Question 1 (25 Marks)

Imagine you are been interviewed for the proposed role of Management Consultant to the
owners of “Pots and Pans” explain to them how strategic management differs from
operational management, and why both are important for their long term success

Answer 1
Strategic management is the process through which businesses navigate in a competitive
market environment by establishing long-term strategic direction and executing strategies to
create value for pertinent stakeholders. The goal of strategic management is to ensure a firm
remains competitive and is able to thrive for the foreseeable future. On the other hand,
operations management deals with transforming inputs into goods and services for customers.
The goal of operations management is to streamline business processes in order to maximize
efficiency and profitability. Operations management is considered as one of the most important
strategic functions of any organization and plays a vital role in enabling a firm to achieve the
goals established in the strategic management process. The strategic management process is a
broad cross-functional process that consists of three broad parts - (a) determination of a firm's
mission, vision and objectives, (b) designing plans to achieve those objectives and (c) executing
those plans and measuring performance. In comparison operations management has a much
narrower focus and primarily deals with product design, manufacturing, forecasting and supply
chain management, from sourcing to last-mile delivery. Strategic management almost always
contends with long-term decisions while operations management usually has to deal with
shorter-term decision making. Given the long-term issues that are dealt with in the strategic
management process it often involves having to deal with a lot of ambiguity. In contrast,
decision making in the operations management process can often be based on concrete data,
thus leaving only small space for ambiguity. However, forecasting and supply chain
management can often create uncertain situations and that can lead to ambiguity in the
operations management process as well.

Both strategic management and operations management play a key role in the long-term
success of a business.

Being effective in the strategic management side involves building a business strategy with well-
defined objectives, making execution plans that will enable those objectives to be achieved,
aligning various cross-functional business functions to support these objectives, and allocating
the necessary resources efficiently. Good strategic management in addition to improving
business performance can also play an important role in charting an organisation's path to
achieving social license to operate. In today's environment where stakeholders are increasingly
aware of the environmental and social impact of businesses it's important to have a clear plan
towards becoming a sustainable business. All these elements when combined in an effective
way ensures long-term survival of an organisation in an ever-changing business landscape.

However, one key aspect of ensuring long-term success is ensuring that the operations strategy
of a business is aligned with it's business strategy. Operations management is responsible for
developing plans and policies which would allow the business's resources to be utilized in a
manner that allows it to achieve its long-term goals. Also good operations management will
mean bringing together people, technology, materials and information leading to overall
synergistic gains for the organisation. These gains can often become the source of an
organisation's strength and form the cornerstone on which to base future strategic direction
on.

Question 2 (25 Marks)

Imagine you have been appointed the Management Consultant for “Pots and Pans” Ltd.
Your role is to provide guidance on how to undertake a strategic review on the business. In a
brief memo to the owners outline the steps that you believe need to be undertaken.

Answer 2
A strategic review enables a business to get an understanding of where its business stands in
the current business climate and its readiness to deal with the changing future business
landscape. If a firm is to have a solid strategic plan, it is imperative that the business carries out
a strategic review. Conducting a strategic review is the first step for an organization attempting
to continuously improve. Strategic analysis allows an organization to gain knowledge about its
competitors and as a result develop its own strategies that will allow it to gain competitive
advantage over its competitors. Additionally, the business can analyze its internal and external
environments and identify its strengths and weaknesses and also potential future threats and
opportunities. Analyzing its situation internally and externally not only allows the firm to gain
insight into potential avenues for building competitive strengths but also prepares it for future
survival. Furthermore, execution planning allows the business to determine the key areas that
it needs to focus on to reach goals and objectives and main competitiveness. Lastly, measuring
performance with the help of tools like the balanced scorecard allows a firm to see a clear
picture of whether its heading in the right direction or corrective actions have to be taken.
Overall, a strategic review enables a business to have a clear picture of the objectives and goals
it needs to achieve and the action plan of how those goals and objectives will be reached.

Since Pots and Pans Ltd. have already experienced a slump in market share it can already be
concluded that their performance measures will not be upto the mark so, measuring
performance will be redundant at the present moment. However, in the case it has also been
mentioned that Pots and Pans Ltd. have never had a formal strategic management process in
place. So the steps they can follow to conduct a strategic review are provided below:
1. Defining Mission, Vision and Objectives - Firstly, the top management in-charge of Pots
and Pans Ltd. will be needed to state with clarity the mission, vision and objectives they
have for Pots and Pans Ltd. If these have never been formally written down then the top
management will have to go through the process of defining these three aspects for the
business.
2. Determining the Strategic Position - The strategic position can be defined as the
standing of the organization in the market compared to other organizations engaged in
manufacturing similar products to Pots and Pans Ltd. Gaining insight about strategic
positioning will give an idea whether Pots and Pans Ltd. still holds some competitive
advantages over its competitors or not. If the company is following any business
strategy, such cost leadership or differentiation or focused differentiation or any hybrid
strategy, and it no longer holds a competitive advantage by using that strategy it will be
a sign that there might be issues to further look into.
3. Evaluating External Environment - Every business, including Pots and Pans Ltd., has to
operate in a broad macro-environment where there are forces at play beyond the direct
control of the organization. In its path to achieving its objectives a firm often needs to
deal with factors such as economic cycles, political climate, market trends, industry
competitiveness etc. The impact of these external factors on an organization are often
measured using tools such as the PESTEL analysis and Porter’s Five Forces framework.
Carrying out an external analysis will help Pots and Pans Ltd. determine whether any of
these forces are responsible for its recent slump.
4. Evaluating Organization's Resources and Capabilities - Internal analysis of a business will
enable the management of Pots and Pans Ltd. to ascertain whether their strategy is able
to give them a sustainable competitive advantage over its competitors. By combining
internal and external analysis, management will gain knowledge on how to best
reposition their business strategy so they can take advantage of opportunities in the
future while avoiding potential threats that may harm business performance. Tools such
as the SWOT analysis, value chain analysis etc. can be used for such internal analysis.

Question 3 (25 Marks)

Imagine you have convinced the owners of “Pots and Pans” what needs to be done for a
strategic review and they have further contracted you to research the competitive dynamics of
the industry and advise them on the nature of the competition and whether expansion is a
viable option or not. Detail in a brief memo to the owners how you would use Porter’s five
forces framework as a method for evaluating the intensity of industry competition.
Answer 3
Assessment of an organization’s industry and the competitive environment they have to
operate in can be carried out using a host of analytical tools. Using these tools properly can
enable the management of a business to design a strategy that matches the firm's situation in
their respective industry. One of the most widely used tools for this purpose is the Porter’s five
forces framework. Pots and Pans Ltd. can make use of this tool to assess the competitive forces
in the stainless steel kitchen utensil manufacturing industry. According to this model,
competitive pressures in an industry are generated from five sources. These five sources are (1)
rivalry among existing competitors, (2) threat of new entrants, (3) threat of substitute products,
(4) bargaining power of suppliers and (5) bargaining power of buyers.

1. Rivalry among existing competitors - One of the strongest forces driving the intensity of
competition in an industry. The intensity of rivalry among existing players in an industry
is dependent upon a number identifiable factors. These factors escalate or reduce the
intensity of rivalry among players within the same industry. Some factors that may raise
industry competition for Pots and Pans Ltd. are if buyer demand grows slowly or
declines, product differentiation among competitors is less, competitors become of
equal size and capability etc.
2. Threat of new entrants - New firms in an industry raise intensity of competition because
the only way these new firms can survive is by competing fiercely with established rivals
for market share. This is an important force because in a lot of cases established
industry players have to resort to defensive tactics like reducing price or sales
promotions to counteract the effect of a new entrant in the market. Threat of new
entrants to an industry is high when existing firms do not cooperate with one another
and are unable to take collective action and when barriers to entry in an industry are
low.
3. Threat of substitute products - If customers view from two different industries as close
substitutes then a firm in one industry is susceptible to competitive forces from
organizations in a different but closely related industry. This could be a significant force
for Pots and Pans Ltd. as stainless kitchen utensils are often replaced by utensils made
from cheaper raw materials like iron and plastic. Pressures from substitute products are
greatest when substitute products of similar quality are widely available and offered at a
very desirable price point. Also when customers can switch to the substitute product
without incurring any significant switching costs.
4. Bargaining power of suppliers - When suppliers have significant influence over the terms
and conditions on which they will supply raw materials they tend to have higher
bargaining power. Supplier influence is stronger in cases where a few big suppliers
 dominate their industry, when demand for suppliers' products is high and supply is low,
it is expensive to switch from one supplier to another etc.
5. Bargaining power of buyers - When buyers have high bargaining power they can affect
the profitability of firms in an industry by demanding lower prices, requesting additional
services that increase costs or asking for more favourable payment terms and
conditions. Bargaining power of buyers is high in cases where demand for an industry’s
product is weak when compared to the available supply, products from an industry are
standardized, cost of switching to a competitors’ product is low etc.

By determining whether these five forces are exerting strong, moderate or weak competitive
pressures will enable management to evaluate the profitability of an industry. This sets the
stage in determining how to operate in an industry, what expectations to have and how to
strategize accordingly.

Question 4 (25 Marks)

Reflect on your Competitive Strategic Management studies to date and prepare a brief report
on the personal and professional value you will gain by studying strategic management theory
and practices.

Answer 4
Strategic management skills are considered as one of the most valuable business skills. Since it
is at the strategic management stage where top management determines how the organization
will outperform its competitors by building certain competitive strengths, it is strategy that is
the main differentiator between elite and mediocre businesses. Thus, it is essential for people
in leadership roles in an organization to possess strategic management skills. Through this
course I have learned various concepts, frameworks and tools of strategic management that
will be invaluable as I progress into more leadership roles in my professional career.
Additionally, strategic management by its nature is broad and cross-functional and so many of
these learnings can be integrated into personal life.

More specifically in my professional life, learning strategic management has enabled me to

better orient myself within my organization. Often people lose sight of the impact their work is
having when working in large organizations. The study of strategic management shows a clear
path on how company wide mission, vision and objectives are filtered down into specific goals
for departments and even more specific objectives for individuals. This allows an individual to
better gauge the impact his/her work is having on the grander scale of the entire organization.
Being able to understand the significance of my work means I feel more fulfilled as part of my
organization. Furthermore, by learning tools such as Porter’s five forces I have appreciated the
fact that many situations in the workplace require a multi-faceted approach. Being a member of
the finance team I am often having to deal with issues relating to profitability. And the method
for analyzing potential for profitability using the five forces framework has enabled me to
better understand the wide range of dynamics at play. It also enabled me to better understand
the kind of thought process that goes behind organization wide decision making.

On the personal side, learning about the process of strategic management, that is how an
organization goes from defining its mission, vision and objectives, to planning how to achieve
those objectives and then executing those plans, has taught me the invaluable lesson of how I
should approach my personal life goals. It has provided me with a logical mental framework on
how to pursue my ambitions. I understand the importance of defining who I am as a person,
what my dreams are and how I should go about making those dreams a reality. Additionally,
the broad nature of strategic management has also shown me the importance of holistic
thinking. When assessing the future strategic direction of a business, leaders have to take
numerous and often divergent factors into consideration. This is by no means an easy task but
being able to do it effectively will result in significant rewards. In many aspects of our personal
life we do not apply this sort of holistic thinking and we lose out on rewards accordingly.
Through the study of strategic management I have started the practice of applying holistic
thinking in my personal life and over time hope to make the most out of the opportunities that
come my way.