SG7001 Managing Strategy Operations
Introduction
Sothema is a pharmaceutical company which is situated in Morocco. This business organisation manufactures as well as sales of medicines. The main priority of this business institution is to facilitate easy treatment of people. This is main reason why this business organisation has started to work with units related to local production. In order to achieve a competitive advantage in this country, this organisation has started to do investment continuously. Moreover, this organisation has started to collaborate with Chinese companies so that more competitive advantage can be acquired. However due to a lack of marketing strategy, this business organisation is not able to collaborate with other companies for producing mass vaccination.
2. Critical discussion on current strategy & competitive advantages of selected company
Competitive advantages
This pharmacy company Sothema is leading pharmacy services in Morocco and therefore there are different types of corporate strategies have been adopted by this brand to optimise its organisational workplaces. There are some corporate strategies developed by this brand, which can help this brand to develop its organisational activities as well as enhance its organisational activities. This brand is focusing on adopting four different types of competitive strategies, which are “strategic alliances”, “defensive strategies”, “differentiation” and “cost leadership” (Mbai et al. 2018). This pharmacy brand is using these strategies for enhancing its organisational profitability and eliminating all negative aspects for achieving competitive advantages in its operating markets.
- Cost leadership
This brand has to focus on adopting a cost leadership strategy for changing its organisational activities and achieving more valuable advantages in its organisational workplaces. As per the view of Mehra et al. (2018), adopting a cost leadership strategy has helped this pharmacy brand to increase its organisational productivity faster. Adding cost leadership strategies has supported this brand to achieve a competitive advantage in a price war. Leaders of this company are focusing on increasing its market share by eliminating their competitor and in this regards cost leadership strategy is playing a major role.
- Product differentiation
Next step adopted by this brand is product differentiation strategy, which has supported this brand to establish itself as way more attractive than its competitors than its market competitors. However, this brand is providing different types of pharmacy products to its targeted customers, which is providing this brand adds value to its customers. Hence, by providing more valuable services to its potential customers, this brand has increased brand loyalty and achieved economical advantages (Seriki & Murphy, 2019). Making product differentiation has helped this brand to generate more revenue with fewer sales, and therefore this process is also providing valuable processes and provides quality services to its targeted customers.
- Strategic alliances
This pharmacy company is also adopting strategic alliances, which is also boosting sales of this brand and therefore this strategy is also providing new opportunities to this brand in its operating markets. This strategy has also supported this brand to get instant access to its operating markets and make possible changes in its organisational activities (Tavalaei & Santalo, 2019). However, this strategy has supported this brand to adopt suitable new technology and skills, which can boost performance of this brand.
- Defensive strategies
This brand is also adopting some defensive strategies, which are also helping it to manage its organisational activities and provide more enhacive services to its potential customers. A defensive strategy also supports this brand to continue its marketing in its operating markets effectively and therefore sustain a great future of its organisational activities (Patil et al. 2020). Defensive strategies are helping Sothema to build healthy relationships with its new customers effectively and therefore achieve a great future in its organisational workplace.
Current strategies for eliminating different organisational issues in Sothema
There are three types of existing business strategies that are currently focused on & used by this selected business organisation for making positive changes in their organisational activities. A critical discussion on current existing strategies of this selected company is mentioned below:
- Product differentiation
Present pharmacy brand has adopted a product differentiation strategy, which is supporting this brand to achieve more customers from its operating markets. This brand is using a product differentiation strategy for increasing its brand loyalty and expanding its business quickly by increasing sales (Baia et al. 2020). Since it is evident from activity 2, using Kraljic Matrix, Sothema has been effectively producing differentiated product hence building partnership is a better option in product differentiation.
- Price discrimination
This brand is also working on a price discrimination strategy for increasing its sales and achieving more customers from its operating markets. Managers of this brand are customers focussed, which is a positive side, however, managers are also focusing on expanding their business quickly by increasing sales (Wolak-Tuzimek et al. 2021). For this purpose, this brand is using a price discrimination strategy to increase its sales and achieve competitive advantages in its operating markets.
- Technology-based advantage
Moreover, this brand has also technological advancements are also focused on by managers of this brand for enhancing its organisational environments and providing more benefits to its customers. Managers have focused to improve their business agility by increasing their technological advancements (Górska-Warsewicz et al. 2018). However, data security is also focused to improve by managers of this brand, which is supporting it to build effective connections with its potential customers.
Internal analysis
VRIO
| Factors | Valuable | Rare | Imitable | Organised | Competitive advantage |
| Management activities | ü | ü | · | ü | Yes |
| Relationship marketing | ü | · | ü | ü | Yes |
| Production process | · | · | ü | ü | No |
| Sustainable management | ü | · | ü | ü | Yes |
Table 1: VRIO (internal analysis)
This brand needs to focus on adopting different management activities, which can benefit this brand to achieve competitive advantages in its operating markets. Moreover, there is also a need of analysing the strengths of competitors, which can help this brand to achieve more competitive advantages and provide suitable benefits to its potential customers (de Oliveira Junior, 2022). Implementing a price-cutting strategy can help this brand to increase its organisational activities and achieve more advantages in its operating markets. This brand has to manage a good relationship with its market competitors, which can help to optimise its product’s pricing. Providing balance priced products to its customers can help this brand to achieve a competitive advantage. This brand needs to meet needs of its potential customers, which can benefit this brand to sustain its business in its operating markets. Providing high-quality products and services to its potential customers can support this brand to increase its sales and profitability.
External Competition
There are lots of new entrants in its operating markets such as “BOIRON Italia”, “Pharmaceutical Industry”, and “Pharmadep” (Apollo, 2022). Improving management activities and implementing suitable corporate strategies can assist this brand to increase its market share quickly.
Lastly, this brand needs to work on improving its production process, which can help it to produce products that are purchased by its targeted customers from outside (Mehjabeen, 2018). Moreover, meeting the needs of products that its customers are purchasing from outside markets can support this brand to achieve a competitive advantage. Since the company as found in activity 1 that quality of products are high, it has potential to expand into international market.
3. Development of Proposal
Prioritisation of organisational issues
There are some organisational issues faced by this selected brand, which is creating different challenges for this brand. Major organisational issues faced by this brand are critically discussed below:
- Employee turnover
There is a lack of rewards and support for employees, which is increasing employee turnover. Managers of this brand have to work on adopting suitable strategies, which can provide motivation to their employees, and can boost their production. However, there is also a need for valuable practices and behaviour optimisation in the organisational workplace of this brand, which can reduce turnover of its employees (Salih et al. 2021).
- Customer relationships and satisfaction
This brand is also facing issues in meeting expectations of its potential customers, and therefore innovating more technological advancements in its organisational workplace can help to increase its production. Moreover, managers of this business sector have to focus on motivating their employees and balancing their organisational workplace culture effectively (Palagyi et al. 2019).
- Poor communication
The selected brand has to improve its communication activities with its organisational employees and customers, which can help to expand its business quickly. Communication with organisational employees and customers is needed to be improved by managers of this brand (Favour & Tamunomiebi, 2020). Managers have to focus on listening to complement their customers as well as organisational workers, which can improve organisational performance and achieve competitive advantages.
Three options relevant with corporate strategy
This brand needs to adopt corporate strategies for enhancing its organisational performance and providing best services to its potential customers. Three major corporate strategies that are needed to be adopted by this brand are “Visioning”, “Objective Setting”, and “Resource allocation” (Zhu & Westphal, 2021). Hence, adopting these corporate strategies can also benefit this brand to increase its organisational profitability and optimise its organisational culture.
- Visioning
Managers of this brand need to share their organisational vision with all of their employees, which will boost performance of this brand. Hence, providing vision to employee team will also increase its productivity as well as profitability.
- Objective Setting
Managers also need to set objectives for their organisational tasks, which will help them to increase performance of their employees.
- Resource allocation
Managers also need to focus on allocating their organisational resources properly, which will help them to boost their organisational activities efficiently.
Proposal for Sothema
After analysing information from previous activities it has been found that Sothema is currently facing struggles in employee turnover. Employer turnover rate has decreased significantly in Sothema and it has impacted on revenue generation of Sothema on a large scale. Customer retention rate also decreased in recent times, this situation is very alarming for Sothema. Creation of a beneficial business proposal for upcoming ten years in Sothema becomes inevitable. Production process is not up to the mark and there are a lot of drawbacks to production techniques. All of these impact on the sustainability of Sothema as Sothema imports most of its raw materials from Germany, France, and other countries it is highly necessary for Sothema to maintain an effective, technology-enabled, and efficient production channel. There are issues like poor teamwork and customer satisfaction issues in Sothema.
After analysing all issues, it can be stated that authorities of Sothema should improve their negotiation skill and operation management ability to boost its corporate strategy. Moreover there is immediate requirement to incorporate Ansoff growth for Sothema in order to penetrate market with their differentiated products. Some strategies that Sothema can follow to improve its negotiation skill are discussed below:
- Before adopting new production Sothema should build a good and effective relationship with all its stakeholders such as employees, suppliers, and managers.
- Sothema should pay keen attention to preparing, analysing, and proposing that will improve its employee engagement and customer retention rate.
- Effective practice of rules, regulations, and policies from ground level employees to managers can be a conductive proposal for Sothema.
- Business reports and tenders of Sothema must be clear and transparent so that there is no miscommunication among all stakeholders.
- Authorities of Sothema should improve their bargaining skills and negotiation capabilities so that they can improve their production unit.
Impact of choices on three stakeholders group
There are three types of stakeholders in Sothema, those are employees, customers, and suppliers or investors. It has been identified after analysing information from previous activities. After analysing all issues and situations of Sothema it can be stated that improving communication skills and negotiation skills are going to be most beneficial for Sothema and its stakeholders.
Employees
Negotiation with employees requires an effective understanding of business standards and employees’ perceptions (Hansen, Nørgaard, & Hallgreen, 2020). It cannot be denied that employees are greatest asset to any organisation and Sothema is not an exception in this case. Expectations of employees are also an important factor in negotiating with them. Health, safety, securities, and incentives are some important factors that can be topics of negotiation. In this way, employee retention rate can be improved and eventually revenue of Sothema will be increased.
Investors
Negotiation with investors is a critical factor for authorities of Sothema as different investors have different intentions (Bahri et al. 2022). However, during negotiating with investors building trust is highly important. Leveraging existing infrastructure, effective resources, and company benefits should be a pivotal point of negotiation. Authorities should be rigid when intentions of investors are not fit organisational objectives.
Customers
Negotiation with customers’ needs tactful intention of Sothema as different customers have different needs and demands. Price of products, availability, and quotation should be the pivotal concept of negotiation. A collaborative effort should be adapted by Sothema while negotiating with customers.
4. Reflection for assessment of stages of this proposal
In order to do this proposal for Sothema, I had to follow various stages that should be followed for proposing a corporate strategy. At first, I had to do proper market research on how to increase competitive advantage of a pharmaceutical company. Market research is extremely important for developing a corporate strategy as knowledge about potential buyers is important and relevant for developing strategies (Jelonek et al. 2022). In activity 1, an analysis of different technologies has been done which made this a robust proposal. A proposal could not have been prepared without having knowledge about market conditions as analysis of market conditions is required for making a proposal on corporate strategies. The next stage of proposal development is an analysis of information that has been gathered as without a proper analysis, it is not possible to develop a proper corporate strategy for Sothema. Sustainability is required for businesses as sustainable businesses have a chance of running for a long time in business market (Jelonek et al. 2022). Hence, I had to figure out needs of this business to be sustainable in the long run. I also analyzed that, the customer retention scale alerting Sothema for some unpredictable changes. In activity 2, an analysis of key marketing areas has been done which helped in getting facts about business market.
This proposal has become robust by learning about competitive tools that can be used for developing objectives for this business. In Activity 3, key issues affecting this industry have been done. I have gathered knowledge on issues of Sothema by analysing its different processes which helped me in getting insight into production process, customer service process, and other relevant processes. The impact of stakeholder group on Sothema has demonstrated an clear overview of developing management strategy in every aspect. It helped me in gaining knowledge about internal processes of this organisation and make recommendations for solving these issues.
I have learned a lot about business management and external & internal environment management activities that support businesses to improve their business performance. I have learnt about sources that are required to achieve a competitive advantage in operating markets. In order to undertake this project and formulate a corporate plan for Sothema, information on important stakeholders of this company had to be undertaken. I had already taken into consideration of customers’ perceptions and complaints to know about their views towards this organisation (Ikram et al. 2019). There were issues with leadership that needs to be solved so there should be a corporate strategy for solving this issue.
5. Conclusion
It can be concluded that Sothema is trying its best for maintaining its competitive advantage in Morocco. However collaboration with Chinese medical institution can be considered one of best strategies of this business organisation. There are lots of issues with this organisation such as this organisation is not able to collaborate further with other companies. This organisation gives importance to local production and it is one of its corporate strategies. By following this corporate strategy this organisation aims to accumulate autonomy related to field of medicine production. Moreover this business organisation has started to give importance to collaborating with some international laboratories.
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