PROJECT: STRATEGIC MARKETING MANAGEMENT

TABLE OF CONTENTS

Introduction………………………………………………………………………………………………………………………………..……..1

Concept 1: Environmental scanning ………………………………………………………………………………………..………….1

1.1 Significance of the Concept of Environmental scanning……………………………………………………………..….1

1.2 Current Research Activities related to the concept/Implementation of Activities………………….….….2

1.3 Application of Concept in current job…………………………………………………………………………………..……….2

1.4 Usefulness of concept in the current World…………………………………………………………………………………..3

Concept 2: Value chain analysis ……………………………………………………………………………….…………………..…….3

2.1 Significance of the Concept of Value Chain Analysis…………………………………………………………..……….…3

2.1.1 Optimizing inventory………………………………………………………………………………………………………….……...3

2.1.2 Enhancing clientele relations…………………………………………………………………………………………….…….…3

2.1.3 Increases the bottom line and profit……………………………………………………………………………………….….4

2.2 Current Research Activities related to the concept/Implementation of Activities………………….………4

2.2.1 Primary activities of Starbuck……………………………………………………………………………………………….…….4

2.2.1.1 Inbound logistics……………………………………………………………………………………………………………….…….4

2.2.1.2 Operations…………………………………………………………………………………………………………………..….………4

2.2.1.3 Outbound logistics…………………………………………………………………………………………………………..….….5

2.2.1.4 Marketing and sales……………………………………………………………………………………………………….….……5

2.2.1.5 Service……………………………………………………………………………………………………………………..………….….5

2.2.2 Secondary Activities……………………………………………………………………………………………….……………….…5

2.2.2.1 Infrastructure……………………………………………………………………………………………………..………….……….5
2.2.2.2 Human resource management…………………………………………………………………………………………………5

2.2.2.3 Technology development…………………………………………………………………………………………………………6

2.3 Application of Concept in current job………………………………………………………………………..………….………6

2.4 Usefulness of the Concept in the current World……………………………………………………………………………6

Concept 3: Ratio analysis……………………………………………………………………………………………………….……………7

3.1 Significance of the Concept of Ratio analysis……………………………………………………………….………….7

3.1 Current Research Activities related to the concept/Implementation of Activities……………….…………7

3.2.1 Ratio Analysis of Qantas Airways……………………………………………………………………………………….………7

3.2.1.1 Current Ratio……………………………………………………………………………………………………………………………

8

3.2.1.2 Quick
ratio……………………………………………………………………………………………………………………………….8

3.2.1.3 Debt-equity ratio…………………………………………………………………………………………………………………....8

3.2.1.4 Gross margin……………………………………………………………………………………………………………………………

9

3.2.1.5 Net margin………………………………………………………………………………………………………………………………9

3.2.1.6 Return on asset (RONA)………………………………………………………………………………………….……………….9

3.2.1.7 Inventory turnover ratio………………………………………………………………………………………………………….9

3.2.1.8 Debtors’ turnover ratio……………………………………………………………………………………………………………9

3.2 Application of Concept in current job…………………………………………………………………….……………………10

3.3 Usefulness of the Concept in the current World…………………………………………………….……………………10

Concept 4: Horizontal integration strategy…………………………………………………………………….………………….10

4.1 Significance of the Concept of Horizontal integration strategy……………………………..……………….10

4.1.1 Increased market power………………………………………………………………………………….……………………….10

4.1.2 Increased differentiation………………………………………………………………………………………………………….10

4.1.3 The ability to enter new markets…………………………………………………………………….……………………….10

4.1.4 Economies of scale……………………………………………………………………………………………………………….10

4.2 Current Research Activities related to the concept/Implementation of Activities………………………11
4.3 Application of Concept in current job………………………………………………………………………………………..11

4.4 Usefulness of the Concept in the current World…………………………………………………….…………………….12

Concept 5: Financial strategy

5.1 Significance of the Concept of Financial strategy

5.2 Current Research Activities related to the concept/Implementation of Activities……………………….13
5.3 Application of Concept in current job……………………………………………………………………………….…………14

5.4 Usefulness of the Concept in the current World………………………………………………………….……………….14

Concept 6: Staffing……………………………………………………………………………………………………………….…………..14

6.1 Significance of the Concept of Staffing……………………………………………………………………..…..…………….15

6.2 Current Research Activities related to the concept/Implementation of Activities………….……………15
6.3 Application of Concept in current job…………………………………………………………………………..……………..15

6.4 Usefulness of the Concept in the current World………………………………………………………..…………………16

Concept 7: Supply Chain Management……………………………………………………………………………………………...16

7.1 Significance of the Concept of Supply Chain Management…………………………………….……………..16

7.1 Current Research Activities related to the concept/Implementation of Activities……………………….16

7.2 Application of Concept in current job………………………………………………………………………………………….17

7.3 Usefulness of the Concept in the current World………………………………………………………………………….17

Concept 8: Entrepreneurial model…………………………………………………………………………………………………….17

8.1 Significance of the Concept of Entrepreneurial model……………………………………………………….………..17

8.2 Current Research Activities related to the concept/Implementation of Activities……………..…………18

6.4 Application of Concept in current job………………………………………………………………………..………………..18

8.1 Usefulness of the Concept in the current World………………………………………………………………………….18

Concept 9: Portfolio analysis………………………………………………………………………………………….………………….18

9.1 Significance of the Concept of Portfolio analysis…………………………………………………………………………19

9.2 Current Research Activities related to the concept/Implementation of Activities…….…………………19
9.3 Application of Concept in current job………………………………………………………………….………………………20

9.4 Usefulness of the Concept in the current World……………………………………………..……………………………20

Concept 10: Corporate culture………………………………………………………………………..…………………………………20

10.1 Significance of the Concept of Corporate culture…………………….…………………………………………..20

10.1.1 Identity…………………………………………………………………………………………..………………………………………21

10.1.2 Retention………………………………………………………………………………………….……………………………………21

10.1.3 Image…………………………………………………………………………………………………..…………………………………21

10.1.4 Professional Development………………………………………………………………….………………………………….21

10.1.5 Volunteerism………………………………………………………………………………………….…………………………….21
10.2 Current Research Activities related to the concept/Implementation of Activities……….……………22

10.3 Application of Concept in current job……………………………………………………………………….……………….22

10.4 Usefulness of the Concept in the current World…………………………………………….…………………….22

10.4.1 Used in Trends and Competition……………………………………………………….……………………………………22

10.4.2 Satisfying Millennial Expectations…………………………………………………….………………….…………………23

10.4.3 Corporate Social Responsibility………………………………………………………….…………………………………..23

References…………………………………………………………………………………………………….………………………………….24
Introductio

Marketing strongly influences the management of a firm, its internal, inter-firm relationships,
and its supply chain. Marketing, is a business philosophy, that guides firms to look for customer
satisfaction at profit in a well-coordinated manner. Marketing means a basic set of beliefs and
values about the importance of the customers that guide the firms in their day to day operations.
Marketing also provides a philosophical foundation for human behaviors within the firm. In
other words, marketing as a business paradigm, guides a firm's behaviors to maintain, develop
and enhance inter-firm relationships to satisfy its customers. Marketing is a necessary component
for implementing the supply chain of management. One of the components of the supply chain
management implementation is partnership with the other corporate philosophies that are
compatible, for key relationships. Marketing should be a compatible supply chain partners'
philosophy, so that all partners in the supply chain work towards satisfying the customers at a
profit through inter-functional coordination within and among the supply chain partners. Thus,
under the compatible marketing philosophies, the supply chain partners become more willing to
be efficient and effective toward a common goal of customer satisfaction at a profit. An Effective
supply chain management requires all partners in the chain to build and maintain a close long-
term relationship. A Successful supply chain relies on forming a strategic partnership, which will
imply a long-term, inter-firm relationships with trading partners. This paper is aims at discussing
the ten identified concepts of strategic marketing management. This paper will expand each of
the identified concepts using four dimensions; 1. the concept Significance 2. Implementation
activities related to the concept 3. application of Concept in my current job and 4. Usefulness of
the Concept in the current World.

Concept 1: Environmental scanning

1.1 Significance of the Concept of Environmental scanning

Before any organization starts their strategy formulation, it should first scan the external
environment to identify the possible threats, opportunities and its internal environment for
strengths and weaknesses.

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This concept has to do with the monitoring, evaluation, and dissemination of information from
both the internal and external environments to the key players within of the organization. Several
corporations use this tool to avoid surprise and to ensure a good health of the organization. There
is a positive relationship between environmental scanning and profits (J. A. Smith (19998). A
research by E. Stephenson and A. Pandit (2008) showed that there are 70% of executives around
the world that indicate that the global social, environmental, and business trends are an
increasingly important corporate strategy, according to a 2008 survey by McKinsey & Company.

1.5 Current Research Activities related to the concept/Implementation of Activities

Being the second largest food and beverage company in the world today, PepsiCo realized early
that the increasing their focus on health and wellness (for both political and societal) meant that
the company needs to invest more heavily in the area of environmental scanning. The CEO Indra
Nooyi’s “long-term strategy has been to make PepsiCo’s ‘nutrition business’ a much larger part
of the company’s portfolio than it has been in the past. The company has introduced what they
are calling its ‘good for you’ products snacks and drinks made of grains, nuts, vegetables, fruit
and dairy. This project started from the ten-billion-dollar business and is now at a thirty-billion-
dollar business in 2020.” The company has moved to obtain brands in the functional food and
beverage space (Naked). This has made them increase their investment in R&D to formulate
healthier ingredients (salt and sugar alternatives) that is now being applied to products its
lucrative soft drink and chips business (Andrew Clarke 2020).

1.6 Application of Concept in current job

Our organizations where I am currently working can apply environmental scanning to determine
whether or not it can enter new market and also to know the present situation and condition of its
surrounding environment. It can identify strategic factors that are both external and internal to
determine the future. this organization can use the PEST Analysis to conduct the environmental
scanning. This is because the PEST analysis makes use of the Political, Economic, Social-
Cultural, and Technological factors when conducting an environmental scan. This approach will
be best due to the fact that the external environment consists of the opportunities and threats that
are outside the organization and are not typically within the control of the firm. This concept will
help the business that I am currently doing because we have little or no influence on the external
environment.

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Usefulness of the Concept in the current World

Today’s environment demands that any organizations should use of environmental scanning in
order for it to seize available opportunities and avoid threats. Both individual and organizational
factors around the world have an influence on the environment as whole this is why
environmental scanning is necessary for any organization in the world today.

Fahey and Naravanan (1986) suggest that an effective environmental scanning program should
enable decisionmakers to understand current and potential changes taking place in their
institutions' and external environments. Scanning provides strategic intelligence that is useful in
determining organizational strategies. The consequences of this activity include fostering an
understanding of the effects of change on organizations, bringing expectations of change to bear
on decision-making, and aiding in forecasting. The companies across the world scan the
environment in order to find and to understand the external forces that are affecting the firm in
the now and those that can affect the firm in the future. this helps them respond adequately and
improves their competitive position.

Concept 2: Value chain analysis

2.1 Significance of the Concept of Value Chain Analysis

2.1.1 Optimizing inventory

The reduction of the delivery times paves way for inventory optimization as the retailers will
collaborate with their suppliers to reduce on the period between the ordering and the delivery
time. Ordering surplus inventory is usually stressful and expensive to deal with as it might result
into wastage. This is the reason why; the retailers always trust that the manufacturers will deliver
orders when needed irrespective of the possible shortages.

2.1.2 Enhancing clientele relations

Through the management of the preliminary value chain factors such as inbound logistics,
outbound logistics and operations, the resellers increase response time and reduce the costs for
their clientele. Most importantly the marketing, sales and service phases of the value chain help
to improve consumer relations. For instance, some businesses implement some reward programs

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in order for them increase customer loyalty and to persuade their clients in purchasing more
products over a certain period of time.

2.1.3 Increases the bottom line and profit

The key significance of value chain analysis is that it improves the profit margin of the firm. This
is because when there is efficient logistics and distribution, the goods reach the customers at the
time when they need them. Moreover, the marketing and after sale services attract many
consumers that are persuaded to buy at higher prices e.g. the Apple consumers. The combination
of all the crucial activities of the value chain add more value to the product or service and offer
the company the best possible revenue.

2.5 Current Research Activities related to the concept/Implementation of Activities

To have a better understanding on the concept of the Value chain analysis and its benefits to a
company, we shall examine the case of Starbuck. Starbuck Corporations was established in 1971
with a single branch in Seattle but has since grown into a reputable brand that is known
worldwide.

2.2.1 Primary activities of Starbuck

2.2.1.1 Inbound logistics; Starbucks has a group of professional buyers to select the finest
coffee beans that is used in their productions from farmers in diverse areas of Latin America,
Africa and Asia. After the beans is bought from the farmers, it is transported in storage
warehouses where they roast and package it. The packages beams are then moved to the
distribution centers’, several of which are owned by Starbucks. It is very important to note that
Starbucks does not outsource any procurements as a result this ensures a high quality of their
product.

2.2.1.2 Operations; Currently, this company is operational in many countries either through
franchises or as direct company owned shops. It now owns more than 21,000 stores
internationally and this includes Starbucks Coffee, Seattle’s Best Coffee, Evolution Fresh and
Teavana. Statistics for its annual report indicates that in 2017 Starbucks generated a total of 79%
of its overall 65 countries revenue from company operated stores while the franchises only
brought in 10.5% revenue.

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2.2.1.3 Outbound logistics; Starbucks has very few or no intermediaries because most of
product selling is done in company owned stores or in licensed stores.

2.2.1.4 Marketing and sales; Starbucks is interested more in offering high quality goods and
ensuring utmost customer satisfaction as opposed an aggressive marketing approach. The only
time that this company conducts marketing activities is when launching new products and does
this by sampling the product in its stores.

2.2.1.5 Service; the company aims at fostering customer loyalty through giving each of its
clientele the best customer service.

Figure: 1 Sourced from https://www.tuko.co.ke/287297-value-chain-analysis-meaning-

importance-examples.html

2.2.2 Secondary Activities

2.2.2.1 Infrastructure; for any firm to stay afloat it must have a sound structure infrastructure
usually this divisions of the infrastructure include the legal, accounting and management. For
Starbucks, the company claims to have the best and attractive shops which are accompanied with
an excellent customer service offered by a well-organized and devoted team of workers in green
aprons.

2.2.2.2 Human resource management; one of the main reasons to why the company has
succeeded and has been growing, is because Starbucks has a dedicated workforce. This company
motivates its workers through provisions of generous benefits and incentives. Because of this,
the form has a very low turnover of staff which is a strong sign of great human resource

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management. Additionally, Starbucks conducts several training programs this has helped the
employees to be efficient.

2.2.2.3 Technology development; Starbucks has heavy investments technology. Firstly, it has
incorporated the latest technology in its coffee- manufacturing processes to ensure uniformity in
quality and taste alongside cost savings. The company also used technology to connect with its
clientele. This company was among the first ones to launch free and unlimited WIFI services to
its consumers back in the year 2008, this increased its consumers because most people used their
stores as meeting zones and as makeshift offices.

Starbucks has a platform where clients are able to ask questions, or share their experiences and
provide suggestions. There is a technological concept that Starbucks has developed on the
Apple’s iBeacon system which allows customers to order what they want using the Starbucks
App and get notified immediately when their order is ready.

2.6 Application of Concept in current job

Value chain analysis can help my businesses to see and analyze all the activities that are
performed when offering the service or product. Once all activities are analyzed we can use the
results to evaluate ways to improve the competitive advantage of the company.

My company can gain competitive advantage using the value chain analysis through the goal of a
cost leadership strategy by providing the lowest-cost in the research industry. The company will
implement a low-cost strategy by using low-cost materials and resources that will reduce the
overall price of our product or service.

Using a differentiation strategy, the firm will aim at offering a unique or highly specialized
products or services. This means that my business needs to dedicate enough time and resources
to research, innovation, and development. If we have successful differentiation strategy, it will
allow my business to set a premium price for the products or services.

2.7 Usefulness of the Concept in the current World

value chain analysis is very useful in the world today because it helps in understanding the
disadvantages and advantages of firms and countries that are specializing in production rather
than services, and why these producers connected to the final markets have influence on their
ability to gain from their participation in the global markets.

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As many firms and regions have improved their capabilities in this post-war period, particularly
in the last two decades of the twentieth century, the low-cost sources of the supply grew for
buyers that where procuring on a global stage. This is why in some countries particularly
Mexico, Brazil, Hong Kong, Malaysia, Singapore and Thailand, production was increasingly
undertaken by subsidiaries of the foreign-owned TNCs.

It is argued that the major reason why value chain analysis is very important is that it helps to
understand the distribution of benefits, in terms of income, to those participating in the global
economy. This makes it easier for countries to identify the policies which can be put in place to
enable the individual producers and countries to increase their shares on these gains.

Concept 3: Ratio analysis

3.4 Significance of the Concept of Ratio analysis

Ratios are exceptionally important tools with which one can be able to judge the financial
performance of the company over a given period of time. The efficiency of a company can also
be judged against the industry average. The vertical analysis ratio helps understand whether the
performance of the firm at a given point in time is good or poor. In the same way, the use of
ratios in horizontal analysis indicate whether the financial condition of the firm is improving or
deteriorating and whether the cost, profitability or efficiency of the firm is going in upwards or
downwards trend. A study of the trend of strategic ratios may help the management in the area of
planning and forecasting. Most of the times, the investment decisions made in firm are based on
the conditions that are revealed by the different kinds of ratios. In this way it serves as handmaid
to the organization.

3.5 Current Research Activities related to the concept/Implementation of Activities

3.2.1 Ratio Analysis of Qantas Airways

The reports that are made once every year are intended to provide the information that is required
by the stakeholders of the company, namely the potential and existing shareholders, the creditors
of the firm, and the providers of long-term finance to the firm, the governments, and the society,
employees of the firm, so that the stakeholders can take informed decisions as regards to the
company. The absolute figures in the financial report might not serve the purpose of forming the
informed judgment about the performance of the firm. Ratio analysis is an effective tool that

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appraises the difference in the operational aspects of the firm. Ratios give a quantitative
relationship between the data from the income statement and balance sheet. Key ratios of Qantas
are calculated from the Annual Reports of the firm (Annual Report 2019).

3.2.1.1 Current Ratio

This ratio is the relationship between the current assets and liabilities. The Ideal current ratio for
any firm is conventionally taken as 2:1, but in reality, there are several factors unique to a
company that impact this ratio. The current ratio of Qantas air ways has fallen from 0.49 in 2019
to 0.43 in 2020. This meant that in 2019 the company had $0.43 of current assets against $1 of
current liabilities. The trend analysis shows a continuous fall of current ratio of the company,
indicating that the company’s short-term liquidity is falling.

3.2.1.2 Quick ratio

This ratio is a more stringent measure of the liquidity. The liquidity ratio reflects the speed of
how quickly an asset be converted into cash without the loss of value. Both the cash and
marketable securities are considered to be easily converted into liquid than assets. Inventory has
fewer liquid characteristics because it takes time to convert it into cash and it has possibility of
loss in value during the process. This is why inventories are deducted from current assets to
derive the ratio. The ratio of Qantas airways was 0.44 in 2019, which has been deteriorated to
0.39 in 2020. This trend analysis shows a falling short-term cash liquidity of the firm.

3.2.1.3 Debt-equity ratio

The ratio shows the lenders’ contribution for every dollar of owners’ contribution. This ratio was
$1.96 in 2019 and is now at $1.86 in 2020. This indicates that the long-term liquidity of the firm
has fallen. Due to this reason even the trend analysis shows that the debt-equity of the firm might
continue falling in the coming years. This shows that the firm is tilting more to the equity side.
Because the cost of equity is more than cost of debt, the company’s weighted average cost of
capital is expected to increase in future.

3.2.1.4 Gross margin

This gives an idea of how efficiently the management has produced each unit of output. In 2020
the gross profit of the firm Qantas airways has fallen from 10% in 2019 to 8% in 2020. This is

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because of the raise wage costs and depreciation and amortization in 2019, and also fall in total
revenue in 2017. Trend analysis shows an upward trend of GP margin indicating increasing
efficiency on the part of the management in the production of each unit of service.

3.2.1.5 Net margin

This ratio shows relationship between the profit after tax and sales. This ratio is used to measure
the efficiency of the management in all spheres of company operations. The ratio indicates the
ability of the management to turn each dollar of sales into profits if the Net margin is more than
the firm’s growth potential and better in the dividend payment. The firm’s net margin has fallen
in 2019 from 6% to 5% in 2020.

3.2.1.6 Return on asset (RONA)

This ratio shows how efficiently the assets are being utilized in firm. For the Qantas airways the
ROI has been superb in the last three years. In 2019 the firm earned a return of 50% on its net
assets, which has fallen to 38% in 2020. However, it must also be known that the firm’s net asset
increased from $3,260 million to $3,540 between this period.

3.2.1.7 Inventory turnover ratio

It shows the efficiency with which the company is able to sell its product and services. This ratio
shows how fast the inventories can be converted into finished products. In 2020 Qantas airways
turned its inventories (at a cost of) 35 times a year; which was 36 times in 2019. The trend
analysis therefore shows a downward trend of this matrix of the firm.

3.2.1.8 Debtors’ turnover ratio

This ratio gives the average number of times the debtors turnover in a year. The higher the
turnover is the better the debt collection by the firm will be. The ratio was recorded to 20 in 2019
and has dropped to 13 as of 2020. This trend analysis is showing a horizontal trend of the metric.

The analysis of these ratios of the Qantas shows that the liquidity and leverage position of this
company has deteriorated even though the profitability metrics is showing a good performance
of the management of the company. The ratio analysis of Air New Zealand also showed that
most of the metrics are on the lower side in compared to the Qantas airways, especially the
profitability metrics. Overall, Qantas airways has been able to satisfy the performance needs of

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most investors such that the Investors can safely suggested to invest in Qantas airways than in
Air New Zealand.

3.6 Application of Concept in current job

The ratio analysis can help us a business in decision-making: as a firm we can prepare the
financial statement for decision-making purposes. The information provided in the ratio analysis
is not an end in itself. But is quite useful for a firm like ours, as we are able to draw meaningful
conclusion from these ratios alone.

Applying this concept on our firm will also help us in the areas of financial planning and
financial forecasting. In layman’s language planning is simply looking ahead, therefore the us
the analysis ratios calculated for a number will work as a guide for the future. Meaningful
conclusions can be drawn for future use of the firm using these ratios.

Ratios analysis will assist the firm where I currently in co-ordination which is of critical in
effective business management. Because a communication of efficiency and weaknesses of the
firm can result in better coordination.

3.4 Usefulness of the Concept in the current World

Most workers of many organizations are very interested in the financial position of their firm
especially the company profits. This is because their wage increases and also the amounts of
fringe benefits are related to the volume of profits earned by the firm. Various profitability ratios
relating to the gross profit, net profit, operating profit, etc. enable employees to put forward their
viewpoint for the increase of wages and other benefits (Smita Mishra 2020).

Any government is interested to know the overall strength of the each of their industry. Various
financial statements published by different industrial units are used to calculate the ratios for
determining short-term, long-term and overall financial position of the firms. Profitability
indexes are also be prepared with the help of ratios. Government may base its future policies on
the basis of industrial information available from various industrial units. The ratios analysis may
be used as an indicator of the overall financial strength of the public as well as private sector, in
the absence of such economic information, any governmental plans and policies may not prove
successful (ibid).

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Concept 4: Horizontal integration strategy

4.1 Significance of the Concept of Horizontal integration strategy

The significance of horizontal integration includes; increased market power, increased

differentiation, the ability to capture new markets and economies of scale.

4.1.1 Increased market power: When a new company, mergers with another company, the
company will become a bigger customer for its old suppliers. As a result, it will command a
bigger end-product market that will have greater power over its distributors.

4.1.2 Increased differentiation: The company will have capacity to offer more product features
to its customers.

4.1.3 The ability to enter new markets: If the merger is with an organisation that is foreign, the
new company will have access foreign market.

4.1.4 Economies of scale: A bigger, horizontally integrated company is able to achieve a higher
production at a lower cost.

(Sonia Kukreja 2020)

4.2 Current Research Activities related to the concept/Implementation of Activities

Facebook and Instagram are one of the most popular mergers in our time. In the year 2012
Facebook merged with Instagram at a whopping amount of $1 billion (Sonia Kukreja 2020).
Because the two companies operated at the same level of supply at some point. When the social
gaits Facebook saw this, they saw an opportunity and perfect strategy to increase their
dominance even further if they are to merge with Instagram. So far records show that, the merger
of Facebook and Instagram has proved to be an overwhelming success given that Facebook has
been growing massively since then.

PepsiCo will acquire Rockstar Energy in a $3.85 billion deal, this will make then double down
on energy drinks and with an eye toward turning around the struggling Mountain Dew brand.
Pepsi has a distribution agreement with a privately held Rockstar in North America since
2009. Pepsi CFO Hugh Johnston said that the company’s distribution contract with Rockstar

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restricts the company from innovating in energy drinks or partnering with others (Amelia Lukas
2020).

After this deal closes, Pepsi will be able to form partnerships with other energy drink producers,
according to Johnston. Stifel analyst Mark Astrachan (2020) wrote that Pepsi is interested in a
distribution agreement with VPX, which owns performance energy drink Bang. Pepsi and Bang
did not immediately respond to a request for comments.

The food and beverage giant stated that it does not expect the Rockstar acquisition to have a
material impact on its revenue or earnings per share in 2020. But when regulators approve this
deal, it is expected to close in the first half of 2020 (ibid)

4.3 Application of Concept in current job

Application of horizontal integration will help our company where am currently working to fight
off competition from significantly well-performing rival firm.

As we are trying to grow as a company and then we realize that we have large competition
coming from another firm, in such a situation the concept to merger with the rival firm will help
us stay profitable. Because if the growth of our rival companies is sustained and left to compete
favorably with us, in the long run it might eventually bring us down.

Sometimes the concept of horizontal merger is very suitable for an upcoming company like ours
because when we can merger with an established company in order to make a name and also a
merger with another established firm can help our firm to grow in the level of operations. 

4.4 Usefulness of the Concept in the current World

Horizontal integration will help the overall costs of operation to become considerably cheaper
because of the economies of scale that result from the expansion of the firm. A larger company
will have a very low cost per unit of production since they have a better bargaining power among
the suppliers. Because of their capacity to buy goods in bulk. the prices are discounted. This is
translated in to a lower cost of operation and thus a higher profit margin for the merged firms
(Sujit Surendran 2018).

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Horizontal integration makes companies achieve high power in the market. This is because the
two merged companies will be sharing resources and the customer base. This concept reduces
competition for the parent company in a considerable size. In most cases, mergers are primarily
done to avoid competition from rival firms. This concept will cause the companies to focus on
improving the effectiveness of their goods and services instead of formulating methods of
beating off competitors (ibid).

Horizontal integration brings about increased differentiation. Which will offer diversity in the
production of goods and services to a market since the larger corporation easily make wide range
of goods easily and sell them to a large market (opcit).

Concept 5: Financial strategy

5.1 Significance of the Concept of Financial strategy

It shows you whether the company goals are realistic or not. By taking stock of where you are
and where you want to be as a firm it can help you identify the gaps and highlight potential
shortfalls.

This concept is like a port in the storm; this simply means that It’s easy to stick with a strategy
when things are moving accordingly, but when things get challenging, it becomes tempting to
jump off the ship. A well thought out financial strategy will help act as an anchor for you when
you have an unexpected event take place in the firm.

It helps to understand where the money of the company goes. While some people are so good at
following the money, others have no idea where they really spend money on. Other than the side
of a company understanding the part of putting the financial strategy together is sitting down and
accounting for where the expenses are going (Andra Picincu 2018).

5.2 Current Research Activities related to the concept/Implementation of Activities

Spain ha been using the financial strategy to takw advantage of the opportunities in European
Union by the members. in 2020 Spain will be receiving over EUR 90 billion from EU cohesion
and structural development funds, of which 19 billion will be used for environmental and water
programs. The funds accumulated using this strategy have enabled Spain to achieve universal
drinking water supply, reduce water losses to 35%, implement EU legislation related to

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environment and water, and develop and implement emergency plans on droughts, double the
share of the population with wastewater treatment and floods (WFTF 2018).

In order to maximise the mobilisation of EU funds in successive funding periods (2000-2006,

2007-2013, 2014-2020), Spain has been using financial strategies to ensure that all available
funds at a point in time are spent effectively and efficiently by relevant actors in the country. For
each funding period, Spain developed a strategic document that, was based on an analysis of
investment the needs and the ability to absorb the funds. As a consequence, Spain was able to
receive more funds than initially allocated, as funds originally pre-allocated to other EU member
states and the fuds that had not been spent were re-assigned to Spain (ibid).

5.3 Application of Concept in current job

There has been a common misconception that only large organizations require a financial
strategy. The truth is that all companies small or big need to use this company.

The application of this concept to my current firm will be very important due to the fact that it is
a growing organization that is just getting started.

This company where I am currently working has not defined a clear plan to be optimizing return
on investment. Thus, using this concept will assist in have a clear investment. This plan which
will help us make smart decisions as firm.

This concept will also help us set realistic goals, and identify all potential pitfalls and develop an
actionable plan for the business direction.

A well-planned financial strategy for my current workplace will improve the current level of
investment and competitive advantage. It will also make us eliminate all distractions and give a
clear goal on which to focus on as firm.

In the long run, this strategy will increase our profits and reduce debt. Because by using this
strategy firms are able to allocate their resources in the most effective way and also avoid the
unnecessary expenses.

5.4 Usefulness of the Concept in the current World

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This concept is very useful in the current world because measures of the firm’s financial
soundness and also shows how efficiently a firm’s financial resources are being utilized to
generate additional cash for its future investments. This concept is used to represents the net cash
available after deducting the investments and working capital increases from the firm’s operating
cash flow. Thus, companies across the should utilize this metric when they foresee substantial
capital expenditures in the near future and follow through for implemented projects.

Because there are many functional areas and business units that need to manage the level of tax
liability that are undertaken in conducting businesses to understand that mitigating risk also
reduces the expected taxes. Moreover, the new acquisitions, initiatives and product development
projects must be weighed against tax implications and net after-tax contribution to the firm’s
value. Generally speaking, performance must, whenever possible, be measured on an after-tax
basis. Global companies must adopt this measure as they operate in their different tax
environments, especially where they are able to take advantage of inconsistencies of the tax
regulations.

This principle is very useful for efficient management of current assets and current liabilities,
turnovers and the enhanced management of its working capital and cash conversion cycle. Many
companies must utilize this concept when their operating performances has fallen behind
industrial benchmark or benchmarked companies.

Concept 6: Staffing

6.1 Significance of the Concept of Staffing

Staffing plays an important role in the utilization of all the company’s resources. Because in
every organization all the resources such as, money, machine and material etc are utilized
efficiently using specialized man power. This specialized man power appoint in an organization
through a good staffing system. Thus, we can say that this helps in maximizing the efficient
utilizations of resources. 

Staffing also plays a significant role through the reduction of the cost of production. It helps in
appointing of the right person at the right job, at the right, time so that no wastage and mistakes
are made by efficient personnel during the delivery of products and services. Thus, it is clear that
staffing will assists an organization to reduce its cost of production.

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Staffing gives the employee’s job satisfaction. Because by using this concept the jobs are
allocated among the personnel according to their comfortable ability, aptitude, talent and
specializations which give employees more satisfaction regarding their specific working stations.
Because of staffing employees give their hundred percent efforts behind their respective jobs in
the firm. 

Staffing is very important for fulfilling the present as well as future needs of the employees. it
provides the necessary statistics for the organization on how much slots will be vacant in the firm
and the available positions that will be created. So that organization can fill up those vacant and
new positions by appointing the deserved candidates. Thus, it is clear that staffing fulfils present
and future needs of employees in organization.    

This concept plays a very prominent role in establishing unity and co-ordination among
employees. Staffing helps make employees become involved in their tasks and ensure healthy
and co-operative relationship among the themselves within the firm, this is because this concept
helps in assigning employees jobs according to their ability, aptitude, talent and specializations
which.

6.2 Current Research Activities related to the concept/Implementation of Activities

In the United States, the Office of Budget and Management of the President's Office is in charge
of budgeting as well as exercising selected managerial control measures such as determining
manpower levels and co-ordination of personnel policies. These activities are fully integrated in
the budget cycle. Similar arrangements can be observed in Denmark where manpower levels and
pay structure is determined by the Ministry of Finance, again within the government budgeting
process.

6.3 Application of Concept in current job

In my current working place Staffing can assist the management in discover qualified and
competent personnel for various roles within the firm. Considering that my current working
place is a startup firm the application of this concept will ensures the continuity and growth of
the company, through the development managers.

6.4 Usefulness of the Concept in the current World

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One of the objectives of staffing is to bring the people with required skills into the organization
and develop them into valuable organizational resource. The implementation in the current world
today help many organizations undertaking the responsibilities of management using competent
people and, that will ensure the long-term success of the firm.

In today’s complex and dynamic world, human resource planning will help ensures that an
organization has adequate supplies of managers. Thus, staffing will be a requirement because
any organization planning for manpower is necessary both when managerial talent is available in
abundance or in scarcity (Diksha S 2020)

Concept 7: Supply Chain Management

7.4 Significance of the Concept of Supply Chain Management

This comprises of vendors that supply raw materials, producers who convert the material into
products, warehouses that store, distributions centres that deliver to retailers and retailers who
sell the product to the ultimate user.

There are two types of supply chain that is Push and Pull.

Under the Pull Model, stocks are produced in response to the actual demand. This new business
model is less products centric and more directly focused on the individual consumer a more
marketing-oriented approach.

Under the Push Model, stocks are produced on the basis of anticipated demand. Demand
forecasting can be done via a variety of sophisticated techniques may be from operations
research area or data mining.

7.5 Current Research Activities related to the concept/Implementation of Activities

The Department of Defence (DoD) and its organizational supply chain professionals recognize
that DoD's Supply Chain Management (SCM) system faces numerous challenges in need of
management attention, especially excess inventory levels, inadequate controls, and cost overruns.
Sustaining a ready, capable force through effective, joint logistics support for America's war
fighters is part of the DoD logistics mission, which includes SCM. Despite major investments in
SCM systems, many organizations struggle to realize anticipated benefits, often times from the
lack of valid methods to measure these benefits. Capturing key elements from historical efforts

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that others used to assess their SCM maturity levels, Crane Army Ammunition Activity
developed the Supply Chain Management Maturity Model (SCM3) and used it to assess and
improve its own maturity levels. Likewise, DoD organizations could use this model to improve
operations in their supply chains and thereby improve the readiness of war fighters

7.3 Application of Concept in current job

Supply Chain Planning at Apple Inc. Is the classic example of New Product Process. It is the
integration of Research and Development, Marketing and various functions under supply chain
management. Apple Inc. accelerates the new product introduction by acquiring the licensing and
3rd party businesses. It has to make pre-payments to some suppliers to secure the strategic raw
materials. Apple Inc. Purchases raw materials from various sources then get them shipped to an
assembly plant in China. From there, assembler will ship products directly to consumers (via
UPS or Fedex) for those who buy from the Apple’s Online Store. At the end of products life,
customers can send products back to the nearest Apple Stores or dedicated recycling facilities.

7.4 Usefulness of the Concept in the current World

In modern business environment supply chain management use E-Procurement process. E-

Procurement is the electronic methods beginning from identification of the organization’s
requirement and end on payment. E-procurement includes E-sourcing, E-Purchasing and E-
Payment.

Highly controlled supply chain fetches tangible benefits such as inventory reduction, personnel
reduction, productivity improvement, order management improvement, financial cycle
improvement. It results in information visibility, new/improved processes, customer
responsiveness, standardization – flexibility and globalisation of business performance.

Concept 8: Entrepreneurial model

8.2 Significance of the Concept of Entrepreneurial model

In the entrepreneurial model, the skills, resources and interests of an individual, or firm, is used
as a basis for the creation of a new business. In this Model the work involved is specifically
chosen to match with the skills and interests of the individuals.

8.3 Current Research Activities related to the concept/Implementation of Activities

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The entrepreneurial model provides propositions to guide the empirical research in
entrepreneurship (Mishra and Zachary, 2014). Several additional propositions are possible when
the entrepreneurial model is applied within a specific entrepreneurial context or to a specific
situation.

Pro Mujer is an international women's development organization that was founded in recently
with the aim to empower women at improving their social and economic statuses. Since the time
of its conception and now the organization has been establishing microfinance institutions that
provide working capital loans to the low-income individuals who invest capital in productive
activities such as retail trade and small-scale production then sell their products in an open
marketplace.

5.5 Application of Concept in current job

The application of entrepreneurial model to the current organization am working for will;
encourage in investment, stimulate and encourage in sense of competition of the firm with its
competitors, it will bring about change and innovation to the firm, can lead to Job creation for
other people as the firm will be expanding, it will improves quality of the firm and will assist the
management in the proper distribution of income.

8.4 Usefulness of the Concept in the current World

It is a known fact that all developing countries, are in pursuit of economic “prosperity”. This is
very evident as governments of developing and non‐industrialized nations of the world have
repeatedly declared their intentions to push their national economies to the status of being
“developed” and “industrialized” with the expectation to reap economic “fortune” (Goh, 2005).
In recent research, the field of economic development now strongly focus on Schumpeter’s old
notion of “pioneering entrepreneur” which is regarded as a key driver of economic development
(Hagemann, 2013). The entrepreneurial model hence is useful in the expansion and
transformation of productive potentials of the national economy by inducing higher productivity
and expansion of new niches and industries.

Concept 9: Portfolio analysis

9.1 Significance of the Concept of Portfolio analysis

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The concept of Portfolio analysis will help to determine the financial stability of the firm along
with its product performance

This concept acts as trend analysis for the product to predict the possible future of the company
in the market

It is used as a guide for shareholders and investors in the financial assessment of the portfolios

This model of analysis is a tool in decision making for the company to take product-related
decisions of understanding whether it should continue, change or stop production.

9.2 Current Research Activities related to the concept/Implementation of Activities

A company called Shine Shoes manufactures and markets over 50 models of women shoes. The
General Manager of this firm realized that sales increased but profitability has been steadily
decreasing since 2018. He did not know what exactly was happening and he sort advise from a
consultant to conduct a portfolio analysis. After a study was done it provided some interesting
outcomes. According to the research done for this firm, the top five models represented 17% of
total sales. However, those five were not profitable at all because the production costs were high.

At this very time the other shoe models were highly profitable but their sales were not consistent
to the overall portfolio. Because of this the Manager decided that higher investment in marketing
and sales effort should be made in the most profitable models so that the overall profit is pushed
up. After taking this approach the company results were considerably positive and the company
improved notably in its finances because of the application of the portfolio analysis.

9.3 Application of Concept in current job

Our companies can use the concept of portfolio analysis, so that it can diversify its portfolio
among different asset classes. In most cases the different assets such as bonds and stocks will not
react in the same way to adverse events. A combination of asset classes will drop a company’s
portfolio's sensitivity to the market swings. Generally speaking, bond and equity markets move
in the opposite directions, so if your portfolio is being diversified across both markets, an
unpleasant movement in one party will be offset by positive results in another.

This concept can be used in our firm to analyze each product separately in terms of profitability,
growth potential and its contribution to the company’s income. This analysis will facilitate the

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identification of the products that are not profitable at all and are performing poorly within the
group.

9.4 Usefulness of the Concept in the current World

In 2019 Harry Markowitz published an article "Portfolio Selection" and in his article he realized
how to create a frame for the optimal or efficient portfolio, expecting highest possible rate of
return for the default risk which is measured as the standard deviation of portfolio returns. The
theory of Portfolio analysis is based on the fundamental assumptions that shows that investors
have an aversion towards risk and they act rationally. The function of utility determines the
behavior of the investors. The portfolio analysis as a whole is the deciding factor, which means
that it works collectively that’s what makes it have an advantage.

The single most important use of portfolio analysis is that it helps investors to apply the notion of
holding more than just one security at a time, as an attempt to spread risks by not putting all their
investments in just one basket. The diversification of one ‘s holdings is aimed at reducing the
risk of an economy in which every asset ‘s returns are subject a certain degree of uncertainty.
The value of cash suffers from the inroads of inflation. The use of portfolio analysis will help
several investors hold several assets, so that in a case where one goes bad, the others will
produce results that will be protection of extreme loss to all investments.

It helps the company to be aware of the financial health of the portfolios and their wellbeing.
This analysis assists in assessing the consuming portfolios which helps the company to be aware
of what can either be discontinued or revamped.

Portfolio’s analysis helps the company to stay in sync with its vision and mission and objectives.
Because sometimes it may happen that a certain portfolio might be loss-making and fining dead
weight losses for some time. In such a case, the portfolio analysis will give a clear picture of the
company scenarios.

Concept 10: Corporate culture

10.1 Significance of the Concept of Corporate culture

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10.1.1 Identity: corporate culture contributes to the identity and value of the company. For
example, for a company whose corporate culture to prioritizes the setting and meeting of targets,
the individual workers of the firm are more likely to set and meet targets of their own. This
concept is a very good way of setting and maintaining the direction of your employees, without
it, it can be had to keep the company’s values coherent.

10.1.2 Retention. Strong company culture attracts and retains skillful people. People like to stay
in an organization where they feel a certain level of belonging. Thus, this concept helps with
lower turnover, good chemistry among the employees and fewer new hires to deal with in the
organization.

10.1.3 Image. Corporate culture also adds to the firm’s brand identity. If the firm treats its
employees well and maintains an excellent corporate atmosphere, the clients will see the firm an
excellent, generous brand. And depending on the firms target demographics, this concept works
as a major boom for sales and customer loyalty.

10.1.4 Professional Development

It is important for any organization to help its staff grow in their respective fields and build paths
for future promotions and career advancement opportunities. Professional development consists
of specialized training, informal learning opportunities and formal education. Any institution
that invests its time and money to train and development the careers of its employees can expect
better-trained workers with clear job performance goals and results.

10.1.5 Volunteerism

When an organization values volunteerism, it fosters an environment of goodwill. Volunteering

one’s time and talent to charitable organizations, providing educational opportunities, and other
community service activities can be very rewarding experiences for employees.

10.2 Current Research Activities related to the concept/Implementation of Activities

Google has been consistent with their culture for years; the company has set the tone for most of
the perks and benefits start-ups. They are known for many things such as; free meals, parties,
employee trips, open presentations by high-level executives, financial bonuses, gyms, a dog-

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friendly environment etc. the employees to this company are always known to be exceptionally
talented and among the best of the best (Sujan Patel 2015).

The continued growth of Google has made the organization to expanded and spread out, keeping
a uniform culture has caused some difficulties between the headquarters and satellite offices, as
well as among the different sections within the firm. Because of this the company keeps applying
the concept of corporate culture overtime. The larger the company grows, the more it has been
reinvented to accommodate more employees and needed for management size.

10.3 Application of Concept in current job

A strong corporate culture would be critical to the success of our firm. An application of this
concept to my current working place will attract more clients because this principle is a driver of
excellent performance to the employees within the organization.

This concept will produce an excellent working attitude in the employees at my current working
place because of the positive and supportive environment in the organization.

This concept will motivate our current job perform as well as helping us strive to reach both our
individual and company’s goals.

10.4 Usefulness of the Concept in the current World

10.4.1 Used in Trends and Competition.

In the current world today for companies to shift to the creation of a more thorough brand
cultures that must also be preserved through this developing and technologically advancing
world. The concept of corporate culture would be very useful as it is a very big motivating factor
in this regard.

This concept is useful also because it would be useful in dealing with a company’s turnover.
According to Larrry Alton (2017) there has been a measurable increase in turnover for
companies with poor or nonexistent corporate cultures, and conversationally, this is why
corporate culture now is mentioned more frequently among entrepreneurs in the world today.

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This concept will be more useful for companies that want stay afloat in this world of
competition, because the level of competition amongst companies, both in terms of hiring new
people and in terms of appealing to customers is more important today than ever. This why if
you any company does not at least keep pace with a strong culture and find a way to differentiate
themselves, they are definitely going to remain behind (ibid).

10.4.2 Satisfying Millennial Expectations

This concept will be very useful for the attraction of the millennial to many organizations today
because most millennials desire a strong company culture more than anything else as they decide
to choose where to work. Thus, it will help the organization a great deal as millennials are the
key drivers to the workplace changes of the near future. If a company in this current world fails
to attract the millennials it will remain stagnant and this could eventually hit a talent shortage.
Most companies are losing in the recruiting war because they do not have a strong and appealing
company culture (opcit).

10.4.3 Corporate Social Responsibility

In today’s working environment, it’s important that companies are fully aware of the impact of
their actions on society. This concept will help every company to focus on helping and benefiting
of the world and not on simple profit maximization.

Put the well-being and interest of society first, and This concept will help a company to be
widely respected because of its integrity and empathy as a result of participating in helping and
focusing on the well-being of society. This wide respect for the company tends to attract many
and better candidates.

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