BSS050-6 Strategic Management Assignment Sample
BSS050-6 Strategic Management Assignment Sample
Introduction and justification of possible strategic model
The locksmith company of the UK, D&G Short produces locks and keys for furniture doors and Gates after having a registered certificate from the government; however, after going through various tests the company got the credibility to ever enter the security and locksmith industry. During the earlier times, the locksmith company of D&G Short maintained market growth and satisfied its customers by providing locks and keys and Gate security and automation however during the present scenarios, D&G Short faced challenges in acquiring customers and lost its market share further resulting in operations challenges. On a broader note, it has been stated that the challenges of the locksmith company of D&G Short have been observed after analysing the external environment of D&G Short in the UK where the company’s output is negative (Christodoulou and Cullinane, 2019). It may be further argued that further analysis regarding the internal and external environment of the company of D&G Short has been conducted through Value Chain Analysis, SWOT analysis and Five porters forces. Some recommendations have been provided to D&G Short to improve the market share and may improve its customer acquisition power after adopting strategies of relevant models such as the Ansoff Matrix, BCG Matrix, Mckinsey Matrix, Bowman Strategy Clock, Generic Strategy, Roger Model and SFA Model.
Identification of possible strategies in relation to external and internal environmental analysis of D&G Short
1. Ansoff Matrix
The strategic models of the Ansoff matrix have been used for expanding the market share to grow initiatives by the management teams and the analyst community however further risk may be associated while implementing the strategy. Apart from that, the mathematician and business manager of H. Igor Ansoff invented the strategic model of the Ansoff Matrix which was first published in 1926 (Hamim and Mailanda, 2019). Apart from that, the companies that are in the situation of losing their market share or operational challenges may implement the four strategies of Ansoff Matrix which are Market Penetration, Market Development, Product Diversification and Product development which will further provide a favourable output to the company.
In the present scenario, the locksmith company of D&G Short faced challenges in acquiring its customer, apart from that the company follows traditional marketing strategies which need to change by the company for better improvement.
Market Penetration
The strategy of market penetration needs to be adopted by the locksmith company of D&G Short to change the current scenario and the company will be able to achieve its acquisition power to acquire its customers in the existing and emerging market (Paul, 2018). On a broader note, it has been stated that a market penetration strategy will further improve the organisational structure of the company and will help to be a market leader and will have brand equity after having a high value of sales and revenue. It may be argued that B and G focusing on the market condition needs to observe the demands and choices of the targeted customers to predict whether a new product needs to be launched in the market or improve the quality of the existing product. And if D&G Short wants to fulfil the demands, then a new product needs to be launched to attract customers. The traditional marketing plan needs to be changed by D&G Short and an advanced marketing plan needs to be developed in market penetration strategy by focusing more on pricing strategies which will further attract the customers and will increase the customer changing the current scenario of D&G Short (Wambugu et al., 2021).
Market Development
The Locksmith Company of D&G Short may change the present scenario through the adaptation of a market development strategy while entering a new market base to improve its market share and will help to acquire new customers. It may be argued that D&G Short may do market research to identify the needs, preferences and choices of the new customers through segmentation analysis and further dividing the market into various segments (Clarissia, 2020). The usage of effective social media market marketing, good branding and sales promotion in the market development strategy will further improve the market scenario of D&G Short making the company achieve flying colours. In addition to that, if the company will be able to use the market development strategy in proper way then the company may be able to target more customers.
2. BCG matrix
The strategic model of BCG Matrix is a tool that performs operations involved in planning procedures making the company decide whether more investment news to be done in the company or the existing assets and products need to be kept or sold after having a graphical representation of the company’s products and services (Kader and Hossain, 2020). It may be argued that companies following the four categories of dogs, cash cows, stars and question marks will be able to take effective strategic decisions changing the current scenarios of the company and improving the internal structure of the company.
The current scenario of the locksmith company of D&G Short is the company faced operational challenges in acquiring its customer base thus the company has been considered a dog as the company has a decline in the market share and also has a slow growth rate. Apart from that, D&G Short having a slow growth rate in the market share faced challenges in maintaining its sales and profit, however, BCG matrix having a dog structure may focus on deploying its valuable existing capital and resources in other operations of the company. Moreover., D&G Short may focus on increasing the production of those products since the company is generating a little market share attracting a small part of customers and a further increase in production may improve the market scenario of D&G Short. On a broader note, it has been stated that D&G Short having a position of Dog may generate a competitive advantage after investing in the resources of the rest of the company (Kuc, 2021). It may be argued D&G Short tending to become question marks may create new startup plans other than the existing markets after having the knowledge of the new markets and on the other hand market development and product development may be done by the company.
D&G Short while entering into a new market base may have low profit and high demand due to lower market share, however, market share may be increased by the company through selling the unnecessary resources of the company and investing a lump sum amount of money in increasing the share in the new markets through advertising and digital marketing (Yahya et al., 2020) The scenario of the locksmith industry will be changed after the company improves its market share in the new markets and further will be able to become stars and then cash cows which will further improve the acquisition power of the company. Furthermore, the company after achieving the position of the stars will be able to maintain a proper growth rate other than its slow growth rate and later will be able to have a large market share other than its declining market share tends to become a cash cow.
3. Mckinsey Matrix
The strategic tool of Mckinsey Matrix was developed during the year 1970 and emerged as a portfolio management model focusing on the areas of investing, protecting, harvesting and digesting from where the companies may get proper guidance regarding the investments. Moreover, the activities regarding the products and services and the capabilities regarding the product may be provided to the company from where the company may further adopt strategic planning for any change in the current scenario (Kieltyka et al., 2022). It may be further argued that the company may further achieve sustainable urbanisation performance through the implication of the Mckinsey Matrix after getting further analysis regarding the strategic businesses (Yang and Jiang, 2018).
The locksmith company of D&G Short after following the areas of competitive advantage and market attractiveness may come to a point that the company has a reduction in the market share due to poor customer acquisition power resulting in a negative impact on maintaining customers however the company has a good network of loyal customers. On a broader note, it has been stated D&G Short has a limited number of suppliers as the company has been a family business with limited expansion thus the company has moderate bargaining power over suppliers on the other hand companies facing challenges in acquiring customers face high bargaining power. It may be further argued that D&G Short has a moderate chance of getting replaced by substitutes and on the other D&G Short faced operational challenges due to high competition in the market. The company has a low chance of being replaced by substitutes may focus on creating unique and advanced locks to satisfy the customers, and on the other hand D&G Short has been one of the reputed companies in the country of UK which may provide a competitive advantage to D&G Short. Utilisation of innovative and digital strategies may further improve the sustainability of the company of D&G Short and the introduction of innovative technology of automation systems in the gates and doors by D&G Short other than the competitors may provide further competitive advantage (Distanont and Khongmalai, 2020).
However the company of D&G Short lost its acquisition power among the customers due to the pandemic, the company has a group of loyal customers due to its healthy reputation and loyal customers and may adopt a referral strategy upon those loyal customers to create more network chains. Furthermore, the company after observing the internal and external areas of the environment may further focus on adopting any of the growth strategy, hold strategy and harvest strategy, which will be more appropriate for D&G Short to change the market scenario.
4. Bowman strategy clock
The strategic model of Bowman’s Strategy Clock has been one of the important strategic models to predict the competitive advantage of a company after analysing the components of the company which may further change the market scenario of the company (Kasamani et al., 2021). Moreover, the companies focusing on the combinations of price and perceived value may develop a chance of sustaining in the competitive market after analysing the current market strategies from where the company may take any further changes. The following assumptions of the strategies and procedures of the company to compete and the places and situations of competing have been given by Bowman in the Bowman Strategy Clock.
Bowman Strategy Clock model may be further adopted by the company ofD&G Short to observe the internal structure of the company after going through the following areas of low value, low price, hybrid, differentiation, focused differentiation, increased price and high price from where Short may take further changes for improving the scenario. It may be further argued that Short, facing challenges in acquiring customers, may focus on lowering the prices of the automated locks and provide other services related to lock repairs of gates and furniture doors at a low cost. However, increased price will not be a solution for the company to acquire the customers and on the other hand, providing further discounts on the locks that will provide value to customers may improve the market scenario of D&G Short. The company of D&G Short through the introduction of automated lock systems in gates and furniture doors has been able to generate a part of loyal customers, the company increased its market base from these loyal customers after introducing advanced technologies in the door locks such as biometric systems. D&G Short having a large competitive market having a competition with rival players may focus on branding the company to make the customers know about its valuable products creating further communications with the customers regarding the benefits of the products which will be a differentiation strategy of the company (Dwivedi and McDonald, 2018).
5. Generic Strategy
Four strategies that are being categorised by Porter’s are required for an organisation to achieve competitive strength named by cost leadership, differentiation, cost focus and differentiation focus. The main benefit of Porter’s Generic strategy is being counted for the competitive strength of a firm with the company performance and degree of successful outcomes intricately involved (Islami et al., 2020).
Cost leadership
This block of Porter’s Generic Strategy is important for an organisation to accomplish the improvement of sales, manufacturing, and production in fact for overall operational efficiency. Precisely cost leadership has the ability to turn the table towards positive outcomes in case of customer growth within a total market arena with focusing on price sensitivity (Aji et al., 2021). D&G Short, one of the developing locksmith companies in the United Kingdom owns major challenges with customer acquisition specifically after the outbreak of the Covid-19 pandemic. For this reason, the company may follow and practise the cost leadership strategy to overcome the critical challenges within the comprehensive market arena along with competitive benefits
Differentiation
This quadrant tells about the uniqueness of a product endorsed by an organisation where strong and diverse innovation will be the key player for the distinctiveness. The chances of success of D&G Short concerning this factor may be small because the company is also moving with financial challenges. Henceforth, there is a matter of budget inadequacy to bring innovation in the production for this reason this part of Porter’s generic strategy may not be deployed by D&G Short.
Differentiation focus
Focus on differentiation is the parameter that is allotted for an organisation to stay ahead in the competition, in other words, to outperform the existing rivals with product diversity. The SMEs or the developing firms possess limited resources and thus not all the time attainment of the desired product differentiation and diversity may be done (Dias et al., 2021). Thus, this strategy may not be suitable for the mentioned locksmith firm to get the competitive advantages within the niche market and not also for the addressing and subsequent mitigation of the challenge in customer acquisition
Cost Focus
Now, the final square of this framework is the cost focus, which also falls under the factor of competitive advantage along with a low-cost approach for an organisation within the niche market. The business growth of D&G Short is being massively hampered by the impacts of Covid19 and the financial strength and profitability are on the question mark and under strong risk. Due to this cause, the low pricing strategy may not help the company to deal with the challenges of consumer acquisition and overcome the negative factors of total business growth. Additionally, the cost focus may help the company to cut down the expenses that are tremendously important in this critical time of challenges within buyer acquisition and business growth.
The tool of Porter’s generic strategy has been used for the analysis of the competitive advantages for the growth of the business and the consumers.
6. Roger’s model
The bell-shaped curve of Roger explains the factors and nature of the adaptations that need to be taken for the fruitful implication of the innovations regarding a product manufacturing or endorsement. The curvilinear phases are known as innovators, early adaptors, early majority, late majority and laggards and each stage indicates the level of distribution of the innovation for the diverse outcomes within the market (Mallinson, 2021).
Innovators
Those who belong within this category are keen to take noteworthy risks to draw innovation and deploy new opportunities for meeting versatile productivity and uniqueness. The Covid-19 pandemic hit some SMEs hard and there is less room for the implication of innovation as the catalyst of resilience needed for overcoming financial and operational challenges (Dias et al., 2022). This is why D&G Short may not be able to take the advantage of this phase to address the challenge of customer growth with comprehensive innovation.
Early adaptors
In this case, the adoption of the technicalities for the innovation takes place which will be comparatively beneficial for the SMEs, especially those who are going through an operational crisis and for whom the innovation from the starting point may not be suitable. The growth of the performance of an SME is determined by the degree to adopting new technologies for innovation (Mittal et al., 2020). This strategy may help the company to develop production quality within a short time and the challenge of customer acquisition will also be addressed.
Early Majority
This strategic phase of the innovation adoption distribution curve works for the innovative solution for a particular challenge within the business and focuses on the post-production challenge analysis. The Covid 19 pandemic has impacted the business circumferences of this reputed locksmith company and somehow the production process has also been disrupted massively. Therefore, for the previously mentioned disadvantage concerning the sole dependency on the completion of the production D&G Short may not utilise this particular strategy.
Late majority
Reluctance or being averse to taking risks along with the tendency to go for the new and safe technicalities, which ensure a positive outcome, is the main characteristic of this approach. Some positive risks need to be taken by the SMEs, especially those who are operating within a small range of markets and have objectives to expand across the bigger arena (Shojaifar, 2020). Insufficiency in the financial capital because of the sales decline and lowering of the consumers may not allow the company to take essential risks for the amplification of innovation
Laggards
The final coordinate of Roger’s adoption curve is the laggard in which, sticking with traditional belief for bringing innovation instead of the projection of new technicalities. The introduction of new products is not actualised in the case of laggard companies because of the deficiency within the versatility in endorsement and manufacturing process (Hoxha, and Kleinknecht, 2020). Thus, D&G Short may not act as a laggard firm to address the challenges of acquisition because to draw the attention of buyers product diversity is extremely needed.
Then, Roger’s model of the adoption curve suggested a suitable strategic approach named early adopters for the distribution of the innovation, especially within technicalities for better and improvised production.
7. SFA model
The SFA matrix is the model which comprises the determinants namely feasibility, suitability and acceptability for choosing one strategic option which will apply to the competitive advantages of a firm. The divisions of this matrix are being used by the management of a company for comparing the available options and select the best from those choices to attain competitive strength (Zolfan et al., 2021)
Suitability
The evaluation from Porter’s Generic strategy shows that the cost leadership approach may be the most befitting option for D&G Short apart from the differentiation focus and cost focus factors. The flexibility in the structure of the costs has chances to accelerate the growth of the business at the same time it may augment the number of customers because innovation is also involved with this factor (Juliana et al., 2021). On the other hand, the strategy of being an early adopter may also reflect the progress of this company in the challenging customer acquisitions. Market development may be a suitable strategy for D&G Short to enhance the base of customers that have opportunities to bring a surge in profit and business growth
Feasibility
Suitability may only be practised when the organisation has enough resources to reach the level of feasibility for the persuasion of the strategies regarding the growth of the business. The strategic approach of being an early adopter firm needs moderate financial feasibility from D&G Short because the process is quite smaller than the comprehensive innovation from the beginning. On the opposite note, the company does not have enough resources to attend to the feasible outlook of the market development because of the obstruction within the business due to Covid 19. Comparatively, the company may focus on the cost leadership strategy because this is more beneficial for the feasibility of the financial shortcomings along with low production cost.
Acceptability
The strategy of cost leadership may be most acceptable to the stakeholders of the D&G Short because there are several advantages such as the presentation of high-quality commodities within reasonable prices. In fact, this strategic approach will be most befitting as this hardware and locksmith enterprise is moving with the challenges of customer acquisition that is hampering the business growth. Somehow, the other two strategies that are being suggested from the Ansoff matrix and Roger’s innovation adoption curve, the early adopter of new technicalities and market development are standing upon cost leadership. On a broader note, cost leadership is responsible for the outperformance of a firm with respect to its rivals in a market (Chelliah et al., 2022). Hence from the overall analysis, it may be said that the strategy of cost leadership will be acceptable to the management of this company for the profitable response and sumptuous financial return.
The three steps of the SFA model Suitability, feasibility and acceptability were also discussed for the best and most accurate suggestion towards the stakeholders of this company for the development of the business operations. Conclusion and recommendations from the above analysis of the strategies tools will be given in two consecutive appendices that are appendix 1 and appendix 2.
References
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Appendix
Appendix 1
Conclusion
From the above report, it may be concluded that one of the developing SMEs of the UK, D&G Short is facing challenges with buyer acquisition and comprehensive business growth. The tools for addressing this challenge have been analysed with seven theoretical models namely, the Ansoff matrix, matrices of BCG and Mckinsey, Bowman’s strategy clock, and porter’s generic strategy for competitive advantages within total and niche markets. Apart from that, the SFA model summarised the relevance of the strategies that had been chosen to address the challenges mentioned in previous frameworks and aligned with the market challenge of this firm. The factors of market penetration, market development, cost leadership, cost and differentiation focus have been evaluated vividly for developing the competitive advantage and addressing the business challenge of D&G Short. Along with that the requirement of innovation and a balanced level of adoption is needed for the firm and that is also illustrated with suitable options of the early adopter followed recommendations for the strategic competitive advantages of this company. Furthermore, the automotive locksmith company of D&G Short may again improve its market scenario after providing further satisfaction to its existing loyal customers, which may further improve its acquisition power. Adaptation of digital strategies and effective branding through various sources will improve the market scenario in the existing market as well as in the new market.
Appendix 2
Recommendations
- It should be recommended to D&G Short to focus on the improvement of the cost leadership strategy at the same time need to balance with the differentiation focus for competitive advantages
- D&G Short should be advised to concentrate on the elevation of the new technicalities for the diversity in the products and the strategic approach of early adoption needs to be taken to quicken the process
- It should be suggested to this company for paying attention towards digital marketing and advertising for the development of customer acquisition and high-order financial profit
Another recommendation that D&G Short has to follow is the observation and practical implication of the insights that will be acquired from new markets to understand the trajectory of customer demands. Establishment of the communication touchpoints across different markets is the determinant for robust customer engagement and high-end growth of the business for any organisation (Jayathilaka, 2021).
Further recommendations have been provided to the locksmith company of D&G Short to reduce its operational challenges and increase its customer acquisition power changing the current market scenario of D and G. Apart from that the company needs to adopt pricing strategies and needs focus on the views and preferences of the customers of the existing market while implying market penetration strategy of Ansoff Matrix. Gaining knowledge of the new market to observe the preferences of the customers as well as utilising effective digital marketing strategy will further improve the market scenario in the new markets. It may be argued that following the main areas of the models such as BCG Matrix, Mckinsey Matrix, Bowman Strategy Clock and other strategies the company of B and G needs to observe the strength and weaknesses in the internal structures of a company to develop further strategies, which will further help the company to achieve successive goals.
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