Literature Review
Strategic Management is a process which every organization should follow in order to ensure the effectiveness of the strategies developed by the organization. Effective strategic management helps in ensuring that the organizational goals and objectives are accomplished in an ideal manner. It also involves various stages and every organization must focus on complying with the requirements of the various steps in strategic management. This report focuses on the process of strategic management in Watershed Group which belongs to the printing industry and the stages of strategic management involved. This report also focuses on the key factors which ensure the success of strategic alliances which is considered as a key component of strategic management.
It is defined as the constant planning, monitoring, evaluation and assessments of all the necessary tasks which are required by an organization in order to achieve its goals and objectives. The rapid rate of innovation, emerging technologies and change in customer expectations force every organization to think and implement strategic decisions in order to remain successful in the market. According to Jansson and Söderman (2015) this process helps leaders of the companies to analyze the present situation of the company, develop strategies based on the situation, implement them accordingly and analyz the strategy effectiveness. It involves the analysis of business decisions which are cross-functional before implementation. The strategic management process involves examining the strengths and weaknesses of an organization which are internal in nature, formulation of action plans and strategies, execution of action plans and strategies and evaluating the degree to which plan is successful and making changes when the intended results are not achieved. According to AinulAzyan, Pulakanam and Pons (2017) the process requires a commitment towards planning, which is strategic in nature and which also represents the ability of the company to develop and set goals which are both long-term and short term in nature and then deciding the action that are required to be adopted in order to accomplish the goals. It is also defined as a management technique which is used for future planning. The companies creates a vision for long term strategy development which helps in identifying the required processes and allocation of resources in order to achieve those goals. The strategic management process enables companies to enhance and provide support to their core competencies. By deciding a particular strategy, companies can take decisions which are logical in nature and create new goals in a faster manner in order to keep up with the business environment which is changing constantly. This process also enables a company to increase their competitive advantage and also enables them to increase their market share.
As stated by Ronda-Pupo (2015) in context of Watershed Group it can be stated that the process of strategic management is very important considering the competitiveness of the industry as there are multiple organizations which operate in printing industry and the margin for error is very minimal. Therefore it is very important for Watershed Group which belongs to the printing industry that they should apply strategic management in their organization in order to design and implement strategies for their organizations which will help in the achievement of the company goals and will help Watershed Group to remain competitive in the market. There are various stages or phases of strategic management which must be followed by Watershed Group that belongs to the printing industry in order to increase the effectiveness of their strategic management process which is as follows:
Discussion
Identification of the business objectives and purpose- As opined by Grant and Baden-Fuller (2018) the business objectives signify the ultimate results which must be achieved by an organization over a period of time and strategies are designed in order to achieve those results. The corporate purpose and the corporate objectives provide a complete picture regarding the company and regarding its state of achievement in the future. The corporate purpose of Watershed Group is to lead with their expertise the packaging, labeling and printing design industry and serving customer needs is principal line of their business statement which they seek to achieve. The company mission helps in explaining the scope of business in context of their products and markets whereas their business goals define the way in order to accomplish the mission of the company.
Formulation of strategies- As stated by Sambasivan et al. (2013) during the formulation of strategies in order to achieve its objectives, Watershed Group should be aware of its strengths, weaknesses, opportunities and threats. The SWOT analysis is the most effective and popular tool in order to analyze the strengths, weaknesses, opportunities and threats of the company. The strength and weakness of Watershed Group are considered as its internal factor whereas the opportunities and threats are considered as external factors of the company.
The strengths of Watershed Group which belongs to the printing industry is highly skilled, trained and productive workforce, well organized research and development function, efficient marketing networks and high quality products which helps them meet needs of customers appropriately.
The weaknesses of Watershed Group are obsolete and old machinery used in production, outdated technology used in the manufacturing of the products, uncertain future financial position due to economic instability of targeted markets.
The opportunities for Watershed Group are friendly policies of the government related in relation to taxes, exports, duty drawbacks and import substitutions, demand for eco-labeling packaging and demand for more innovative printing solutions.
The threats of Watershed Group are increasing competition, rising costs of raw materials, changes in demand, changes in government policies and regulations and changes in customer preferences.
Implementation- After the formulation of the strategy, the next step in the strategic management process is implementation of the formulated strategy which includes a number of operational and administrative decisions such as implementation of resources, organizational implementation and implementation of functional policies.
- Resource implementation- In order to implement a strategy in the most effective manner, all resources such as financial, technological, human and material must be available to Watershed Group that belongs to the printing industry. The top management of Watershed Groupmust act objectively in nature in order to ensure availability of the right resources at the right time. As opined by Bao (2015) the main role of strategic management is subjected mainly to the areas of operation of physical, financial and human resources and until the availability of the desired resources at the right time, no strategic plan could be put into action. There are various challenges which are mainly faced by the Watershed Group in terms of resource allocation such as scarcity of resources due to their non-availability and costly nature, restrictions of the government regarding sourcing and procurement of raw materials and machinery from other countries and lack of qualified human resources who could utilize available physical resources for proper implementation of the strategy.
- Organizational implementation- A suitable arrangement is required in order to effectively implement a strategy. Neither a strategy nor a structure can be determined without the help of each other and therefore it is highly believed that strategy can hardly succeed without a proper organization structure. It is evident from the example of various large scale enterprise that well perceived and conceived strategic plans of enterprises failed miserable due to absence of an appropriate organizational structure and therefore in order to effectively implement a strategy, an organization structure may require change and therefore Watershed Groupmust be capable to predict structural changes in advance and must accordingly change their organization structure in order to ensure the execution of a strategic plan.
- Functional policy implementation-As stated by Qehaja, Kutllovci and Pula (2017) the designing of policies is very important for the implementation of an effective strategy as a policy is considered as instructions for an action. The formulation of policies helps in channelization of efforts of Watershed Groupin a pre-decided way which helps in achieving their organizational goals. The most vital aspect, the main exercise that is analytical in nature which is involved in the process making of policy is the authority to factor the main compatible and workable strategy. It is not only significant for the managers of Watershed Group to decide to change the strategy in case required, but even it is important for them to determine how to achieve the strategy in the most efficient manner and therefore the organizational managers prepare policies in order to implement the grand strategy. There are various policies which can be developed in order to implement the strategy in the most effective manner such as corporate policies, divisional policies and departmental policies and the policies provides directions to Watershed Group regarding accomplishment of their strategies.
- Evaluation of strategies- The last phase of this process is evaluation and control of the implemented strategies. As stated by White et al. (2016) in context of the Watershed Group which belongs to printing industry it can be stated that the business environment changes constantly and therefore it is very important to evaluate their existing strategies and formulate new strategies as per requirement in order to take advantage of the continuously changing business environment. The main aim of evaluation of strategies is to observe and analyze progress towards achieving the organizational goals and to rectify and modify the strategic plan of Watershed Groupin order to adapt them in to a better manner with the current conditions and purposes and therefore the strategic evaluation is undertaken in order to measure the success of currently implemented strategies so as to realize the main goals of Watershed Group. As opined by Jong-Ho and Hyeon-Wook (2016) the evaluation of strategies in Watershed Group helps in keeping a control on the performance of the organization, provides a feedback of the strategies and policies implemented, helps in motivation of the employees as the promotion and emotion of the employees are based on the evaluation of the policies, helps in evaluating the decisions taken by the managers regarding implementation of strategies and thus enables Watershed Group to learn about various new trends from the evaluation of their strategies. The evaluation process is comprised of multiple stages namely as follows:
- Fixing the standards- The basis which is applied for comparison in evaluating is termed as standards. The process of strategic evaluation compares the current strategy of Watershed Groupwith the best available substitute strategy and accordingly determines the modification rate of the strategy. The standards to be used in the evaluation process can be fixed on the basis of qualitative criteria or quantitative criteria.
- Measuring the performance of the organization under the strategy- According to Vattikoti and Razak (2018) the measurements of the performance evaluation of Watershed Groupbecomes easy when there are adequate standards in advance as well as when there are adequate measurement techniques present. The timing and the period of evaluation is very important for the measurement of performance under the strategy.
- Analyzing the variance in the results- Variance is defined as the difference between actual performance and planned performance of an organization. As opined by Witek-Crabb (2016) if the actual performance of Watershed Groupis better than the planned performance, then the variance is said to be positive in nature and it suggests that no corrective actions are required regarding their strategy, whereas if the actual performance of the Watershed Group after the implementation of the strategy is lower than the planned performance, then the variance is said to be negative in nature and suggests that corrective actions needs to be taken.
- Taking corrective actions- Taking corrective actions is the last step in the strategic evaluation process, which involves making corrective actions in the strategy of the organization in order to improve the performance of Watershed Groupand to increase the effectiveness of the strategy of the organization.
As stated by Yadav, Sushil and Sagar (2014) there is a recognition in the Watershed Group that the competition is moving away from a “firm against firm perspective” to a “supply chain against supply chain perspective” and therefore as a response to this shift, Watershed Group which belongs to the printing industry seek competitive advantage by indulging in co-operative supply chain arrangements in the form of strategic alliances which helps them in combing their own strengths and unique resources and working together with partners to minimize the non-value adding activities which helps in facilitating improved performance. As stated by Zhao (2014) the main focus of all alliance improving efforts in Watershed Group are buyer-supplier sourcing relationships. In order to ensure that both the involved parties remain committed to this form of relationship, mutual benefits much exists in a win-win relationship that is developed among the Watershed Group and involved parties. While the interests of Watershed Group remains particularly strong in these arrangements but it is also widely believed that creating, developing and maintaining of strategic alliances in the printing industry is a very challenging task and the success of such strategic alliances depends on a number of factors which are as follows:
Stages of Strategic Management
Trust- As opined by Kang (2014) trust is a very vital element which must exist in an alliance between two parties in the printing industries since each member is dependent on the other party to achieve their common goals. There should be trust among the members present in a strategic alliance for sharing information which are critical in nature in order to manage the partnership for participating member and in order to believe that the long term needs of each of the partners will be met. Hence, the managers and executives of Watershed Group typically feel that they tend to know where trust of higher level is present or not present in a relationship and subsequently defining and measuring the trust which is involved between the members of the strategic alliance as these are very complex and problematic in nature.
Senior Management Support-As opined by Charles, Ojera, and David (2015) the support of the senior management of Watershed Group for their strategic alliances is also a vital factor which determines the success of a strategic alliance as the support of the senior management provides with both encouragement and also resources such as qualified human resource personnel, time, travel, technology and physical plants to the individuals who are directly involved in the strategic alliance between the companies. The support of senior management is very important in both strategic and operational areas of the alliances. As opined by Siew-Phaik, Downe and Sambasivan (2013) the strategic areas of the alliance comprises of the decisions and actions which affects the long term goals and directions of Watershed Group and their partners who are involved in strategic partnerships whereas the operational areas of the alliance refers to the decisions and actions which affects their short term planning and day to day operating performance of the partners who are involved in the alliance.
Ability to meet performance expectations- The ability to meet the performance expectations also creates a concern in the execution and evaluation of the goals of the alliance as well as the goals of the individual companies who are involved in the alliance. In order to meet performance expectations it is very important to gain access and exchange performance information among Watershed Group and their partners who are involved in the alliance. If one of the company is able to meet the performance expectation of the other partner present in the alliance, then both parties remains committed to fulfill the performance expectation of the each other which helps in benefiting both Watershed Group and their partners involved in the alliance.
Clear goals- The success of the partners present in the alliance depends on the partners sharing a common future vision. As opined by Drouin and Jugdev (2014) the success of a strategic alliance involves the setting up and carrying out of goals which are clearly defined and therefore in order to achieve those goals, procedures which are well defined should be communicated to the managers of both the parties involved in the alliance in a clear manner which will help in the achievement of the defined goals and objectives and therefore in order to meet the performance expectation of each other in a strategic alliance, the parties involved in the alliance with Watershed Group should clearly define the goals and vision for the future.
Need For Strategic Alliances
Partner Compatibility- The compatibility of the partners is another vital issue which determines the success of a strategic alliance. The compatibility of partners is defined as the ability to plan and work together in a manner which is productive and solution-oriented. As stated by Piran, Moradi and Naghdi (2013) compatibility of partners is mainly concerned with two issues namely analysis of working philosophy and style and co-operation and ability of problem solving. In most strategic alliances it is observed that though the operating philosophies of the partners of strategic alliance are similar in nature but the management style of the involving parties differ which creates issues regarding non-compatibility among the partners involved in the alliance.
There are certain barriers regarding successful strategic alliance between two companies in the printing industry. The barriers to successful strategic alliance in Watershed Group are as follows:
Organization Culture-As opined by Tan and Ding (2015) the difference in organization culture between both the parties involved in a strategic alliance acts as a barrier for successful strategic alliance as difference in organizational culture between both Watershed Group and their potential partner can create a clash of culture between the members due to the alliance, which can affect the system of belief of employees belonging to both organization. The clash of both the cultures can also create a new organizational environment with which the employees of both Watershed Group and partner organization may not get accustomed to and thereby resulting into failure to cope with new organizational environment which can act as a barrier to strategic alliances.
Business process re-engineering- As opined by Shujahat et al.(2017) the process of re-engineering also act as a barrier for successful strategic alliances as business process re-engineering involves changing the ways the company do business which may disrupt the operations of the company. Therefore fearing such disruption of their business operations and business performance, Watershed Group hesitates to enter into strategic alliances with unsuitable partners who may not be compatible, as business process re-engineering is very essential for Watershed Group to maintain their competitiveness and growth.
Conclusion
From the above report it is clear and evident that in order to ensure their constant business performances, organizations must effectively carry out strategic management as it not only helps in achieving the goals and objectives of an organization but also helps in increasing competitiveness of the organization. In terms of the Watershed Group it can be sated that strategic management is considered as a very important element considering the level of competition and minimal margin for error. Further, it was also observed that Watershed Group which belongs to the printing industry must focus on developing strategic alliances with other companies belonging to the same or different sector in order to increase their competitiveness by keeping in mind various factors which influence a strategic alliance.
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