Theoretical/Conceptual Approach And Analysis
Strategic management is the process of formulation, implementation and assessment of long-term and short-term objectives that is intended to drive the company or organization ‘growth. Lego has been inventive, family led and high development firm in world of toy industry that manufactures its products in many industries such as USA, Switzerland, South Korea, Denmark and Czech Republic. Situation of organization improved in year 2008-2009 after strategic uncertainty and series of poor performance. In this regard, Lego was required to formulate their strategies by entailing different aspects of strategic management. In this assignment, the concept of strategic management is implemented to identify the transformation at Lego. The strategies of Lego were long-term in nature and they expanded at both global and local scale (Hill et al. 2014). Lego adopted strategic development in order to gain competitive advantage over its competitors and to gain increased market share. With the growth and increasing complexities within organization, control and management becomes increasingly necessary. Due to pressure of competitive environment, vision of organization started giving ways to emergence and learning (David and David 2015). Adoption of new strategies by Lego led to abandonment of existing and strategies that they were practicing. Analysis of case study provided with the facts associated with strategy implementation if Lego and how it has driven success within the organization.
Product development is organic growth strategy that involves addition and substantial modifications to present products within existing groups of consumers to diversify increase their market penetration. This is perhaps done by extending the product life cycle. When time become an increasingly crucial competitive issue with contraction in product life cycle, strategy of product development becomes significant (Rothaermel 2015).
Combination strategies- An organization with wide range of business units and products has the possibility of pursuing a number of different strategies such as market development, product development and innovation. Competitive strategies of business can be improved by various organic growth strategies. Organic growth strategies are adopted by organization for increasing their market share and increase customer retention by consolidating, specializing and concentrating on their brands. However, the planning gap is not adequately closed by such strategies. A new strategic perspective involves higher risk growth strategies. An organization can innovate in various forms such as new product, process innovation and organizational change (Eden and Ackermann 2013).
Three strands are involved in creation of strategy that is planning, vision and emergent strategies.
Strategy Matrix
The matrix depicts that there are various approaches to strategy formulation. An organization intending to enhance their business growth can adopt some various strategies such as innovation driven, improvement driven strategy, market driven opportunity strategy and capability and competency exploitation. Some of key drivers of strategy are resources, opportunities and competition and culture of organization can act as change inhibitor. Feasibility, desirability and appropriateness are essential criteria for evaluation of implemented strategy (Maoz and Ringert 2016). It is certainly possible that strategy alternative can be at international level rather than confining to one single market or country.
Lego group was compelled to perform reformulation of their long-term and short-term strategies in order to sustain in stiff competitive market of toy industry. It can be depicted from the analysis of case study that Lego adopted strategy of product development that led to mammoth variations on its basic product themes. Some of initiatives that was taken by company in lieu of brining strategic change for dealing with issues involves focusing on capital growth of structure, innovation, focusing on distribution (Brulin and Svensson 2016).
Production and procurement strategies were reviewed that led to outsourcing of manufacturing process. The outsourcing of manufacturing process was done to exploit their capability and become more competent by providing customers with wide range of products. Te feature of decisions taken is that it should be capable of satisfying value of various stakeholders such as suppliers and customers. Buying habits and global taste formed the basis of new ideas development that provided organization with biggest potential for growth (Freeman and McVea 2015). Company in gaining competitive advantage over their competitors adopted differentiation and cost leadership strategy. Over their supply chain, Lego group adopted strategy of cost reduction and it made latest technology products by playing with new age and digital media. Strong links was deliberately maintained with suppliers for emphasizing on quality and engendering competitions (Ethiraj et al. 2013). Lego took technology as enabler leading to new age extension of products for increasingly heir sales and revenue. In this regard, it can be said that organization opted for innovating their products by embracing technology. Furthermore, group also adopted digital strategy for development of online multiplayer game known as Lego Universe. Hence, technology factor played a significant role in undertaking strategy. Customer satisfaction is regarded as suitable strategy for increasing sales of company.
Conclusion:
From the analysis of case study of Lego group, it can be inferred that organization adopted different combination of strategies for sustaining in toy industry. Combination ranged from new product development to adopting digital platform, diversification and outsourcing. Therefore, various themes were incorporated in strategic creation. Present perspective and future perspective formed the basis of creating and formulating strategic change. Review based view of organization would help in ensuring successful development in future. Brick concept of Lego will help in improving efficiency and effectiveness of its business that help in achieving sustainable competitive advantage. However, experimentation with new products and activities posed company by bringing some problems that has made it vulnerable to some competitive threats. For having sustained market, it is recommended to the group to make some structural changes in the company that will involve growing trend in technological use. It will enable organization to boost their sales by gaining response in target market.
Discussion
An organization is regarded is successful if the expectations and need of stakeholder are met. The case study for analysis is success of Ajisen Ramen and identification of factors that has resulted in success of Japanese restaurant. Ajisen Ramen is one of the biggest fast food noodle restaurant that sells Japanese ramen noodle soup in China. Organization has been witnessing lower demand for noodles in its home market that is China due to declining birth rate. Business that needs to shift their target market to another country or place are required to formulate and adopt strategies at international level An organization is required to reprioritize their competencies if they intend to become more successful (Kramar 2014). Firstly, Evaluation of critical competencies is regarded essential for competitive and strategic success and secondly, it is required to be ensured by organization about the process of organization at an appropriate level. Over the past decade, the rapid expansion of Ajisen Ramen in China has been the resultant of well-developed management system and quality control that has assisted in replication of original taste and standardization of ingredient in all main outlets operating in China. Formulation of strategies regarding pricing of products should be done by talking into consideration strategies of their competitors. However, capturing of market share requires organization to make investment in such factors that is unique to organization and helps in gaining competitive advantage (Peteraf et al. 2014). Success of organization can be explained by discussing of various factors as depicted in the case study.
It is declared by product life cycle that critical strategy that critical strategy that can be adopted by multinational corporations is extension of its market share when driving its business growth from another region or country. An organization is required to take benefits of regional gaps in supply and demand of customers. The essential factors for competitive and corporate success by concentrating on issues related to performance of company. More emphasis should be laid on critical performance measures that reflect key success factors of stakeholders. Efficiency and effectiveness of organization is encapsulated in several measures such as financial, customers, growth and improvement and internal process of organization (Coghlan et al. 2015).
It is required to recognize while measuring effectiveness of business that quality does not remain same for every customers. Organizations are required to determine the factor that will generate repetitive business for them and increasing revenue. A basic competitive posture is required to be tailored by organizations such as restaurant so that local conditions are being met. Performance of organization is dependent upon tailoring of their strategies that is suitable for acquiring business. Business is considered as successful if their customers are satisfied that will help in increasing customer retention and they are able to provide customers with number of new services and wide range of products (Wheelen and Hunger 2017).
Conclusion
The financial and strategic success of organization is dependent upon various factors such as opportunity provided to business; revenue generated by business, execution and associated costs. Effectiveness of strategy depends upon its execution and opportunities. Financial and profitability performance of company is dependent upon costs incurred and revenues generated by organization as a whole. Cost is determined by efficiency of strategy execution and revenue by execution of strategy.
Ajisen Ramen has been following a prolonged strategy of constant renewal and development of concepts, quality and cost control that has helped in maintaining high quality standards and efficiency maintenance. Regular networking and expansion in international market, consolidation through joint ventures has helped in capturing market and increasing market share.
From the above triangle, depicting holistic framework of measures of success, the two main factors that has led to rapid growth and success of Ajisen Ramen involves environmental factors and efficiency measures. Under environmental factor, the perceived value of services and products has helped in gaining market and acquiring customers. Cost control measures of efficiency related to standardization of reduction is another factor adding to competitive advantage of restaurant. Therefore, efficiency and environmental factors are the main reasons attributable to success of business of Ajisen restaurant.
Several reasons are associated with the success of noodle restaurant in Chinese market. Perception of Chinese consumers regarding Japanese ramen noodle to be of better quality has helped restaurant in attracting and gaining market share. It was perceived by consumers that ramen noodles are a healthier casual food compared to other Western style fast food. The factors that attributable to gaining competitive advantage of Ajisen Ramen over their competitors is the business model that involved unified methods of production and unified methods of purchase of raw materials that assisted in making noodles taste consistent across all outlets (Stead and Stead 2013). Moreover, the ambience of Ajisen restaurant was distinctive in terms of designs of outlets using lantern style. Cost advantage is another competitive advantage of Ajisen due to standardization of products. Product standardization leads to prompt serving of customers in every outlet. Ajisen Ramen enjoyed rapid growth because of Chinese customer’s perception. Therefore, from the above discussion of various factors, it can be inferred that success of restaurant has depended upon many factors ranging from customer perception to products standardization. Expansion of factory capacity in China is one of the strategies of increasing their business in country (Doppelt 2017). This factory capacity will helps in manufacturing and selling of packaged noodles that will push up sales and total revenue. Cost leadership strategy was pursued by restaurant in terms of standardization of products helps in acquiring market share in China.
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Conclusion:
From the analysis of above case study about Ajisen Ramen, it can be concluded that there were ample of reasons associated with success of business in China. Cost control strategy, outlets designs with provided with distinct style and customer perception of Ramen noodle has been responsible for its rapid success and growth in Chinese market. it is projected that growth of noodle restaurant chain will be encouraged due to wealth development and organization among population of China. Ajien Ramen has the likelihood of experiencing wider customer base due to its string brand name that is branching out to other catering ventures.
The case study is about general electric that witnessed transformational change brought by several reasons. Change at General electric was mainly because of many ongoing issues and introducing a transformational change has helped organization in becoming strongest company of United States. Analysis of case study has been done by discussing about various forms of strategic change that leads to transformation of organization. Transformational change within organization is designed to be executed organization wide and enacted over a specified time. Change programs are implemented by organization to build and strengthen their capabilities and changing their behavior. However, transformational change at organization also poses them with difficult challenges as many organization and their employees are resistant to change. Restructuring and changes at General electronic was done at three stages that is technical, cultural and political (Thompson et al. 2014). Organizations are faced with some challenges while introducing a change within organization at strategic level.
For many organizations, change in culture is highly desirable. Hence, a perceived need for change is required when implementing change. The idea of congruency of environmental, resources and value are restated from perspective of change management. Organization is provided opportunities for environment to benefit from continuous improvement and innovation. Success of existing strategies of organization depicts the relative strength of resources of organization. Effective change of management is dictated by ability of organization such as values (Booth 2015).
Strategic change in organization can be driven by many factors resulting from technological improvement and change in leadership style. There are four types of strategic change that affect organization such as service or products, technological change, people and administrative change.
Strategic leadership intends to create strategic change within organization by ability of managers and leaders to envision, anticipate, and maintain flexibility and empowering their employees. Due to growing complexities at global level, it is required by strategic leaders to learn to effectively influence behaviors of human in an uncertain environment. Business process reengineering has helped companies in responding to management of strategic resources and assets in an effective and efficient manner. Internal and external focus is essential for generating successful transformation.
In order to bring strategic change within organization, it is essential for mangers to think strategically and opening to new paradigm and perspectives. At the same time, organization is being challenges with changing all level of change. For bringing effective transformation, it is requite by people to have a clear understanding of their business and organization as a whole. Awakening, envisioning and re architecting are three far reaching strategic programs that have been implemented by General electric (Morschett et al. 2015).
Change in initial phase at general electric was focused on culture of organization that is removing bureaucracy, downsizing and restructuring. A management style based on openness, facing reality and candor was considered desirable. There was corresponding cultural change in organization for generating sustainable high productivity. Grooming and identification of future leaders for organization also formed a part of transformation. Implementation and formulation of strategies required collaboration of successful strategic action with vision of company. Process adopted for making GE to deal at international level helped in leveraging strategic competitiveness that resulted in generating return above average. Radical change in business portfolio was brought by incorporating technologically advanced formats of doing business (Ristuccia and Solomou 2014). There was change in managing development and training approach and lead to abolishment of rigid procedures and rules. Therefore, it can be seen from above discussion that General electric experienced cultural change that resulted in radical changes in portfolio of business.
Effective transformational change at organization comes with few barriers such as political pressures for maintaining status quo, creative thinking exhibition by managers from industry specific backgrounds and difficulties in creation of new competitive strategies. Bringing change within organization requires fundamental changes in the way people worked together, carrying out tasks and making decisions. Employees faced cultural challenge due to this transformational change at GE. Strategic change is associated with change in cultural shift and with increased involvement of employees in decision-making process required delegation of power and decentralization (Maoz and Ringert 2016).
Organization with the challenge of creating a new cultural template in order to facilitate new operating model of bringing change. Renewed emphasis of organization was reflected on agility, acceleration and customer focus. The operating rhythm with change implementation became more responsive, agile, focused and nimble. In this regard, GE shifted to annualized process of strategic planning. Culture has the likelihood of becoming obstacle to change when required focus is not given. Innovation has become the priority for General electric and operational excellence of organization has made them susceptible. This requires figuring out new moves to mainstream. Employees are required to be empowered to sustain cultural change within organization. It needs to be ensured by managers of organization that the implemented change is also done in accordance with external and environmental pressures (Walsh et al. 2015).
Conclusion:
Perseverance and innovation is required to contend transformational change within organization. It can be concluded from above analysis of case study of General electric that making transformational change within organization brought various positive benefits with some barriers experienced while implementation of cultural change. Transformational change at General electronic is considered phenomenal as it brought continued success to organization. Organization observed transformation in way of doing business due to the change implementation. The existing weakness in organization can be teased out by encouraging robust straight talking with employees so that any resistance to such change can be overcome. It is required to harness setbacks in an entrepreneurial fashion and accountability must be accepted by people in an incentive way that depicts that they are involved in the change process. The transformational change within organization should be managed by acquiring knowledge that they gained form witnessing best performers of world.
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