Strategic Management Case Study Sample

- PESTEL Strength and Weaknesses
In the fast growing business environment the role of MNC’s has become more important and the target markets are considered to be the developing economies, which bring a great opportunity and motives for international corporations to expand and aggressively grow the market size in a short period of time. Although the incentives and growing needs of population implement the huge needs and more prospects in emerging markets, it is however, becoming more complicated for Multinationals or any other businesses to target the right sized market and make a segmentation of right population. These and more issues are tightly correlated with the recognition of consumer behaviour, a relevant market analysis and appropriate marketing management, which seems to be more complicated nowadays.
Using the PESTEL model, we get to understand that Ryanair Airlines is a capitalist organization that strives on bad environment. The company focuses on delivering quality airline service by the lowest cost per passenger in a bad environment thanks to bad oil prices. ‘The survival of the company is highly depending on the set of the macroeconomic conditions and the it is not of a big surprise that marketing specialists are increasingly refocusing on the emerging markets, and it is a fact that the greatest marketing challenges are those of LDC market places‘and in order to meet those challenges ‘marketers from the developing economies are assigned to evaluate new products’ that will encourage ‘consumption instead of non-consumption. However there are factor to be considered for businesses that are willing to enter to emerging countries, like, the political concerns and economic imbalance, and make the right decisions on marketing strategies to insure profitability.
The PESTEL model explores the political environment on the country of choice. If the political environment is bad, then the risk of doing business also increases. Because of this reason, a company like Ryanair will maximise profit by establishing a business in a risky environment to maximise the chances of getting more outcome. This plan, although risky, can actually yield more returns.
In the last two decades the idea of delivering valuable and attractive products that consumer will consider worth to buy has becomes a vital aspect to analyse by market researchers. Thus, one of the goals of this research is to fundamentally understand the consumer behaviour as a core for developing a marketing strategy in the market, and to underline the visible gaps in brand and quality awareness which build perceptible obstacles for foreign manufacturers and companies with their brands to enter the specific country or countries with same or similar gaps. The key to understanding of buyer behaviour in developing countries and identify brand building issues in the selected economy is usually on the pocket. Good pricing on low income areas and low season is the strategy employed by Ryan air and it pays pretty well for them.
However, the objective was to identify the importance of the customer ‘value’ concept, and to show the ways analysing different aspects that may support the strategy to classify the specific needs of consumer, namely in developing countries. The limited literature related to issues and understanding consumer behaviour in the developing countries is one of the motives to do the research. There are also significant gaps in the studies interrelated to buyer behaviour towards non local brands, their initiatives and willingness to buy and try new products, to find out the dynamics of the factor ‘satisfaction’ in their mind.
- Critically analyse ryanair’s competitive and corporate strategies and their appropriateness for a sustainable competitive advantage. Your answer should include module theories and frameworks. (porters 5 forces) (vertical integration)
Another model that Ryanair can use to improve its performance is the popular Porter’s five forces model. Porter fronted an argument that a nation has the ability of creating new factors for making stable industries. Such factors include skilled labor, technological base, support from government and cultural values among others. Porter’s five forces are a threat of new competition, threat of substitute products and services, the bargaining power of clients, and suppliers’ bargaining power. Several resources need to be transferred in Raynair for the functionality of this model. Labor, both skilled and unskilled, need to be uniformly distributed well in all the plants. In addition, the company uses avenues of advertisement to increase its sales. Such strategies may include using social networks for advertising. However, before venturing into new markets, the company should first strengthen the already existing markets. This will enhance the already existing client base and such base will be of encouragement for venturing in new markets.
In the business industry that Rynair company, there is many risks that the company has to face. First, airline industry is susceptible to economic crisis. In the situation of an economic recession, sales drop because few people consider travelling a priority. Moreover, the pricing falls and so is the demand for luxuries. A company as big as Ryaniar will take time to feel this pinch, but eventually it takes a toll on the company and forces it to have to cut expenditure which usually leads to lay outs of employees. When this happens, employee complaints generate customer dissatisfaction that affects the company negatively.
Another risk is the high degree of competition in the industry. While competition is a good thing for the growth of business, unhealthy competition often cut the company’s profits. Rynair is susceptible to competition from many companies that sell the same product. In addition, the nature of the industry leaves little room for innovation in terms of use of machines that means that the company has to deal with large number of employees and huge budget for employee salaries. To mitigate through this concern the company needs a high level of competency in terms of accounting and record keeping. Sustaining this growth also depends on the level of competency in the firm. Competency refers to the behaviours that individuals possesses or must possess to perform work. Competency, therefore, focuses on the individual’s input and the outcome thereof. Measuring competency requires what is usually defined as competency structure. The competency structure is a framework that defines the company’s expectation on each individual.
Laske (2001) wrote about the learning and growth development. According to them, the growth and development is a framework for quantitatively assessing employee satisfaction, productivity, and relation in the framework of scorecard balance. The learning and growth method emphasizes measures not only as employee’s behaviours but also in developmental terms at work. One way of smart accounting is using technology such as CRM. CRMs are over the edge because they are designed to help a business identify, capture, and retain customers and potential customers. Managing CRM requires keeping data, useful information, and recording details of the prospective customer. The CRM system has made it easy for Barclays to manage the complexity of managing individual customer relationships across multiple channels while steering across volumes of data. The CRM is a highly targeted and event triggered marketing campaign that makes it possible for a company to identify significant changes in customer behaviour that are pointers to income change. The advantage of this system is that it facilitates timely service to customers.
- Explain what is meant by the term corporate strategy. Using module concepts and examples from an organisation with which you are familiar, explain how a successful corporate strategy is implemented.
Organizational strategy’s purpose is for shaping the future for a business. The role of organizational strategy is to create value in the eyes of the customer as well as implementing models that creates values in the eyes of the customers. The organizational design affects the ways in which a company can realize its strategy. When companies grow bigger, they expose themselves to external environments that may be complex and out of line for the business process. The business structures and designs that previously worked become complex to implement. In some cases, the structures and the designs of the business become barriers to the effectiveness of the business in areas such as efficiency, customer service, and employee moral as well as financial profitability. Because of this reason, companies must be able to change their designs such that the strategy for business is not compromised and the goal of profit making is not endangered.
Compared to organizational strategy, organizational design is a systematic methodology that is used to correct non-working aspects of work flow, procedures and systems and realigns the non-working aspects of business such that they meet the needs of the business in the contemporary. The aim of organizational design is the requirement of meeting the business realities and goals. When referring to design, the meaning is the integration of people that handle business process, the technology and the other systems that daily drive the operation of the entire system. In business, a well designed organization makes sure that the design of the company matches its strategy (Morsing & Oswald, 2009).
- Globalization and Internalization
A plethora of definitions of globalization has resulted in ambiguity in the way the term is conceptualized. While there is a general consensus that globalization is the undisputed economic and political phenomena that is shaping modern international political economy, scholars debate on how globalization is defined with regards to different variables that affect international economics. Even though some scholars and policy makers such as Aryeetey Earnest and Allasane Outara argue that globalization is capable of creating a universal win-win situation for everyone, others such as George Ritzer argue that globalization generates an imbalance in the allocation of global resources and development across the globe.
The main differences is that while globalization is a function of many actors, internalization stems from the desire for a company to go beyond its borders.
In a transnational strategy, a firm develops a plan to produce and sell standardized products in different markets. The advantages of standardization are that the firm has the potential of combining the benefits of global scale efficiencies with the benefits of local advantages in the market. The actual choice of a strategy is a function of the conditions in the firm’s internal and external conditions. These conditions must be defined by opportunities, which are conditions in the firm’s general industry that makes it possible for the firm to achieve its short term and long-term goals. The opportunities are contrasted with threats. Threats refer to the firms the obstacles that prevent the firm from successfully using its competencies to gain an advantage in the market. For firms to make profits, they must assess the trends in the general environment and assess the effects of competitive forces in the industry to formulate policies that can maximize profits in the global market arena.