SG7001 Managing Strategy Operations and Partnerships.
Activity 5
Introduction
Corporate strategy is hugely defined as a multidimensional strategy that any organization has applied to specify its objectives and working structure to attain ownself goals. It all depends upon the size, nature, type, function, structure, and other factors of an organization the corporate strategies are created to gain more profit. It is also helpful in growing the business into a new segment globally (Feldman, 2020). According to a recent study, Kakira Sugar Works’ corporate strategy is supposed to be applied for the next ten years. While considering this, all other proper and related thing to the corporate strategy is widely described in this report. It covers the evaluation of competitive advantage, issue development regarding success factors, proposal development, corporate strategy options, assessment of options, and many more.
Critical Assessment of Competitive Advantage stemming from strategy
Evaluation of Competitive Advantage factors
In this section of the report, Kakira Sugar Works’ competitive benefits elements have been evaluated through the practical application of Porter’s five forces.
Figure 1: Porter’s Five Forces Model
(Source: Porter’s Five Forces Analysis, Wikipedia, 2022)
- The threat of New Entrants [Medium]: New company and its entry into the sugar industry of Africa can affect the growth of Kakira sugar company. This threat turns into high competition in the market. Kakira has focused on using new and creative technology while proving its price policies. It has focused on reducing costs while adding more value to its product. The organization must be ready to deal with such heavy competition while maintaining its effects on the objectives (Bruijl, 2018). Proper research H and development have also helped the company manage these threats easily and quickly.
- Bargaining Power of Suppliers [High]: The majority of the companies in South Africa have purchased all their raw materials from some fixed trades, which has increased the factor of bargaining in the Kakira company area. They play a dominant role in decreasing the profit and revue of the company while increasing their own as there is a limit of supply. They try to make more money from different t company in the same industry. The high power of bargaining in the suppliers has made a low level of generating review for the company.
- Bargaining Power of Buyers [Medium]: In this scenario, it has been noticed that this factor is having a moderate effect on the company’s growth because of the high demand. The company should bring up some effective orders while providing reasonable prices. It may turn into force Kikira company to generate revenue in the long term. It has been evaluated that a small customer base holds the company’s significant bragging power (Saebi al. 2017). These bargaining factors have also forced the company to introduce more customer offers and discounts. It also has spotlighted the factors like fast creativity in products, retaining the existing customers, and others.
- Rivalry among Competitors [High]: This threat has been evaluated as having a high intensity on the whole sugar industry of Africa. This is the only reason Kikira company has lowered the price of all the products, affecting their profit and industrial growth. This company also gives tough competition to other forms of the industry. A high level of competition is a significant threat that can affect the company’s profitability in the long run. The scale of measuring the profits, integrating with the competitors, and other elements
are highlighted in this case.
- The Threat of Substitute Products [Moderate]: In this threat, it has been determined that there are few subsidiaries of sugar in every area of South Africa. This is why the other products are highly traded compared to sugar. Sometimes the whole industry suffers because of the low demand for sugar (Mweru and Maina, 2016). Kakira company has focused on making a different product to deal with his situation.
Issues’ Development regarding Success Factors
It is based on the positive elements of Kikira Sugar Works as represented in Task1, which has undergone some problems, which have been discussed as follows:
- An increase in the production cost has been applied to the sugarcane, which affects the organization’s primary activities (Arend al. 2017). Concerning this element, the non-economic procedure of the manufacturing, including high excise duty cost, has a profound impact on the manufacturing cost.
- Due to improper information and outdated technology, the majority of the sugar mills in Africa might stop sugar production. Additionally, it has also been continued to impact the business environment negatively. These mills have reduced size with a capacity worth 1,000 to 1,500 tons per day and failed to take competitive benefit in the market environment afterward.
- Additionally, it has also been evaluated that sugar manufacturing has forced an essential and negative effect on the environment (Nadikattu, 2020). There was a lot of pollution, which may lead to severe health issues for the workers of Kakira Sugar Works. Therefore, in this case, it has also been evaluated that there are uncountable efforts that have focused on decreasing the effect in the market afterward.
Proposal Development
Issues’ Prioritization and Identification
Here are some highly reported problems which Kakira sugar workers face:
- Firstly, t has been determined that the business environment has positively impacted the proof of sugarcane and the piece. Other food items like cotton, oilseeds, and rice have a high competition with this product (Mukherjee and Sen, 2019). It has also changed sugar prices because of the time to deal with the manufacturer due to low prices.
- The second reason was an increase in production cost, which has given rise to cases like insufficient technology and innovation, heavy taxes, and the non-economic procedure of production obstructing the seamless manufacture of sugar. The imposition of various government rules and regulations has triggered the sugar stock’s limit and inefficient metrological rules and regulations (Ottoo, 2020). There are a few other impacts like unproductive prices of sugar, less ability to expand the sugar mills, and some other problems that have been arisen in the same region
Options for Corporate Strategy
There are three options that are determined to apply the correct corporate strategy in Kakira sugar mills for the next ten years are defined below:
- Corporate Growth: The following strategies are in the form of market and product making with a horizontal combination which has been majority evaluated. In this way, the sugar organization can grow internally while enhancing its sales with new sugar-related products and services. According to the horizontal combination in business, many businesses must be created with the help of effective distribution channels and intermediaries (Frank and Sanati, 2021). It can also focus on building healthy customer-supplier relationships in the organization. External business growth can also be expanded with the help of more profits, increased market share, suitable brand image, and more.
- Stability in Business: This strategy helps develop the sugar company’s best and most effective corporate strategy. It is very important to maintain a healthy and peaceful environment to get the work done effectively and efficiently. It adds value to the job of the employees while satisfying the customers afterward (Varadarajan, 2020). Besides that, it has also been evaluated that stable, once in a quarter environmental organization meetings focused on setting up an unsustainable business environment. A hygienic business environment applies the healthiest and effective concept related to sugar production.
- Combination Strategies in Business: Applying combination strategy in the business environment of Kakira sugar mills, which has been highly determined to create an effective corporate structure. As an introductory section of ore business strategy, the UNEP cleaner production program 2002 helped introduce the smooth manufacturing process and business activities with an adequate level of profitability and productivity of sugar (Holmes al. 2018). Apart from this, the company also aims to manufacture sugarcane with the help of healthy, stable, and favorable environment kind of managerial practices.
Assessment of Options
According to this report, the above topics have been evaluated that is helpful for building an effective, efficient, and manageable corporate strategy for the Kakira Sugar Work for the next ten years. In this scenario, corporate growth and productivity, production, product research and development, horizontal and vertical business practices, and many more are considered here (Massa et. al. 2017). Besides that, in the case of business suitability artefacts, it has also been highly emphasized that vast concerns of the company for wetlands, river zones, steep slopes, and shallow soils must help it guarantee sustainable sugar production with a diverse range of positive results and advantages altogether. Apart from this, as an introductory section of the combination strategy for the business growth and expansion of the company, effective and efficient manners of business improvement are needed afterward.
Final Choice of Option with Justification and Impact on Stakeholders
In this particular context of the recent study, it has been highly evaluated that all the elements related to corporate growth have been needed to create, develop, and maintain an effective corporate strategy for Kakira Sugar Work. In the same manner, the effects of strategy on stakeholders have been described below:
- Corporate growth has affected business expansion and puts efforts into enhancing employee benefits and advantages. Companies providing different products to the customers will help them lead in the market while delivering high satisfaction to consumers and suppliers (Golembiewski, 2019). Additionally, effective development of the product and internal organizational development has played a massive role in encouraging the employee commitment and satisfaction relating to the providing the effective work performance with different types of results and benefits at the same time and workplace.
- Another critical aspect of the company is its customers, as they are the essential asset of its growth. Corporate growth can be enhanced with the help of high satisfaction of the customers and providing them with the best products (Leonidou al. 2020). Effective market development while including the horizontal; integration which enhances the benefits and advantages of the customer.
- The last aspect is related to the stakeholders of the company. Effective differentiation in the business must have some positive impact on the organization’s growth. In this manner, the level of effective investment can also be increased, which must have efficient support for the further development and growth of the company (Andriof and Waddock, 2017). It leads to various outcomes, positive results, advantages, and other aspects.
Reflection
According to this report section, a detailed reflection has been created and developed, presenting some fundamental stages. This has also been considered while performing this assessment effectively and efficiently. Additionally, optimistic business outcomes have also been informed as a case of purpose, which has also been needed to guarantee that the proposal is strong enough for further use (Rugman and Verbeke, 2017). This part from that the practical understanding has also been evaluated in the essential teaching procedure in the module at a similar timing.
Recently, it has been highly echoed that at the point of the first assessment, I knew about various stages that have been considered in this particular assessment. In this manner, in the first and foremost stage, I have determined the different terms regarding various working tools that help evaluate the range of competitive benefits with effective contribution and efficient impact. It is very important to use the tools properly to achieve organizational goals effectively and efficiently. While solving this study, it has been noticed that five porter forces are used to determine, analyze and evaluate different essential comparative elements of the company, including the whole sugar industry of Africa. Besides that, it is also helpful in gaining knowledge about every section’s weaknesses, strengths, opportunities, and various threats and their impact on the growth of the different companies in the sugar industry (Hernandez and Menon, 2021). In other words, it can be said that Porters five forces are highly used to maintain and at the working structure of the company with the primary objective of creating an effective corporate strategy at the right time. It helps carry out all the business and managerial functions appropriately while dealing with the high level of competition in the market.
On the other side of the assessment, it has been evaluated that some fundamental problems are identified, and it is also essential for the Kakira sugar work and has an impact on its success elements according to the factors covered in Task1. According to the particular segment, it has also been highlighted that I have aimed at fundamental issues that might increase with the negative impacts on the sugar industry and related companies. It covers various problems like improper management, ineffective technology and innovation, production cost, selling prices, and other things (Basu, 2017). Additionally, I have also decided to make different categories of these specific problems according to the depth of their impact on the growth and expansion of the business after that.
According to the following part of the assessment, it is necessary to create an effective corporate strategy, and all the identified issues need to be categorized with an effective way of selection. That’s why it can be concluded that after prioritizing all the problems, good practical problems can be determined, which can be further considered for creating the corporate strategy for the company for the upcoming next ten years. Afterward, it can also be evaluated that three main options are determined for choosing the corporate system from prioritizing different issues. While choosing from the available options, my main motive was to apply theoretical and model0based knowledge more than other irrelevant concepts (Espahbodi et. al. 2019). Three basic strategies contain corporate growth strategies, stable business strategies, and combination strategies that have been suggested, which must help shape corporate strategy for the sugar company for the next ten years. Additionally, while setting the corporate system for any business cooperation, it is also evaluated that it is needed to consider other options like market share, product development, and more, which are also very beneficial in regards to the corporate strategy.
Afterward, it has also been evaluated that I have the knowledge of those options for setting the corporate strategy of the business organization, which is made with the successful creation of a compelling proposal for the fundamental business entity. In the end, I have concluded with selecting the most appropriate option applied in the whole matter of corporate strategy and setting it up for the next ten years. Moreover, terms like stakeholder management, involvement in the company’s activities, and effective capabilities to deal with market areas (Puranam and Vanneste, 2016). In the same manner, the primary effect of the option or choice of corporate strategy building on these three stakeholders has also been described with possible results and findings at a similar position. At last, a small and practical introduction and conclusion with recommendations have also been described in this report.
Conclusion
The corporate strategy of any company is highly responsible for achieving the goals effectively and efficiently. It provided suitable development to the firm for the next ten years. It uses practical working tools in the company while gaining the competitive benefit, shown in Kakira Sugar Work with a motive of highlighting various points regarding the issues and identifying the success elements of the company. The multiple cases have been prioritized according to their impact, which has created a need for corporate strategy in the organization. Various implications for stakeholders are also covered in this report.
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