Assignment Sample on Strategy Analysis and Proposal Development
Introduction
The present report is based upon Thermax Limited which is an engineering company founded in 1966 by A.S. Bhathena and later is taken over by his son in law Rohinton D. Agra. Company went public in 1995 with revenue of 55.02 billion in Indian rupees. The products which the company deal with is integrated products in areas of heating, cooling, water and waste management, air pollution control and so on (Agnihotri and Bhattacharya, 2017). In this report, the discussion is based upon the issues which are faced by Thermax ltd and the factors which result in the success of such issues. Further, it determines the various strategic option which addresses at least three issues of the company. The discussion also covers the matter of stakeholders group which adversely affected by the proposal. At last proposal and strategic directions are discussed in every stage to achieve the objective is better aspects.
Main Body
Competitive advantages of Thermax ltd by using such strategy and issues pertinent to Thermax ltd in the light of success factors
Competitive advantages refer to delivering quality and standard products to its customer in comparison to its revivals.The following factors which can result in competitive advantages to the company are that firstly is of quality as it is necessary for the company that the raw materials which they are using to produce such product must be authentic and durable (Alhamidet.al. 2020). The company is dealing in securing the environment from pollution and excessive waste, thus it is necessary to adapt the key performance indicator in respect of measuring the inventories and cost of products in the market. Another competitive advantage is gained through the factor of pricing as the company adapt premium pricing in which they charge a higher price to maintain the quality of the product (Ali et.al. 2019). To retain the interest of the customer, authentic service is a must, thus the company had to provide valuable service to their customer timely in respect of refurnishing their products for a long period.
Another advantage is gained through highly skilled labour. As it results in bringing innovationand creativity in the business and also the products are generated with high quality and standards. Technology plays the important role in the competitive advantages and thus by adapting new or proprietary technology results in gaining long term benefits in the business (Ayou and Coronas, 2020). Geographic location is important in the business and thus Thermax ltd places their business insuch areas where they can reduce pollution which is generated from products and also recycle the waste products in a better manner.
Issues pertinent to Thermax Ltd
The strategy which the company adopted in respect of maintaining quality, innovative services, products pricing and so on, theissues which are raised in component one are lesser control on manpower. The major impact which the company faced in this issue is due to covid 19 situation (Chakrabarti et.al. 2018). As they feel restricted to control on every physicalstore of the company to examine the working of the manpower and also the targets which they set for the workers are achieved or not.
Another issue that later resulting in successfactors is the customer experiences towards the products which they installed in their business. By recruiting an efficient team to handle the customer queries in the business and also to examine the changes in climate results in gaining wider benefits (Choudhury et.al. 2019). Thus, it is necessary to handle the R&D team and also provide adequate training to handle customer queries in the right way.
Thermax Ltd is engaged with different culture employees at the workplace and thus issues raised regarding managing the different employees at the workplace in manner. The successfactors of the company are raised if all the employees worked in the team and bring creative and innovative ideas to the workplace (CODE, 2018). As in the cooling and heating business, it is necessary to secure the environment from hazardous substances and thus, it resultsin motivating the team to bring innovative ideas to protect the environment.
The company only succeeds if they use advanced technology to grab the working of the competitors and identify the demanded if the customer in their business. As most of the company which are planning to underground their business, prefer such products which can control heat and maintain cooling (Elgandelwaret.al. 2020). Thus, if the company does not grab this opportunity through the use of technology, then it results in affecting the success of the company.
The success of the company depends upon employee engagement and company polices under employment law. Thus, the issues which the company faced is treating every person equally in the workplace and also offer equal wages to the person if they are attaining the same post (Eveloy and Ayou, 2019). Various policies are designed by the company in respect of protecting employees from working in hazardous places such as compensation amount in case of death of any employees in premises, insurance policies, Giving compensation in case of partial or complete disability and so on.
Thus, the above are considered as the issues pertinent to Thermax Ltd which affects the success factors as discussed in component 1.
Applying strategic option which are addressing three major issues in Thermax Ltd
By applying the strategic option that can address at least three major issues which are undertaking in Thermax ltd is that managing employees, price and service to the customers.
In respect of managing employees in the business, HR applies the Pareto Analysis in which they analyse the multiple choices which are available through recruiting the employees from a different culture (Strategic Options, 2021). Once the multiple choices are figured out, the employees are segregated in a particular manner so that they can attain the task as a team and also interact with each other to bring innovation to the existing products.
In the pricing issues, the company adapt porter’s generic strategy in which they suggested three strategic option such as cost leadership, differentiation and focus. In the case of cost leadership, the company captures the bigger pie of the market share. It can be done by lowering the cost of the products or increasing profits by maintaining average and competitive prices (Faruque, 2019). Thus, it results in retaining the position of the company in the market by offering quality products at reasonable pricing. By applying this strategy, it results in setting the goal in the company to offer quality products with less pricing.
In case of services, the company adapt the restructuring strategy in which the company chose to restructure the unprofitable product line or process to provide better services to customers. By applying this option, it results in stopping the services which are at the end or not able to continues in near future (Gupta and Jain, 2020). Thus, results in enhancing the overall status of the company with the adequate benefits gained through the process of saving money and resources.
Strategic Proposal:
In respect of examining the strategic option to overcome the issues which are faced by the company, the following steps are designed under the strategic proposal which identifies as:
Company Description: Thermax is a multinationals energy & environmental engineering company based in India & Britain. Company initially started their business as baby boilers to cater to the stratum required by hospitals (Joshi and Bhatia, 2019). After having the success of the products, they started innovating their products in the market through offering services such as eco-friendly environment, less wastage in resources, water recycling, cooling from waste heat, waste heat energy, emission control and solar energy.
Mission, Vision and value statements: The mission of the company is to reduce waste in the business and also to minimize the cost of the products by dealing in more recycling of the exiting resources of the company. The vision is to fulfil the mission by setting the benchmark and key performances indicator tomeasure the company working with the set goal to be achieved within the stipulated period (Kaldehi et.al. 2017). In this, the goal is set to minimize pricing and offering quality services to customers. Value is gainedthrough managing the different culture of employees in the business and also enhances company integrity by offering valuable services to customers.
Strategic analysis: It is determined through using Porter’s generic strategy in which the company main issues are segregated intothree segments such as cost leadership, differentiation and focus. Thus, by this strategy, the issues such as employee engagement, pricing and services can be tackle in an easier manner (Kale, 2021).
Strategies and Tactics: Through the cost leadership strategy, it helps in setting the penetration pricing in which the low price is set to attract the customer and later it charges high depend upon the market competitors. In this, the tactics apply by recruiting an efficient team in R&D to access the market by using advanced technology (Kamble et.al. 2019). In the case of focus strategy, the focus is done upon the customer regarding the requirement which they needed in their business. It can be done by setting the benchmark in the business by achieving the targets within a particular time limit.
Action plan: To identify the working of all the aspects which the company undertaking to overcome the issues such as employee engagement, service and pricing, the timeline is set to accomplish all the objective (Karnozov, 2019). Such as 1 month period is set to recruit an effective team to handle the R&D department. In the case of pricing, the sales and marketing team is instructed to view the market changes and accordingly set reports (Kapadia and Sarupria, 2017). It requires two months time period. In the case of employee engagement, they had to train the leader’sregardingattending employees in a particular manner. This whole planning requires one week time period to motivate employees to work as a team.
Budget and Operating Plans:
The budgets are set as:
| Recruiting efficient employees | 35000 |
| Recruiting team | 50000 |
| Technology | 25000 |
| Stationary | 5000 |
| Organising outside training session | 7000 |
Monitoring and Evaluation: To monitor the overallworking of their strategy, the benchmark is set for the HR manager to handle the employees in the right manner. In the case of increasing profits and improving services in the company, key performance indicators are used to monitor the working of every employee at the workplace. It also helps in identifying the criteria which they used to handle the team (Kumar and Goswami, 2019).
Communication of plan: To communicate the plan to key stakeholder, it is done through organising the meeting or using the e-mail procedure to provide detailed information about the changes to be undertaken in the company (Parthasarathy et.al. 2017).
Communicating with strategic Plan:
Firstly the planning is communicated to the board of directors who hold the decision about strategic planning and the chances of success in the market. Secondly to its employee who holds the basic right to know about the changes undertaking in the internal working of the company (Patel et.al. 2017). The third is the investors who invested money in the business in respect of getting good returns.
Stakeholder group which adversely affected by proposal
Stakeholder who can be adversely affected by this proposal is that
| Board of Directors | Board set certainobjectives for the benefits of the company and if any changes in recommended in the business, then they’re planning is also affected (Patel et.al. 2017). By this strategic proposal, there interest affected in respect of establishing new goals and objectives in the business and also had to find resources and funds to support such planning. |
| Employees | They are affected in respect of starting from the new rules and the work which they learned is no more useful. As they are bound with the new techniques and rules which is designed by leaders to work in the set direction (Paul et.al. 2017). |
| Investors | Investors are affected in respect of not relying on the project completely as they invest money in the projects but if changes occur then it also results in risk in the initial projects to get a good return (Pillai et.al. 2021). |
| Customers | They prefer Thermax ltd in respect of providing good quality at a cheaper price but if they find new companies policies in respect of preferring the product or service and ifitis not suitable, then it results in getting less retention. |
| Government | The government mainly approve the companies working byviewing the changes which are undertaking for securing the environment but in respect of changing the working polices, it also results in utilizing the resources more largely. Thus, it affects the country economy in respect of providing larger resources but getting less return in form of CSR. Through the strategic proposal, the impact raised upon the government concerning changes in pricing and services policies which requires more transportation cost and affecting the environment. |
Preferred strategic direction in respect of explaining each stage and their strong points of choosing such a proposal:
Strategic direction refers to the foundational ideas which provide consistency of strategy over time. Thus, to defend the proposal, the strategic direction of Thermax Ltd is segregated into seven types such as:
Mission: In respect of overcoming the issues, it sets the company mission to achieve the goal within the set time limit. Such as company mission is to improve the quality and services in the market. Thus, concerning achieving this target, the company set the mission to improve the technology and recruit an efficient person to handle the researchand development department to gain customer interest in a long way.
Vision: It is necessary to accomplish the company mission in the right manner. In this, the future of the company is paint and also its stability to retain in the market. In the case of Thermax Ltd, the vision they setis to reduce pollution in the country, recycling waste, or generate heat from the recycling products (Pramanik and Singh, 2021). Thus, in this setting premiumpricing is useful as it firstly helps in attracting customer towards the products and if they retained for a longer time, company than plan to increases the price by examining the competitors marketing tactics to attract customer towards the products.
Culture:Effective culture set the direction of the company in respect of increasing goodwill and brand image in the market. Througheffective reputation, it gets high skilled labour and efficient knowledgeable person to handle the internal matter in the right manner (Shirazi, 2017). It is important in the proposal, as through effective communication skills, it builds a strong relationship between the employee and employer and also gets higher productivity in the business.
Ideology: In this, the ideas and values are focused concerning social, economic, political and moral directions. Thermax Ltd is robust in this direction as it improves the policies of the company by working as per the demand raised by the customer and also contributing a small number of profits to society (Shirazi et.al. 2017).Through these aspects, it increases the company value in respect of getting more investors towards the business to invest in certain projects and also the suppliers who supply raw materials with the amended pricing which is suitable for the business.
Principles: It is useful in the business as certain principles are set by the company regarding securing the company information or not disclosing any customer details without their consent. As in respect of any changes in company working policies, it is the priority of the company to discuss it with their employees or share the reason for major changes undertaking in the company (Shirazi et.al. 2018). It results in gaining benefits in respect to getting higher retention of employeesand also they accomplished the task with facing less risk to get better results.
Values: It is considered to keep the things rights even the situationreflects the wrong aspects. Innovation is necessary for the business and also the major demand by the customer to get new things which are different from others (Urbanucciet.al. 2018). Thus, if the company had fewer earnings and revenue to make innovation than they do not work against the company policies or rules to bring creativity in business. Innovation can be done in future if the company had enough revenue to make its integrity in better aspects.
Grand Strategy: It lies in respect to the long term sustainability of the company in near future. As rather than using pulse jet bag Filter in the company instead of using AI and AR it will result in longer-termbenefits in the business. AI results in reducing the worker’s efforts in producing harmful products and improve the service quality to attract more customer towards the business (Thermax’s digital strategy and the initiatives lined-up, 2021). AR is done to gather information about the real-time working and needs of the customer for the business performance betterment. Thus, in respect of reducing emission gas helps in promoting good health in the society and bring more satisfied customer that is loyal andhonest towards the Thermax business growth.
Conclusion
From the above study, the report concludes with the study of Thermax Ltd who is involved in saving energy and the environment of the country. In this the issues which the company focused in manpower, advanced technology, improving services to customers, handling different culture of employees at work palace in the right manner. Later the matter concludes with the various strategy used by the company as porter’s generic strategy, Pareto Analysis and restructuring strategy which manages the major issues which companyfacing to sustain in the market. The impact which the stakeholder faces such as customers, suppliers, government, board of directors and investors from the strategic proposal and operational betterment. At last, it concludedwith the managing strategy which helps in controlling the business operation and performance through managing the pricing, services and employee engagement in a better manner.
References
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Online:
Strategic Options. 2021. [Online]. Available through: <https://efinancemanagement.com/financial-analysis/strategic-options>.
Thermax Ltd (THERMAX) – Strategy, SWOT and Corporate Finance Report. 2021. [Online]. Available through: <https://store.marketline.com/report/mligm33633fsa–thermax-ltd-thermax-strategy-swot-and-corporate-finance-report/>.
Thermax’s digital strategy and the initiatives lined-up. 2021. [Online]. Available through: <https://www.expresscomputer.in/news/thermaxs-digital-strategy-and-the-initiatives-lined-up/63850/>.
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