Example Of Report On Discution Of Stategic Management And Evaluation Of The Body Shop Strategy

1. INTRODUCTION:
The strategic management of an organisation is considered to be the corner stone of success. Major Managers take the responsibility to unify a strategy that provides a coherent perspective on what the company aims to achieve. However, a number of corporate have been in serious financial problems and lost their business because of errors in their strategy. This paper aims to critically discuss the meaning of strategic management. Additionally, in the light of this, a critical evaluation will be applied to the Body Shop’s strategy. Such a study will be useful for the Body Shop in developing their strategy and analysing the options. This paper will be divided into two parts. The first will critically present the meaning of strategic management and the concepts related to it. The second part will focus on evaluating the Body Shop case based on the conclusions drawn in the first part.
2. DEFINING STRATEGIC MANAGEMENT:
Literature review offered a number of definitions on strategic management. Grant (2008) defines strategy as ‘the means by which individuals and organisations achieve their objectives’. In fact, such interpretation does not distinguish between strategic management and detailed plan, although they are both means of achieving objectives. Another definition provided by Johnson, Whittington and Scholes (2011) states that ‘strategic management is the long term direction of an organisation’. In fact, in this way strategic management is distinguished from the other types of management, such as operations one, as it highlights the main character of this kind of management, which is the long period. However, it can mislead a reader, making him/her believe that strategic management is just about the long-term goals. Another definition of this concept is:
‘The determination of the long-run goals and objectives of an enterprise, and the adoption of sources of action and the allocation of sources necessary for carrying out these goals’. (Chandler, 1962).
This definition provides a good explanation of the term ‘strategic management’ for a number of reasons. Mainly, it can be interpreted so that it gives both broad view and logical flow of three key elements, which are long-term goals, adoption of action and allocation of resources.
3. DIFFERENCES BETWEEN STRATEGIC MANAGEMENT AND OPERATIONAL MANAGEMENT:
Operational management is a kind of management that deals with individual business functions or operations concerned with each role they play in the organisation as a whole (Greenley, 1989, p.7). There are a number of differences between operational and strategic types of management. First, strategic management concerns the overall objectives and shapes a framework for the operations management, for this reason having ambiguous character (Greenley,1989), while the operations management concerns choosing the tactic practice and justifying the procedure that leads to achieving the overall objectives (Hannagan, 2002). Second, the corporate have to commit to decisions made by strategic management, as they offer a long-term vision, while the operations management can be amended and changed if needed (Greenley, 1989).
4. LEVELS OF STRATEGY:
Strategy in a company or an organisation can be divided into three main types, each of them dealing with its own problems:
Corporate level strategy: its main issue is determining the scope of the corporate or organisation in general in addition to the distribution of sources.
Business level strategy: it concerns the way division characteristics of strategic decision of a corporate would gain competitive advantage. For example, innovation is one of the business level strategy functions. (Wailcer and Robert, 1987)
Operation or functional strategy: it focuses on operating resources, people and processes to effectively meet the corporate objectives (Johnson, lbid.).
5. Characteristics of decision making:
In order to make correct decision, it is noteworthy that managers use knowledge and information provided. Johnson (lbid.) emphasises that usage of the current information and their different types is especially beneficial. In addition, Johns and Hill (2009) claim that in order to make better use of the information provided, it is vital to control emotions during making decisions. They mention that cognitive biases, prior hypothesis biases and escalating commitment can lead to systematic errors. However, in some situations managers base decisions on their feelings, especially when there is lack of evidence. Johnson, Whittington and Scholes (2011) say that intuition is in some cases beneficial, especially when fast decisions are required. The final characteristic distinguished by Mulcahy, Komisar, Sorrell and Campbell, Steven (2010) is that it is critical to examine and discuss at the same time a number of alternatives so that the decision is made in the context of research portfolio.
6. BASIC VOCABULARY:
Mission: represents the main reason for a company to be in its business (Bartkus, Glassman and McAfee, 2006).
Major goals: the particular aims the organisation wants to achieve in medium and long period of time (Hill and Jones, 1995).
Objective: presentation of financial terms the organisation plans to achieve (Johnson et al., 2011).
Strategic capabilities: creation of a competitive advantage by the way of using skills (Thompson and Martin, 2005).
Business model: represents a brief summary of the company’s product, its target audience and market, as well as the compelling reasons to purchase products on offer (Thompson, lbid). However, some definitions combined business model and revenue model concepts, like the one provided by Johnson et al. (2011).
Controls: means, with the help of which progress towards the stated objectives and targets is monitored, measured, and changed if necessary (Thompson and Martin, 2010).
Strategic position (analysis): is focused on the way the resource capabilities, external environment, and the stakeholders’ expectations affect the strategy of an organisation (Johnson et al., 2011).
Strategic choice (creation): it is the process, in which the most suitable decision is made and the method of strategy work is chosen (Johnson et al., 2011).
Strategy in action (implementation): it is dedicated to formulation and implementation of the strategy (Johnson et al., 2011).
7. EVALUATION OF THE BODY SHOP STRATEGIC MANAGEMENT:
The Body Shop mission statement is about dedicating business to social and environmental responsibilities. On the whole, it can be characterised as precise, clear and inspiring. It also specifies the Body Shop competitive advantage over the other self-care and cosmetic products companies, and it states the positioning as a niche marketer for personal care products made from natural ingredients and packaged minimally. With this aim, the company succeeded to position its brand as an ethical retailer. As evidence, in 2004 the Body Shop was the second trusted brand in the UK. The company allocates resources to fulfil its objectives by finding suppliers from developing countries, mostly from Asia, Africa and South America. Under their community trade initiative they not only give the opportunity for such communities to benefit from their resources, but also provide a chance for the company to gain the ingredients needed for production with low cost. Additionally, the company set up a number of campaigns to promote some social and environmental issues, such as products testing on animals, human rights and recycling plastic and paper. However, the company should focus more on promoting its products to increase its sales. A study conducted by Green and Peloza (2011) on how CSR creates value for customer found that the largest number of customers would consider the functional value of a product before their purchasing decision, rather than emotional or social values.
8. CONCLUSION:
Strategic management is an essential part of any organisation, as it justifies the long-term direction and goals. This report is an attempt to highlight theories and discuss concepts related to strategic management and evaluate the Body Shop strategy in particular. To fulfil these aims, the paper is divided into two main sections. The first demonstrates the meaning of strategic management and discusses the other related concepts. The second evaluates the Body Shop strategy in the light of conclusions drawn in the first part of the report.
9. RECOMMENDATIONS:
On the basis of the conducted research, it is possible to state that the Boda Shop Company has a strong competitive advantage in the market. At the same time it is recommended that the company should reduce expenses on campaigns and focus on promoting its products.
10. BIBLIOGRAPHY:
Bartkus, B., Glassman, M., and McAfee, 2006. Mission Statement Quality and Financial Performance. European Management Journal, 24(1), pp.86-94.
Chandler, A., 1969. Strategy and structure: chapters in the history of the American industrial enterprise. Cambridge: The MIT Press.
Dupont, D., 1969. Strategy and structure: chapters in the history of the industrial enterprise. Cambridge: The MIT Press, pp.1-51.
Grant, R., 2008. Contemporary strategy analysis. 6th ed. Malden: Oxford Carlton Blackwell Publishing.
Green, T., and Peloza, J., 2011. How does corporate social responsibility create value for consumers? Journal of Consumer Marketing, [online] Available at: Emerald [Accessed 29 October 2011].
Greenely, G., 1989. Strategic management. Cambridge: Prentice hall international.
Hannagan, T., 2002. Strategic management. Wales: Creative print and design.
Hill, C., and Jones, S., 2008. Strategic management an integrated approach. 3rd ed. Boston: Houghton Mifflin Company.
Johnson, G., Whittington, R., and Scholes, K ., 2011. Exploring strategy text and cases. 9th ed. Essex: Pearson education limited.
Jones, G., and Hill, C., 2009. Strategic management essentials. 2nd ed., China: Cengage. Learning.
Mulcahy, A., Komisar, R., Sorrell, M., Campbell, B., and Jobs, S., 2010. How we do it: three executives reflect on strategic decision making. McKinsey Quarterly, 2, pp.46-57.
Thompson, J., and Martin, F., 2005. Strategic management awareness and change. 6th ed., Singapore: Seng Lee Press.
Wailcer, O., and Robert, R., 1987. Marketing's role in the implementation of business strategies: a critical review and conceptual framework. Journal of Marketing, 51, pp.15-33.