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Introduction

The main aim of any business is to increase productivity and to facilitate profitability. This is done through hiring and training skilled employees, adopting the most efficient technology, and capturing a considerable market share. However, side-effects are common and might affect the business at any time or growth stage. Therefore, it is the responsibility of business management to identify the key strategic issues and to manage them accordingly. Managing strategic issues offers security to a business in terms of market viability and profitability.

Hartley’s is a jam manufacturing firm, which is hundred years old. It faces harsh challenges, which include the need of expansion in a shrinking market, new market diversification, and employment of top quality management. In an attempt to comprehend these challenges and to offer an appropriate solution, it is crucial to review the main strategic issues facing the firm.

Internal Strategic Issues

This refers to those particular issues that affect the internal operations of the firm, which the firm has control over. One of the Hartley’s internal strategic issues is lack of adequate capital. The firm needs money to facilitate its diversification efforts. It only manages to conserve its little income and strives to diversify into spring water and sauces. Disappointingly, Hartley’s is scared of involving investors who might generate the required capital. This is a key issue that needs a strategic plan. This is because a firm with no capital has low potentials of growth and it is bound to collapse any time. Moreover, it cannot diversify or attract new markets, which are the main opportunities for growth.

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Culture is the second strategic issue facing Hartley’s. The firm is wary of changing the culture that has been nurtured for a hundred years. Albert, a great-grandfather of Hartley’s, founded the firm in 1881. From that time, there have been no attempts to change the culture, particularly the way of doing business. Change is inevitable, and the more the firm preserves the ancient culture, the more the business risks. This is a key issue for the firm because as the technology grows and people get oriented to new things, the firm must adjust to meet the customers’ expectation and to fit in the current market. Changing the culture is the Hartley’s strategic issue.

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The third strategic issue experienced by the firm is lack of sufficient management skills. Fred Hartley’s, a grandson of Albert, joined the firm as soon as he completed school. He followed the leadership of his father in the year 1994. This means that Fred had no previous management experience and hence, running the family business was obviously a tough task. Experience is extremely important when it comes to management of a business. This is because an experienced person is knowledgeable of the business environment and issues that may affect the operations of the firm. That is why inexperience of its managers is another issue that Hartley’s is facing.

Another strategic issue affecting the internal operations of the firm is fear to risk. The firm fears to risk in more profitable segments such as marmalade. Many mature and wealthy customers purchase marmalade, making it a more attractive product. The product is also cheaper in terms of production. However, Hartley’s is scared of dedicating resources to this market due to risks. Risk taking is a key strategic issue at Hartley’s. This is because refusal to invest or acquire a new market is a missed opportunity that costs a lot to a growing business.

The firm recently became the only supplier of British cranberry sauce to ocean pray, which is the world’s largest cranberry producer. This deal enabled the firm acquire 90% of cranberry market share overnight, while increasing its sales by three million pounds. This marks a considerable progress for the firm as its growth and expansion in future is guaranteed. The strategic issue here is that the firm is in a heated pressure to maintain that level of productivity in the long run.

Hartley’s has a great potential in the condiment industry. This is because the condiments have realized a large sales volume for the firm. However, the firm seems to let go of that opportunity. They have a problem of conducting a market research in the condiments’ viability in the market that will see them strategize on how to capture maximum sales. Their key strategic issue is market research, which is essential for businesses striving to survive in a competitive market.

The other strategic issue that Hartley’s faces is stagnating profitability despite the successful diversification. Businesses continue running due to the fact that they are growing both in terms of expansion and profitability. However, this is not true for Hartley’s, which has still profitability despite its efforts to diversify into different market segments. The issue here is to enhance profitability as the firm continues to diversify.

Decision making is also an issue at Hartley’s. This is because all the firm’s decisions are made by the father as the most senior person in the management panel. Furthermore, the firm has failed to employ external directors to sit in the board of executives due to reasons better known to them. This makes the decisions biased and more inclined to the family welfare.

The firm faces a strategic issue of making difficult decisions. It is left to choose between accepting investors in the business and watching the firm as it collapses. Potential investors have approached the firm severally with hopes of being allowed to offer capital, but their applications are declined. According to the management, allowing investors to input their money would reduce the family’s share and jeopardize the company’s balance. The issue here is investment and business survival.

External Strategic Issues

These are the issues outside the firm’s scope of control which affect the welfare of the business. They are unpredictable, and in most instances, businesses are caught unaware. However, such uncertainties can be managed by a business through application of effective planning of strategies. One of the external strategic issues experienced by Hartley’s is that there is low customer preference of jam. Customers tend to prefer supermarket brands for their shopping and, therefore, fail to purchase at Hartley’s. Once customers stop buying a certain product, it becomes more vulnerable to leave the market or incurs unrealistic costs while the company is trying to market it with no sales realized. The issue here is to change the customers’ perception and make them purchase jam from Hartley’s.

Another external strategic issue is the declining jam market. People have stopped eating jam the way they used to, and the management seems to have realized this. Traditionally, an English breakfast comprised of toast and jam, while a sandwich with jam was considered a staple snack. Currently, people are choosing between jam and cereals. Moreover, dietary habits have changed and people are now refusing to purchase sugary products. The sale of jam has suffered a blow, while its market keeps declining since people get more and more health conscious. The issue here is that the market is declining due to dietary changes and availability of alternative products.

Competition is another strategic issue facing Hartley’s. Jam faces tough competition from cereals, crisps, and bars, which customers choose for breakfast at the expense of jam. This has led to reduced sales of jam, thereby affecting the firm’s profitability. Other low-sugar products have also entered the market and seem to overtake jam. The key strategic issue present in this situation is managing the competition, which will leave the firm stable.

Hartley’s might decide to increase the sale of jam, but according to the management, it has a little potential for growth. As much as Hartley’s may try to expand the market for jam, it has limited potential, and this presents a tough challenge for the firm. The main issue here is reinstating the potential of the product to facilitate growth.

Recommendations

Hartley’s has lots of issues to deal with for it to remain competitive in the changing market. The strategic issues presented earlier in this particular discussion can be turned positive or negative depending on the approach taken by the firm. Therefore, strategic management is required for survival and expansion of the firm. This poses a challenge for Hartley’s management as strategic planning measures have to be adopted. To help manage the discussed strategic issues, the firm has to take the measures provided below in this discussion.

Fred should take initiative and strategize on how to raise enough capital necessary for diversification. This can be achieved by welcoming potential investors with open hands. Investors are capable of financing a business, making it viable for growth (Bjerke, Nicholas and Paoli, 2007). Once the firm secures money, they should diversify the market to spring water and sauces, while increasing their productivity accordingly. The finances available should also facilitate new market attraction, which will form a basis for the firm’s diversification. Inclusion of new potential markets will ensure growth and expansion of the firm.

Hartley’s, as identified earlier, has an old culture that has been operating in the last hundred years. This culture was set by the pioneers of this firm, in this case, Fred’s grandfather. The incoming leadership assumed the culture and had no intensions of changing it. This reduces chances for change as any of it would interfere with the firm’s culture. As mentioned at the beginning of this discussion, change is inevitable. In one manner or the other, an organization must learn to adopt a change. This is because the world is changing each new day with advancement in technology and new ways of life. Therefore, Fred should learn how to manage change and afterwards implement it in Hartley’s. He should also realize that the market is changing and to be competitive, new ways of doing business should be adopted (Skudiene & Vilte, 2012). Of course, culture will be interfered with, but for the better.

Fred is a managing director who took over office immediately after the completion of his studying. This showed that the firm does not value experience and that it would rather retain the management positions in the family than attract external skilled personnel. The firm should initiate training programs in the firm that will help prepare managers who are taking over the high offices. Similarly, the firm should learn to accept leaders from outside the family, provided they have the required experience to run the firm. They should be looking for the experienced and those people with diverse knowledge of the market as well as operational techniques. This will facilitate effective decision making, viable risk taking, and market dominance techniques, thereby increasing the firm’s profitability. Experienced managers will also formulate marketing segmentation strategies that will enhance the firm’s competitive ability.

Businesses that grow rapidly are those that have no fear of risking. They tend to capture opportunities as soon as they come their way. Risk taking involves investing in different market segments that the firm has no previous experience in. Fred should not be scared of dedicating resources for marmalade, but instead should adopt the niche market for firm’s well-being. As noted by the management, marmalade attracts wealthier and mature customers, who have a great potential of performing repeat business. This will be a great opportunity for Fred and the firm at large as productivity will increase. Risks that are taken turn to be beneficial to the firm, while those that are denied form a great loss of opportunity for the same firm (Joshi, 2005).

Hartley’s has realized a positive impact on its business when it became the sole supplier of British cranberry sauce. They managed to dominate 90% of the market, which was a great achievement for the firm. Fred should focus on how to maintain this high market dominance. He should consider improving the products’ quality by adjusting their features accordingly. This would help keep competitors on a close watch, while at the same time attract more profitable markets. However, more resources should be dedicated to British cranberry sauce to enhance its sustenance. Market research is also a vital initiative that Fred should take into consideration. This will help the management know where and when to supply their products. It would also help find new potential markets, thereby enhancing profitability through competitiveness.

For a firm to realize growth, it must have an increasing profitability. Diversification is done to enhance profitability. However, this is not true for Hartley’s since they have diversified, but their profitability is stagnant. Fred should take initiative and assess the profitability issue experienced by the firm. He should consider cutting the cost of production, while increasing diversification without interfering with product features. This means that the firm will have the same product features through a reduced cost. Also, he should consider doing away with market segments that have poor productivity record. These segments should be replaced by profitable ones, which will be identified through effective market study.

Decision making is an issue for Hartley’s. Fred should adopt diversified opinions from the firm’s stakeholders before taking initiative. Relying on one person to decide for a whole firm will attract biasness and opinions that are shaped by personal feelings. He should engage all the stakeholders during decision making process in order to allow for contributions from every corner. Decision making should be a process that will allow for situation analysis as well as possible solutions’ screening. When all the firm’s stakeholders engage in the decision making process, reasonable outcomes are expected. This makes it possible to decide on difficult issues, such as the ones facing Hartley’s. The firm should decide whether to attract investors or not.

Fred should realize that customers’ preference for jam is going down and those still interested in it are acquiring the supermarket brand. Therefore, he should find out why this is so and formulate strategies to manage the trend. He should consider repackaging the product to improve its attractiveness. Also, it is advisable to advertise the product to the existing customers as well as the potential ones. Since people are becoming more health conscious, he should consider changing the recipe of the jam.

Fred should find ways to manage the stiff competition presented by other products. This should be done through effective marketing initiatives, such as advertising, personal selling, and e-retailing. This will help the firm gain a competitive advantage and thereby dominate the market. Vigorous marketing will also improve the jam’s potential for growth and increase the firm’s profitability accordingly. Moreover, expansion will be realized and new potential markets will be revealed.

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