SG7001 Managing Strategy, Operations and Partnerships Assignment Sample
Executive summary
This report is mainly based on the Thermax Ltd, which is an energy industry. There discussing topics are benefits of competitive advantage of the company, another important discussing topic is specify each of the issue and develop strategical option that surely addressed at least three of those issues.
Introduction
Strategic analysis is a process to formulate the operational planning, decision-making, and strategic movement of an organization. In this report, advantages of Thermax Ltd related to the competitive environment, its issues, and the strategic recommendation options are going to be discussed. Along with that, preferred strategic management and the effect of issues in stakeholder management will be discussed in this report.
“Advantages of competitive advantages of Thermax and issues.”
PESTEL analysis
Political- Political sector mainly implies the impact of local government on the Thermax industry, moreover; through this, people can understand how the government helps the energy sector. Government helps the industry through trade stability, taxation policies, and energy transportation. Moreover; the government of India helps the industry to use renewable resources; thus, they can overcome environmental pollution (Thermaxglobal.com, 2020).
Economic- Economic factor mainly describes the financial condition of Thermax; however, their revenue of Thermax is decreasing with time. On the other hand; they have to manage their raw material resources to generate power and have to oversee the most natural products which can mitigate their economic issues.
Social- Social factors are important to analyse the culture of Thermax that is it mainly focuses on the emerging trends of the society. It also helps Thermax to identify the necessity of customers, their choices, and reviews about the product. It also helps the company to understand environmental degradation for harmful raw materials which mainly exit from the boiler.
Technological- Thermax has to implement different types of emerging technologies such as IoT, ML, and big data which helps them to generate power effectively. For this, employees will also get the motivation to do work; however; Thermax does not apply any modern technical theories in energy generation (Thermaxglobal.com, 2020).
Environmental- Environmental factors such as “corporate social responsibilities”, corporate ethics, and business code are important to sustain in the present industry. However, Thermax has been suffering from new technologies and their CSR strategies which they need to modify.
Legal- Legal factors are important to analyse customer’s law, employment legislation, and international trade rules, which mainly helps to identify government policies which help to increase the GDP. Thermax maintains “The Water (Prevention and Control of Pollution) Act- 1974” and “The Water (Prevention and Control of Pollution) Act- 1974” to perform government legal acts (Researchgate.net, 2020).
International order booking
(Source: thermaxglobal.com)
“Porter’s five forces model.”
Competitive rivalry- This mainly deals with the competitors of Thermax, competitors are “Bharat Heavy Electricals Limited”, Siemens, “ASEA Brown Boveri” and so on, which mainly use emerging technologies. Thermax has high competition with other companies for their services and products.
Suppliers power- Suppliers power is average in Thermax as suppliers are mainly concentrated on those industries where they can get services at low cost with that they also think about the huge demand for products. However; in Thermax, their services need to be improved by which they can improve their supplier power.
Buyer’s power- Output of buyer, is further less in Thermax as it does not use emerging technologies for generating power they use a long cart method which introduces high cost. On the other hand, old technologies increase the level of pollution, which mainly reduces the power of customers, and they are facing huge losses in this case.
Substitution threat- “Threat of substitution” is extremely high in Thermax as it is an old company and the newcomers are applying new technologies in their heat or energy sector by which employees are also getting interested in working with them (Economictimes.indiatimes.com, 2020).
“Threat of new entrants”- This threat is further high in Thermax as newcomers are offering huge price cuts to attract customers and use some gas purifying technologies to mitigate pollution from the air which Thermax cannot perform.
SWOT analysis
SWOT analysis mainly helps to analyse organizational strength, threat, weakness, and opportunities. Moreover; by this framework, managers can identify the risk factor which needs to be mitigated to sustain the organization (Rastogi et al. 2016).
Strength- There are several strengths of Thermax Ltd. which will be discussed one by one; moreover; the main strength of Thermax is it has a strong estimation group through which managers get clear ideas about the costing of renewable resources. Net profit of Thermax is growing with its increased profit margin, and it has already returned 477.2% for 4.5 years. Moreover, its book value has been improving per share for over the last two years; on the other hand, it has quality assurance, business development, and safety management team (Thoppan, 2017).
Weakness- The main weakness of Thermax is that the revenue has been decreasing and the company is unable to make net cash; on the other hand, it is losing its customer. Another main weakness is that stakeholders are refusing to work with Thermax for their low profit.
Opportunity- The waste of energy is strictly prohibited everywhere, hence; it is a great opportunity for Thermax to reuse the waste energy, absorption and cooling process, heat recovery, and use of biomass fuel broiler.
Threat- Trade tension is increasing throughout the world, and different types of energy at low cost is produced by the developed country, and people are willing to use renewable energy for low pollution. In this case, Thermax is facing a trade threat from other companies.
“Prioritise the issue and develop strategic options that address at least three of them.“
Identified issue: Lack of technological innovation
There are several issues of Thermax; one of them is technological issues for which it is suffering from the threat of new entrants. Thermax is an old company which is mainly based on the energy sector that processes heat, generates solar power, and works on boilers. Hence, an industry must run a business with maintaining proper strategies of technologies which they do not follow. In this way, their production is getting reduced, and they are losing their customers in a huge manner (Lei et al. 2018).
Strategy for resolving the issue: As technological enhancement is going on with time. It is mandatory to cope up with that to maintain a long term business plan. Thermax does not use any modern technical equipment in heat generation methods through which new skilful employees are getting bored to work with them (Soni and Bhanawat, 2018). On the other hand, as the company is using different types of harmful gases and raw materials, hence from the exhaust of the boiler several types of harmful particles come out which pollutes the environment and the water. Hence, in this case, they have to innovate some technical equipment using IoT, ML, and Python which can be used as a gas purifier that is in the exhaust of the boiler (Hirschi, 2018).
They have to fix this equipment to purify the gas, on the other hand, to save the water species they have to provide such products which will purify the polluted water before mixing with any river. In the heating place, managers have to provide some leakage sensing equipment which will indicate the leakage in the gas pipe (Thermaxglobal.com, 2020). In this way, Thermax can mitigate the risks of employees. In order to make such equipment HR teams need to recruit some skilful person to encourage the other employees to make some technical equipment (Mueller et al. 2016).
Identified issue: Employee Attrition
The migrant workers who are working ‘in an unorganized’ workplace and they are living in polluted and unhygienic places are the main reason for their health problems. As per the opinion of Hall et al. (2016), migrations laborers are mainly those who are working in the field (construction sites, highway sights, metro sights) are vulnerable to water, air pollution and they are suffering from kidney, and lungs disorder Qin et al. 2020. Open space shelter in case of the contract labor act that stipulates the employer to provide a suitable accommodation.
Strategy for resolving the issue:
Employee satisfaction is one of the important indicators of HR effectiveness of Thermax. Ltd. All employees of Thermax Ltd feel in the working environment and it is important to improve the communication between each department of that organization. It is essential to improve the skills of all employees by motivating them. The HR department of Thermax Ltd should involve a flexible environment for workers so they can work properly. As per the Opinion of Hall et al. (2016), The HR department of the company should need to take care of the incentives for them when they can achieve daily job goals. The HR management team should include many experts and need to recruit many technical experts for improving their technical performance along with working performance.
After measuring the effectiveness of HR, the company should reflect on the implementation of improved strategies and deficiencies to manage and improve its performance of the HR of the company. There are some important tips for improving HR performance. The most important thing is the need to improve the organizational communication process among employees. It is also important to check that all departments are communicating properly during any important task of Thermax Ltd.
Essential to focus on the HR department on the effective ‘training program’ to improve the working performance of all employees. Their most important bathing which needs to focus is that each employee should get daily feedback on the base in their daily performance, though they can vary their daily performance and can improve their performance. As per the Opinion of the Hall et al. (2016), it is essential to build a cultural vision of the company for the growth of the company. The company should improve or it can be said that the HR department should focus on using technology.
Environmental issue:
Pollution is one of the important challenges for Thermax Ltd, the impact of the business is very large, and with one example, it can be possible to point that how the pollution is effecting on the employee’s health of this energy industry that creates a greater impact on the coat and loss productivity of the company. Thermax Ltd is situated in heavily polluted areas such as their main difficulty is hiring employees as resting workers. Waste disposal of Thermax Ltd is another main issue of Thermax Ltd Company because this is an Energy company. Hence with no proper ‘disposal resulting in foul smells, leaching into water supplies and air pollution’.
Strategy for resolving the issue:
To mitigate the environmental issue of the company there are many steps which can be taken:
Install renewables: Renewable and clean energy systems, such as wind-solar, wind, water, that can reduce the bad impact of the environment, specifically the electricity bill of this company. A variety of states and incentives are made to install renewable energy.
Reduce, recycle, and reuse all usage materials of the instruments in the business facility that must be shipped and produced then fully disposed of, which affects the Company’s environment.
“Consider whether any stakeholder group would be adversely affected by the proposal.”
Technological advancement proposal is good for everybody related to the company; however; it will affect the stakeholder that is director of Thermax. As if a company will modify its whole strategy, then they have to replace the old equipment with the new one for which a huge amount of money will be used for this purpose. On the other hand, new employees are required to recruit from a technical background who will effectively perform the work. However; in this chase, the employees will take huge money from Thermax. All these things are very much costly as per the director of Thermax, moreover; Thermax has to give proper training to its old employees to make them understand about the function of new equipment (Christodoulou and Cullinane, 2019).
On the other hand, to mitigate environmental issues, they have to modify their workplace such as in exhaust places they have to use such equipment, which will mitigate pollution that is very much costly for them. On the other hand, it will affect heating places, as all equipment they have to replace for which they also have to use renewable sources is very costly. In a way their overall profit can reduce for some time, moreover; to maintain CSR they have to make some campaigns in social sites and in the workplace, which may reduce the work time of employees. As the implementation of modern technology is costly, hence it can make an impact on shareholders, clients, suppliers, and manufacturers, which is an expensive framework for Thermax. If a company introduces a new strategy then they have to discuss this strategy with their shareholders or stakeholders, in this case, the problem is that many are there who will not agree with this management, hence; a company can suffer losses.
Defend proposal and strategies of by explanation:
The requirement of stage 1:
Thermax Ltd gets many benefits from comparative advantages those are:
The most important benefits are Marketing purpose: Developing a ‘competitive advantage’ refers to that for Thermax Ltd. will become ‘recognized in the marketplace’ as the best.
The advantage is the potency that the brand name is normally a marketing effort. . However Qin et al (2020), suggest that customers will keep interested to listen about the newly launched product of the company just because consumers recognize the particular company as a leader of the industry. As per the opinion of Tan et al. (2017), this especially adds efficiency to marketing efforts.
A proper reputation a company grows ‘as an industry leader’, other competitive companies of that particular company (Thermax Ltd) will properly express a particular value that creates a partnership and can be improved by both companies standing in the marketplace. The causes of competitive advantage vendors and developers must come to the company and express an interest in doing business with a particular company such as Thermax Ltd. It must increase the quality of the selected options of Vendors, which can help improve the product quality in the marketplace.
While a company establishes a huge competitive advantage for the supported services that can dictate the own price of the company, it develops a huge reputation of offering the ‘best price of the particular industry’, which allows the company to ‘charge more for the company’. If the company sells a product with the best service quality then the manager can ask for an increase in the product price than the huge competition just because of the reputation of the industry as a leader which can create the feeling between their consumers, that whatever about the price offered by the company.
A huge reputation as an organization leader that can create huge demands in the marketplace where the company recently does not offer any services. It is very important to make a plan for the company’s growth by monitoring the market to ensure that the management of the company is not quickly expanding.
The requirement of stage 2:
Tracking and creating against a final operation plan is a very essential ‘management tool’ for a company. As per the opinion of Tan et al. (2017), the most important thing is to think about the missing relationship of these plans in the future. Another most important thing is the result of the last year and what should the company do in the coming year? All of this thinking is good in tension. Additionally, if the company has no clear picture of the future looks of the company that is always ‘more reactive than proactive’. Although within 3 to 5 years of the long term the company;’s view should be provided information to ‘the annual; operating plan’. The final plan of their business will become a stepping stone for the achievement of the company’s goal.
For the ‘strengths and weakness,’ the first point is needed to focus that no one person knows the business procedure of the company better than the management department of the company along with the owner of the company. However, Qin et al (2020), suggest that additionally, the management of the company leverages the capability strength, and the most important discussion point is that plan for totally closing the capability gap of the organization. Using strategy creates greater awareness of the activities that can help to get a successful come of the industry.
The management department should know about what will be the standard of the company after 5 years. However, Qin et al (2020), suggest that there are better ideas of various kinds of capability essential to achieve the goal of their company. Strategy refers to decisions in an organization based on the design. Hence, with the proactivity of new skill pursuing and gaining essential knowledge, prepare the industry to intended in the future and increase the success.
Stage 3: for the stakeholder purpose that they can help to reduce or eliminate the risk, they will help to reduce the risk on from the growing company, when it is initial requirements, constraints and project needs of a particular project. However, Qin et al (2020), suggest that stakeholders might bring challenges to the meetings. Eliminate the challenges and essential to discuss the plan to eliminate all of those issues that hugely increase the success of the Industry. However, Qin et al (2020), suggest that the experience of the stakeholders will help in this process.
Stakeholders have good knowledge about the recent industrial process, industrial insights, and historical information. Maximally the team members will insight the company or sometimes it can be possible that the whole project to be longer than the entire project team. It is essential to include every key stakeholder when documenting and gathering the requirements to avoid the missing of project deliverables.
Conclusion
It can be concluded that Thermax limited has several points to modify and to give a clear view PESTEL, SWOT, and Porter’s model has been discussed by which people can understand the competitive advantage of Thermax. Moreover, its issues, strategies, and impacts on stakeholders have also been discussed in the report.
Reference List
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