. Competitive strategies in the lodging service sector: Five Porter analyses and case study SWOT analysis. Journal of Business and Management Review, 3(1), pp.001-017.
Budiharso, T., Makruf, I. and Mujahid, I., 2022. Porter’s Five Forces: Evaluating Education Management Practices in the Postgraduate Program of UIN RM Said Surakarta, Indonesia. Journal of Social Studies Education Research, 13(1), pp.164-192.
Chong, 2023. R.S.Y., PEST ANALYSIS OF THE DIRECT SELLING INDUSTRY IN CHINA.
Kuranovič, V., 2022, September. The Role of East Asia in Current Issues Focus on Value Chain Management of Logistics and Transport Market. In International Conference TRANSBALTICA: Transportation Science and Technology (pp. 510-517). Cham: Springer International Publishing.
Zhao, J., 2023. Future development forecast and analysis of the US cold chain logistics industry.
Zhuang, Z., Zhang, W. and Gu, Y., 2022. Analysis and Countermeasures of Inland Shipping Logistics in Fujian Province. In Advances in Artificial Systems for Medicine and Education V (pp. 233-243). Springer International Publishing.
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