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Organisational Strategy

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Report on Organisational Strategy

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Introduction

To achieve long term goal a company have to take various actions that is known as organisational strategy (Definition of Organizational Strategy,2018). Combination of all these actions develop a company strategy plan which required years to get complete and engagement of all level of company staffs. Organization taken for this assignment is DMACK, which is founded by Dick Cormack in year 2008 and headquartered in Carlisle, Cumbria, United Kingdom. Respective company deals in auto-mobiles sectors and they offers tyres of motor-sports cars. Topics covered in this assignments are micro environment factors of respective company, position of industry and its internal resources and capability. Along with this, it cover perspectives of stakeholders.

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Main Body

DMACK is a England based motor-sport tyre manufacturing company which is established in year 2008. Respective company is a authorised supplier of tyres in the FIA World Rally Championship form 2011. Team of DMACK have more than 100 years of experiences in motor sports which help them in developing, designing and building a full range competitive tyres.

Organizational strategy is a combination of actions and plans a company which is need to take in order to achieve long term goal. Designing a organisational strategy engage resource and time. It is important for every organisation to develop because through it a company can develop outlines of its mission, vision, strategy and so on (Aubry and et. al., 2012). There are various type of organizational strategies such as Cost leadership strategy, differentiations, focus and so on.

DMACK use focus organisational strategy for conducting day to day activities and achieving long term goal and objectives. In focus strategy a respective company target on a specific segment of industry and ignore rest of them. The focus strategy is of two type- Focused cost leadership strategy and Focused differentiation strategy.

Macro-environmental factor

The factors related with external surrounding which greatly influenced strategies, business success and decision making is called macro environmental factors (Cserháti and Szabó, 2014). DMACK measures such environmental factors with the helps of PESTEL analysis which is described below:

Political Factors:- It includes government actions, regulation, foreign trade policy, labour law, environmental laws and rules. This factors greatly affect business such as current, political stability and impending legislation. In context of DMACK, since this company is headquartered in UK where political factor are stable. So it proves beneficial for in running business more effectively. The respective firm get politic and regulation stability when they operate in various zone like china, Asia pacific etc. this stability is opportunities of the country.

Economic Factors- The economic factors of environment includes currency exchange, inflation rate, interest rates, economic growth, disposable incomes (Eason, 2014). Tyre manufacturing industry is wide industry so it provides opportunities to DMACK to not stuck in one marketplace for serving its products. Respective company offer their tyres in approx more than 70 countries by which they help those countries to enhance their economic positions.

Social Factors:- The changes in customs, age, gender, income, population growth, belief, attitudes, etc. is represent as social factors. This factors basically concern with the cultural aspects, trends and other social factors. Today in modern world, young generation is attracting more towards motor-sport and they are mostly belongs from middle class group. In this regards respective company mainly targets youth for manufacturing its products as per their concern.

Technological Factors:- These factors are those which represent change in technology. It affects marketing process in three different ways that is new ways of producing and distributing gods and services and communicating its target market (Estampe and et. al., 2013). With the change in time and situation, DMACK should use new and innovative technology for maximum production with minimum cost. Such as respective company is using SR(Sumitomo Rubber) technology which help driver in handling their car on slippery surface in effective manner. It is possible due to ContiAdapt adjustable wheels which expand on slippery surface by its sensor technology. It is also important for DMACK to understand technology adopted by its competitors and impact of value chain on customers and accordingly make plan for sustainability and profitability in competitive market. When respective company use this technology, they required more investment which affect cost of production.

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Environmental Factors:- Due to change in need and demand of people these factors arises. They are important because of increasing scarcity of raw materials, pollution targets and others. Before entering into new markets firms need to evaluate environmental standards which are required to operate business. In context of respective company they are using sensor based technology in fuel efficient cars which reducer production of carbon emission and other harmful gases. This would help in preventing eco system from pollution.

Legal Factors:- It includes various factors such as health and safety, consumer right, product safety, labelling, advertising standards, equal opportunities. While doing production of DMACK tyre organisation need to take care of health and safety of their employees. They need to follows all consumer protection laws for providing safety to their workers. The proper copyright should be done for goods with authorised authority. While selling it proper labelling and packaging should be done with products. This helps in creating goodwill and image of firm in market as well as customer minds. If DMACK didn't follow legal rules and regulation they have to give fines or may suffer with some punishment.

Industry Position

To analysis and evaluate its industry position the DMACK conduct Porter's five forces model by which they able to know forces which affect their profitability and other factors, according to that they develop strategies and plans. The application of Porter's five force in context of DMACK are explain below:-

Competitive rivalry:- It means to identify strength and weakness of competitors and make plans and strategies accordingly (Minonne and Turner, 2012). When a company offer same products and services as to competitors then company have more competitive rivalry. Whereas if company offer different and unique products and services then they have less competitive rivalry and able to get more profit. In context of DMACK they have less competitive rivalry because they are manufacturing motor-sport tyre and their are less competition in respective tyre manufacture market. Due to this respective company can gain more profit. Major competitors of respective company are Toyo Tyre, Nordic Tyres and The blockley Tyre company. The SR(Sumitomo Rubber) technology with ContiAdapt adjustable technique is use by DMACK which is consider as most competitive technique.

Supplier power:- It is a power of suppliers how easy for them to drive up price of products and services. Respective Industry have several small as well as large scale suppliers on worldwide basis. DMACK also has some prominent suppliers of alloys, Sumitomo Rubber and other resources required for manufacturing tyres. Relationship of DMACK is effective with their suppliers which reduce the bargaining power of suppliers and help respective company to manufacture products in cost effective way. Hence bargaining power of suppliers is low for DMACK.

Buyers power:- It refers to bargaining power of buyers, how easy they affect the price of products and services offer by a company (Nankervis and et. al., 2016).The major buyers of respective company products are mostly auto mobile companies such as Toyota, Land Rover and so on. Auto-mobile industry is spread and connected globally by which the respective company supply their tyres worldwide. There are various sectors who are customers of respective firm. DMACK supply their tyres in FIA World Rally Championship form 2011. They provide unique quality which reduce the bargaining power of customers.

Threats of substitutions:- It refers to situation in which customers get substitutions of the products and services which a particular company provide. Such as if more substitutes are available of a particular products in easy and cheap way then will be threats for a company. If less or no substitute is available then threaten for substitutions is less. The innovative technology which is used by DMACK to increase its efficiencies of tyres, helps this company to stay competitive. So, availability of alternative substitute related to such technology is rare in market place. Therefore, it reduces the threat which has minimum substitutes because this technology is more expensive as compare to other techniques. So there are very less companies which are using this techniques, hence it can be say that their is less substitutes are available for DMACK tyres.

Threats of new entry:- It refers to threats for a company from new entries in a particular similar industry (Parkinson and et. al., 2012).DMACK is one of the leading company of tyre industry. Auto mobile industry is consider as one of most profitable industry which attract investors from worldwide. These investors support companies which have strong business plan and use innovative techniques and technology in production. This will increase the threats of new entry for DMACK tyres.

Internal resources and capabilities

To analysis and evaluate internal resource and capabilities of DMACK, their management conduct VRIO framework. Through which they determine their competitive potential, rarity of products and service and how they organize their functions and operations. Application of VIRO framework on DMACK is explain below:-

Value- It refers to the resources provided by a company which add value for customers. Through it company can strengthen their values and help them in improving their products and strategy (Pasquinelli, 2014). The value for DMACK is that they have highly developed R&D department, experienced and specialised for their products, it is fastest growing company in field of motor-sport. Along with this value for them is they have very few competitors.

Rarity:- It means when a company manufacture or sell a products and services which is unique and rare form its competitors. Rarity of products occur when a company have valuable resources and capability. In context of respective company they manufacture tyres for motor-sport and supply it in FIA World Rally Championship form 2011. They able to introduce new unique products because their R&D team is every effective and they conduct market analysis on the regular basis.

Imitability:- If a product is different and unique then competitor wants to develop substitute and imitate product for respective product. Sometime imitating a product is difficult because of its special and unique feature due to which their very or no substitute are available. In context of DMACK they produce high quality motor-sport tyres and sell it in affordable price which attract customers because they get best products at affordable price. Due to this their substitute are very less.

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Organization:- It refers to the management system, processes, structure, capability and culture to adopt change of a particular company (Rasula, Vuksic and Stemberger, 2012). Such as how much efforts a company do to introduce new innovative products so that they attract more customers. In context of respective company they conduct effective evaluation of market and make strategies and process according to analysis. They hire appropriate employees which help them in achieving their goal.

Stakeholder perspectives

Shareholder is a person or group of person who have positive or negative interest in the decisions of an organisation. Their are different type of stakeholder in an organisation such as investors, customers, shareholders, employees and so on. Different shareholder have different perspective and interest on organisation decision and goal. In context of respective company is explain below:-

Investors:- Investors refers to a person which invest their capital and fund with expectation of getting future financial and future return (Ruck and Welch, 2012). They can do investment in various type such as securities, equity, debts etc. The perspectives of investors in context of DMACK is that, investors think that respective company should increase their area of productions such as they also start manufacturing of normal bike and car tyres. Which help them to cover more market and able to attract more audiences which help them in gaining more profit and market value.

Customers:- Customer is a person or any business which purchase good and services which is produce by a company. It is responsibility of company to attract appropriate customers so that it help them to enhance their profit and market value (Wilkins and Huisman, 2012). If a company not target proper customers it will affect the businesses and profit of that firm. In prospective of DMACK customers are very satisfied with their products and services. Their customer think that respective company motor-sport tyres are value for money.

So in a company there are different different perspectives of different stakeholders which affect the strategies and planning of a company. All stakeholders are important for company because each of them help company to gain profit and values.

Conclusion

Form the above mentioned points it can be conclude that there are different organisational strategy which have both negative and positive aspects. Through PESTEL analysis company identify its external environment factors and then develop strategies according to it. Porter's five force analysis allow a company to determine their industrial position in market.

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Through VRIO model a firm can effectively judge an identify its internal capabilities on basis of which they can develop plans and strategies for better sustainability. In last stakeholder are important part for a firm and its perspective is also essential to insure inner support to the firm. Which help them in achieving goal and objective in effective manner.

References

  • Aubry, M., and et. al., 2012. Organisational project management as a function within the organisation. International Journal of Managing Projects in Business. 5(2).pp.180-194.
  • Cserháti, G. and Szabó, L., 2014. The relationship between success criteria and success factors in organisational event projects. International Journal of Project Management. 32(4).pp.613-624.
  • Eason, K. D., 2014. Information technology and organisational change. CRC Press.
  • Estampe, D., and et. al., 2013. A framework for analysing supply chain performance evaluation models. International Journal of Production Economics.142(2). pp.247-258.
  • Minonne, C. and Turner, G., 2012. Business process management—are you ready for the future?. Knowledge and Process Management. 19(3).pp.111-120.
  • Nankervis, A. R., and et. al., 2016. Human resource management: strategy and practice. Cengage AU.
  • Parkinson, D., and et. al., 2012. Design Process and Organisational Strategy: A Storytelling Perspective.
  • Pasquinelli, C., 2014. Branding as urban collective strategy-making: The formation of NewcastleGateshead’s organisational identity. Urban Studies.51(4).pp.727-743.
  • Rasula, J., Vuksic, V. B. and Stemberger, M. I., 2012. The impact of knowledge management on organisational performance. Economic and Business Review for Central and South-Eastern Europe. 14(2). p.147.
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