Businesses must respond to change in order to remain competitive. Developing appropriate strategies, which allow progress, is essential. Wilkinson was founded in 1930 as Wilkinson Cash Stores by James Kemsey Wilkinson and has remained largely in the hands of the founding family since its establishment. Wilkinson’s growth places it in the top 30 retailers and is a prime example of a business that has responded to changing customer needs throughout its history. It is one of England’s long-established retailers of a wide range of food, home, garden, office, health, and beauty products.
Recently, it faced stringent competition from its competitors. Wilkinson needed to offset the effects of this offence by identifying new realms for greater opportunities. Over a span of two years it conducted extensive market research that abetted it to create a market strategy designed to continue growth by targeting a new market segment – the student population. However, the segment that Wilkinson opted for was not, in all likelihood, the outcome of a casual decision that the top managers made based upon stark intuition.
The decision was rather dependent upon a formal, systematic, and comprehensive procedure that rationally allowed them to pursue this path. The quest for a competitive advantage in this unique market segment began with Wilkinson’s mission aimed at rapid growth and increased stores across England. The mission is the first facet of the strategy-generating procedure. It is something that innumerable companies delineate to commence the procedure for optimum and sustainable market performance — this procedure is known as the Strategic Management Process.
But prior to exploring the first facet, the meaning and sole purpose of strategic management ought to be highlighted for better understanding. Also through the replenishing advantages that the strategic management process has to offer, one can get an insight into how tasks are simplified and organisational obstacles are prevented. The precautionary measures clearly reflect how challenges are solved. Strategic Management — What is it? In its uttermost theoretical from, the top management’s plans to develop and sustain a competitive adva ntage is known as a strategy.
It is a state whereby a company’s successful strategies cannot be easily duplicated by its competitors [‘Fundamentals of Strategic Management’, Chapter 1]. Strategic management on the other hand, is a process that entails defining the company’s mission, vision and objectives, developing policies and plans — often in terms of projects and programs — which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs [Wikipedia: ‘Strategic Management’]. In simple words, the strategic management process requires consideration in order to be formulated.
However, strategic management necessitates the engagement of managers themselves in the studies to examine internal and external business elements, address the issues at hand, and take certain steps before a strategy can be formulated. Therefore, the strategic management process, as indicated earlier, focuses on enabling a company to choose and implement a strategy that spawns one or several competitive advantages. A company possesses a competitive advantage when it is able to generate more economic value than that of its rival firms.
Economic value is simply the difference between the perceived benefits gained by a customer who purchases a firm’s products or services and the full economic cost of these products or services. The size of a company’s competitive advantage is the difference between its own economic value and the economic value of its competitors. The process of strategic management consists of five quintessential stages that a company must go through to establish a strategy to uphold their competitive advantage. Sequentially, they are as follows: The Purpose of Strategic Management — Tackling Challenges
In search for economic success in the ‘real world’, managers have noted the benefits that a restricted number of companies have reaped due to their execution of operations. The odd reason to this enigma has always riddled managers of other companies who, despite continuous struggle, seem to receive futile results. Strategic management seeks to learn as to why this phenomenon occurs and attempts to prevent such depressing outcomes from reoccurring. The reasons are attributable to multiple organisational deficiencies such as the lack of knowledge on consumer patterns — requirements, spending, perception, behaviour and so forth.
The most thriving managers are aware of consumer desires and it is often through them that they draw the most innovative ideas. Some managers do not take the requisite step of pursuing a fresh idea to create a novelty item out of the fear of making mistakes. This pessimistic temperament often wards off the authentic opportunities that could have prospectively burgeoned higher revenues. The potency of a strategic plan is yet another concern. Managers must possess a potent strategic plan that attests and secures a strong competitive position in the market.
It is of no doubt that a competitive advantage, if treated will earnestness, is the path to long term success thus higher revenues. In contrast, less profitable companies are those that have a feeble strategy for implementation. Managers ought to adhere with uttermost sincerity as far as company standards are concerned. To keenly scrutinise on individual employee performance and take corrective measures when necessary is crucial to success as a single unit. Poor performances should not be taken lightly and thought to be a result of economic crises, fierce competition, rising costs and so forth.
The standards of thriving performance invoke self-realised employee effort. Apart from the aforementioned internal predicaments, the external predicaments may include government policies and deregulations, social values, regional preferences, cultural trends, the cost of labour, the number of competitors, severity of competition, geographical location, demographic density, technological advancements and so forth. The Vital Strategic Management Process — Defining the Mission It is rather brave for a company to ponder upon uncharted territory to compete in — although, this is seldom the case.
A well conceived mission statement exhibits the purpose of a business and the reason for its existence. It stimulates thinking amongst top managers and urges them to voice their opinions for what they best understand will guide and benefit the company. Emphasis on the products to sell, the segment to sell to, and on product differentiation; is a prime concern. Therefore, the most basic of strategic decisions involve defining the business’s current form and aspirations. These are essential so as to pave the path for the company to tread upon.
The intention of this stage is to clarify the vision for the business. For this, managers, sometimes, refer to a vision statement as a sort of shorthand to summarise how they foresee the business down the road [‘Strategic Vision’]. Whilst the company’s vision is a general statement of its intended direction, the strategic mission renders a visual path for it to tread upon. Since decisions about long-term direction fall squarely upon the shoulders of senior officers, the strategic mission nearly always reflects the personal vision and thinking of top-level managers.
Example: Steve Jobs’ correspondence with his vision to surge on a mission to change the world with Apple’s offerings. Exhibit 1: The hierarchy of strategic components. This is a diagram that illustrates the importance of the first three and provides a better understanding – values, vision, and mission. The Vital Strategic Management Process — Setting the Objectives Wilkinson, akin any other company, did not just develop a flourishing strategy that quenched the specific requirements of its targeted group but also, quite closely, linked the company’s overall aims and objectives to it.
In other words, the strategy had to fulfil necessities from both perspectives. There are two major differences in the forms of missions and objectives. Missions are on emotional terms, whilst objectives are on practical terms. To make mere mention of the company’s foreseeable success and to take steps towards the consummation of that success are two different yet interdependent stages. Stage two in the strategic management process is the process of translating the mission into objectives. The achievement of corporate objectives should result in the fulfilment of the company’s mission [‘Strategy Development Process’].
Objectives are the outcome of planned activities. The agenda of what is to be accomplished and the period by which it ought to be accomplished are explicitly stated here. To guide managerial action, objectives are crucial in terms of things like building shareholder value, maintaining superior rates of return, building a strong balance sheet, and balancing the business by customer, product, and geography [Dessler, Gary & Varkkey, Biju. ‘Human Resource Management’]. The workmanship of this particular stage is dedicated to the fruition of the mission statement.
The Vital Strategic Management Process — Internal & External Analysis A key stage in the strategic management process is that of analysing. This calls for methodical examination of the business’s internal affairs and external elements. This stage is significant because the information gained will forge the next stage. In this stage, it is benefitting to gather as much information and data relevant to the accomplishment of the mission. At this point, the needs for business sustainability, its strategic direction and other prospering initiatives; are important to focus on.
Competitive advantage is a strategic goal — as recognised by Michael Porter — much sought after due to the sheer complexity of the business environment nowadays, the number of competitors, the effect of globalisation, niche markets, ever-changing consumer requirements, and the evolution of information and communications. To preserve a position in the market and to rank amongst profitable businesses, managers need to carry out a scrutinising study. And for this, a majority of managers refer to something called a SWOT analysis.
SWOT analysis befittingly suites the purpose of measuring a business’s progress and the appropriateness of its mission. SWOT is an abbreviation for strengths (internal), weaknesses (internal), opportunities (external), and threats (external). Conducting a SWOT analysis will provide a company with a global view of its position in the market. It is widely proven that companies can achieve a competitive advantage by relying on organisational strengths and interacting with the strategic choice so as to make use of opportunities and avert threats or override weakness or both [Aal-Rousan, Mahmoud & Qawameh, Farid. The Impact of SWOT Analysis on Achieving a Competitive Advantage’]. A competitive advantage exists when a company offers the same benefits as a competitor, but for a lesser price or offers benefits that surpass those of their competitors and are justifiable. A competitive advantage, subsequently, allows a company to create superior value for itself and its clientele. Without a competitive advantage, a company has arbitrary reasons to exist. The recognition and utilisation of a competitive advantage is what a company strives for.
Based upon Wilkinson’s analysis, it committed to a market development strategy to sell its products to a new audience — that of students to communicate the added-value of products and services. To serve as the foundation of the strategy, the analysis was carried out with care by undertaking a tedious and bias form of research known as primary research. This type of research involves collecting data first hand by means of distributing forms and questionnaires. The investment in primary data was sensible for it was recent and meaningful. Exhibit 2: A diagram illustrating the various elements linked to a SWOT analysis . Strategic Planning’. It is pertinent to mention that some managers make use of the Porter five forces analysis instead of the more mainstream SWOT analysis. The Vital Strategic Management Process — Choice of Strategy The penultimate stage is a decisive stage in the strategic management process and is crucial to the implementation procedure. The first step towards choosing a strategy is to review the information gained from completing the analysis. This is where alternatives for change are proposed, put forward and evaluated in terms of cost, risk, and success factors.
Hence, the current resources that can abet the attainment of the goals are defined. The various areas within the business in need of external resources are identified. The issues being faced should be prioritised by their importance to the success of the firm. As for Wilkinson, the choice of their strategy posed average risk since it required the business to find and develop new customers. It also carried costs of the marketing campaigns to reach this new group — such as the establishment of stores near the epicentre of academic institutions as distance was an issue for students.
The point of focus was the augmentation of brand awareness amongst students and encouragement for repeated purchases/visits. The Vital Strategic Management Process — Strategy Implementation This stage is the final stage in which the preferred strategy is translated into actions that churn results — by the employment or dismissal of people, building or closing plants, and adding or eradicating products and product lines. Strategy implementation involves drawing on and applying all the management functions: planning, organising, staffing, leading, and controlling [Weihrich, Heinz & Koontz, Harold. Major Principles or Guides for the Managerial Functions of Planning, Organizing, Staffing, Leading, and Controlling’]. Successful strategy implementation is critical to the success of the business venture. If the overall strategy does not work with the business’s current structure, a new structure should be installed at the beginning of this stage. Wilkinson entered a new market segment and capitalised on the factor exclusive to this market segment — the Internet. The student population is well known to make use of the Internet more frequently than any other segment in the market.
The company utilised a strategic marketing move by making it possible to be connected to their targeted audience through the use of technological advancements (i. e. making their products available to them through online stores). Conclusion The aim of this assessment was to measure the importance of strategic management. The strategic management process involved great loads of information that helped Wilkinson to first scan for a segment of potential success and focus on that market segment.
The primary data collected enabled the company to muster unbiased information with furthermore leverage — by distributing questionnaires amongst ‘freshers’ as well. To stimulate the flow of unbiased information, Wilkinson proposed rewards to students for doing so. This was done by rewarding the students with Amazon vouchers. Having found a potentially profitable segment and mustered ample information on various aspects, Wilkinson began making amendments that included the expansion of stores since the findings indicated that 23% of the students were non-patrons due the distance from their universities/colleges.
The layout of the store was allegedly another issue that affected repeated visits. After successful execution of its marketing campaign which included promotional tactics such as providing free goody bags, free sample products, direct mail flyers, advertisements with fun theme, web banners, 15% discounts on online purchases, and gift vouchers; Wilkinson’s findings indicated that brand awareness had risen from 77% to 95% amongst this segment and the regularisation of visits made Wilkinson appeal to the targeted audience.
Subsequently, the adjustments and effort exerted in accordance with the outcome of the information/data collected, studied, and re-analysed; proved its worth. References & Citations 1. ‘Fundamentals of Strategic Management’. http://www. sagepub. com/upm-data/53794_Chapter_1. pdf 2. ‘Strategic Management’. http://en. wikipedia. org/wiki/Strategic_management 3. Chandrasekhar, B. V. N. G. ‘Strategic Vision’. Wednesday, July 27, 2011. http://strategicmanagementmanagement. blogspot. com/2011_07_01_archive. html
4. Strategy Development Process’. http://worldacademyonline. com/article/18/1/strategy_development_process. html 5. Dessler, Gary & Varkkey, Biju. ‘Human Resource Management’. Pearson Education. http://books. google. com. bd/books? id=9eVGNlCtPcC&pg=PA81&lpg=PA81&dq=building+shareholder+value,+maintaining+superior+rates+of+return,+building+a+stron g+balance+sheet,+and+balancing+the+business+by+customer,+product,+and+geography&source=bl&ots=B2OsCKnscP&sig=7znvNJsx892v7CwZoEGHcZqB9kE&hl=en&sa=X&ei=eI0zUYG4DsemrAfhioGQDw&redir_esc=y 6.
Aal-Rousan, Mahmoud & Qawameh, Farid. ‘The Impact of SWOT Analysis on Achieving a Competitive Advantage’. http://www. eurojournals. com/ibba_6_08. pdf 7. ‘Strategic Planning’. http://www. novamind. com/mind-mapping/strategic-planning/ 8. Weihrich, Heinz & Koontz, Harold. ‘Major Principles or Guides for the Managerial Functions of Planning, Organizing, Staffing, Leading, and Controlling’. http://www. usfca. edu/fac_staff/weihrichh/PrinciplesOfMgt12. 13e3-3-08Website1115-09. pdf