Introduction organization, especially when it came to strategic

Introduction

Lee and Sing Company is  a leading family group of company ,  diversified business entity  in the business operations all over the Sri
Lanka.  Lee and Sing was doing well in
last  ten years   and  company leadership was changed after a  decade, for last 10 years company had
expanded in a big way. The company has  ventures in retail, hospitality, healthcare
and entertainment. Being services based player, Lee and Sing had to have
leadership and employees who had different approach from a product based
organization, especially when it came to strategic issues.

Founder of Lee and Sing company  believed in a unified, comprehensive and
integrated plan that is designed to assure the basic objective of the
enterprise, which basically translated to delighting and retaining the
customers by differentiating from the competitors. With the competition rivalry
they didn’t changes strategies, which  results started to show negative trends
quarter after quarter  as well as
throughout the year.

 

Assumptions

1. Competition changed, but the company
didn’t alter its policy towards the competitors.

2. Companies neither expanded nor diversified
and were obsessed only with operational effectiveness.

3. A turnaround was called for, however, the
new management was yet to get a firm grip on the whole organization.

4. Divestment was not even considered as the
company wanted to make their presence continue even though competitive
advantages were lacking vis-à-vis the competitors.

5. Triggering events like New CEO, threat of
change in ownership, for initiation of new strategies was never taken up
seriously.

6. Variables changed but the company was
blindly following the old SWOT and PEST analysis related findings.

 

 

 

 

 

 

Content

1.1  . Lee & Sing had  no latest environmental scanning, blindly following  outdated SWOT and PESTAL

 

A SWOT analysis is a common
strategic planning method that involves identifying a company’s strengths,
weaknesses, opportunities and threats to inform business decisions.  Updated PESTAL &

 SWOT analysis will guide you to  think critically about the various factors
which affected to their stagnated  business and how to take steps to capitalize
on strengths and opportunities, while limiting weaknesses and threats, performing
this analysis, the company will be able to utilize resources more
efficiently, improve operations, discover new opportunities, deal with risks
and occupy a competitive position in the market. so following an outdated SWOT
made issues to strategic management of the company

 

 

1.1
Triggering events of the company were  not adopted properly

Triggering
event is something that acts as a stimulus for a change in strategy or some
sort of a shock to the system to get management to seriously reassess the cooperation’s
 situation.  

 with the arrival of  new CEO, threat of change in ownership, for
initiation of new strategies, performance gap  were  not
taken seriously

                                  

 

 

1.2 How do you think strategic management
related issues got affected due to the change in competition, and the company
didn’t alter its policies towards the competitors?

Competitive advantages are
not permanent. A company should continuously  adjust, adapt and evolve it
competitive advantages and positioning to respond to changes in
customer preference, challenges from competitors, and changes within the
company itself. Competitors as new opportunities and threats may open at
any time.

 

As per the analysis done by XYZ
consultation  , Lee & Sing company
had  not altered  its policies towards competitors  and not focused on change in competition
,  So it 
has become  essential   requirement 
to  critically analyze the change
in competition and competitor challenges 
by doing a Porter’s five forces analysis.

 

Threats of New Entrants

Have a sound  knowledge of market awareness ,Innovation,
new ways of doing things, put pressure on all service ventures, lower pricing
strategy, reducing  costs, and providing
new value propositions to the customers are needed. Lee & Sing  should  manage all these challenges and build
effective barriers to safeguard its competitive edge and face the threats of
new entrants successfully.

 

 

Bargaining Power of Suppliers

The presence of
powerful suppliers reduces the profit potential in an industry. Suppliers
increase competition within an industry by threatening to raise prices or
reduce the quality of goods and services. As a result, they reduce
profitability in an industry where companies cannot recover cost increases in
their own prices.

.

 

Bargaining Power of Buyers

Buyers can also demand higher quality of services or
products, and increase competitiveness by forcing different companies into
price wars. All of these factors end up decreasing the attractiveness of
the industry by
lowering its profitability. Bargaining power of buyers is  strong and powerful, so Lee & Sing should
take special attention to safe guard their profitability as well as the CRM.

 

 

Threats of Substitute Products or Services

A company appears  in all price ranges, with variations in the
levels of service and the amenities. The constant challenge will always be to
get the customers to choose your services over the competitors. With the
technological advancements, the internet makes the overall market to be more
efficient while expanding the size of the potential market and creating the new
substitution threats. So considering the  potency of this industry  it is vital to have a  superb strategic plan   and Lee & Sing  must be  service oriented rather than just being product
oriented.

 

Rivalry among the Existing Competitors

The rivalry amongst
the competitors in the service  industry
is fierce. it will drive
down prices and decrease the overall profitability of the industry. While on
the competitor battle if company lost it may be hard to regain,  So  Lee & Singe should  seek the best prices for the best experience
and the tendency is to reduce the prices to a competitive level.

 

1.3. What can you make out from the fact that
the company neither expanded nor diversified and were obsessed with operational
effectiveness for one long year after John taking over as the CEO?

After carefully analyzing the given scenario clear
identification is  shown that Lee &
Singe have not diversified or expanded.  So
the time is high for them to follow  Ansoff matrix strategies and increase the
business growth.    

 

Penetration

Market penetration strategy is the
preferred route to grow for many businesses because it appears safe .Focus is
on selling more of the existing products to the existing customers to emphasis
is on increasing market share through aggressive marketing promotions. Aggressive market penetration strategies will
increase competitive rivalries in the industry.

 

 Product Development

In product development, businesses continue
to focus on the needs of current customers and the wider customer market they
represent  but they seek to understand their underlying needs and wants
better so they can see opportunities for new products.

 Market Development

It’s a must requirement to hunt  for new markets and distribution channels to
expand the business. Effective market research
and  further segmentation of markets helps to identify new groups of
customers, and also service availability and visibility  on the Internet  through a necessary search engine optimization
create paths for online shoppers  rather
than company only rely on offline marketing ..

 

Diversification

This involves moving new
products into new markets at the same time. In a way which is  risky strategy, but proper diversifying into
new products and service lines can provide an effective path to fast growth, as
you sell more products to existing customers or establish new markets. But it’s
vital to weigh up the risks as well as the opportunities.

 

 

 

1.4. List out four things along with reasons,
you would do as John to turn around the company

 

Turning around a struggling business to a
thriving status is a  complex process, so
will suggest four main strategies to turnaround Lee & Sing company.

1.  
Situation reevaluation

The first step that you need to follow is to
figure out whether your business is damaged beyond repair or not. If not, then
you need to look within the organization to figure out what the problems are.
Only when you reevaluate the situation you can  decide what actions can be taken next, to
achieve this you need to focus on some key areas as below

Service –it
is important to focus on whether the service or the products  you are offering are innovative enough,
unique enough and buyable enough for the consumers.

Customers –
You need to figure out whether your consumers are satisfied with the products
being offered to them and is the right target audience being targeted.

Finance –
Is the cash flow enough to sustain the business’s operations? Do you have short
term financing to stabilize the situation?

Process –
You must fathom whether all your business processes and systems are in place
and working effectively. Without this, business performance can go down
considerably.

People – It may be time to
figure out whether your business is supported by the right people and staff.
Employees play a big role in any organization’s success and hence you may have
to cut down on few who may not be providing a good output.

 

3.  
Strategy redefining

The next step to follow in order to
turnaround the business effectively is to redefine the current strategies are  being followed, though Mr Mark believed
unified, comprehensive and integrated plans  which were not transferred to his brother Mr
John properly and he was depending on outdated SWOT and PESTAL. If the
corporation is on a downward spiral, then one of the biggest reasons behind
this could be a gap in the strategy. This is the step where you can make all
the difference for the future of the organization and give it a new direction.
Revisiting the strategic approach can also make you focused on key areas such
as vision ,Purpose ,Brand ,Mission ,Values of the company . So
redefining the strategies  with the
guidance  of industry expertise will  lead the company to its goals.

 

 

 

3.  Employee retention and restructuring

It’s difficult to
turnaround a company  without talking
about the people involved in it. It is the employees which run a business and
no matter how your finances are, how good your strategies are , if the employees
are  backing it and   not
performing well, there is no way for it to succeed. Now may be the right time
to figure out  who really is offering the
best services and which industry retail, hospitality, healthcare or
entertainment giving contribution to the Lee & Singh group of company and which
industry  are  not contributing as per expectations.

At this step, need to take
the decision of reemploying people, restructuring unperformed companies  eliminating the weaker links and retaining
those who are crucial to your business. To revive a business, it is important
to retain the right people on board  and strengthen potential business sources.

 

4.   Become digital

As the world is moving towards technological
advancements and development, it is important to move ahead with it. Most
consumers and customers these days look online for buying products and services
and the industry demands you to go
digital. Going the digital route is not just the
need of the hour but also the demand of the consumers. Introduce latest
systems, online technologies and online marketing in your strategy to gain the
maximum in the current circumstances. Going digital also gives you an edge over
your competitors and puts you in the league of those who are already gaining
huge profits through online marketing and sales.

The internet offers you a superb opportunity
to reinvent yourself and bounce back hard. It is no doubt that the internet has
changed the world, the way businesses work and the way consumers buy. So to
complete the process of your corporate turnaround, it is important to have a
good website, a strong SEO centric
approach, e-commerce facility
as well as social media presence.

 

 

 

 

 Conclusion and recommendation

The importance of strategic management
 theories  have  been noted several times in this report. A
good performance of a company  roots  from the strategic decisions.  Evaluate
current performance results in terms of  return on investment, profitability, and so
forth, the current mission, objectives, strategies, and policies. Review
corporate governance that is, the performance of the firm’s board of directors
and top management should scan and assess the external and internal  environment to determine the strategic factors
that pose opportunities and threats as well as determine the strategic factors
that are strengths  and weaknesses. Analyze
strategic (SWOT) factors to  pinpoint
problem areas and  review and revise the
corporate mission and objectives. Lee and Sing should  Generate, evaluate, and select the best
alternative strategy in light of the analysis conducted and implement selected
strategies via programs, budgets, and procedures, then evaluate implemented
strategies via feedback systems, and the control of activities to ensure their
minimum deviation from plans. This rational approach to strategic decision
making has been used successfully in leading corporations and results  were oriented.