Transilvania University of Brasov Business Administration Year III

STRATEGIC MANAGEMENT CASE STUDY CONSAL S.R.L

Student: RUSU ALEXANDRU Coordinating Teacher: Prof. dr. BACANU BOGDAN

Table of Contents

I. Presentation of the Company ................................................................................................3 I.1 Services offered by the company: .......................................................................................3 II. Strategic Management Basic Concepts ...............................................................................4 III. General Environment Analysis ..........................................................................................4 III.1 Political Environment ......................................................................................................5 III.2 Economic Environment ....................................................................................................5 II.3 Social-Cultural Environment .............................................................................................6 III.4 Technological Environment .............................................................................................6 IV. The Companys Mission .....................................................................................................7 V. Competitive Environment ....................................................................................................7 V.1 The Level of Rivalry .........................................................................................................8 V.2 Suppliers Power of Negotiating .........................................................................................9 V.3 Consumers Negotiating Power ..........................................................................................9 VI. The Threat of New Entrants ............................................................................................. 10 VII. Conclusion ....................................................................................................................... 10

I. Presentation of the Company Consal S.R.L was founded on the 12th of September 2002, and it fits into the category of middle sized enterprises having a number of employees of 130. Its Registered in the Register of Commerce with the number J08/1181/2002, and tax code RO14873188. As far as structure is concerned, CONSAL S.R.L is a limited liability company. Its types of activity include sanitation, decontamination, constructions, and roads reshaping. From the beginning, its priority was to purchase equipment neccessary for lauching and carrying the offer of services on the market. If in the first period only retailing equipment was contracted, today reshaping roads and terracing works are being done.

I.1 Services offered by the company:

Construction (road foundations and platforms, clothing and base layers with bituminous binders, paving stone, pavement markers or the clothing, sidewalks, repair and maintenance of roads gritted, repair and maintenance of clothing with bituminous binders, demolition civil and industrial)

Snow removal (snow mechanical, manual snow removal) Sanitation (precollection, collection, transport and industrial and domestic waste disposal, sweeping and washing public ways, maintaining green spaces, parks and squares)

Rental equipment and vehicles (dump trucks, trailers, trucks, earthmoving equipment)

Each service is manned by qualified and experienced staff. The general managers main concern is directed towards quality of services. In this respect, the company has implemented a quality management system ISO 9001: 2000. The company has modern equipment for carrying out activities, most of them of foreign origin. The companys economic situation is a good one, as shown from this data:

Year 2009 2010 2011 2012

Income 1 381 827 2 621 157 6 688 115 7 639 489

Expenses 854 469 1 020 745 4 724 416 3 158 407

Profit 527 358 1 600 412 1 963 699 2 481 082

II. Strategic Management Basic Concepts

The expression of Strategic management made its official entry in the management vocabulary in 1973 in the 'First International Conference on Strategic Management' Igor Ansoff initiated by American scholar at Vanderbilt University (USA). Strategic management is the management process of formulating and implementing of a strategy.

III. General Environment Analysis

General environment includes the external environment (trends and conditioning) that affects a large number of relatively uniform organizations and have an indirect influence on the organization of reference, while the reverse influence is insignificant. Affected organizations have one or more common characteristics such as geographic positioning, use of resources (natural or broad nature), but without having to belong to the same domain. These elements, as causal factors are classified based on the nature of the organization's influence in the following categories, provided as specific environments:

Political-legal, factors that form political-legal environment economic, factors that form the economic socio-cultural, socio-cultural forming technological factors, which form the technological environment.

III.1 Political Environment

It consists of: law, government bodies and pressure groups that influence and limit the actions of various organizations and members of society.

The main current political trends are: -increasing number of regulations in the field of business -increasing number of public interest groups The second purpose is the protection of consumers against unfair commercial practices. The third purpose of the legislative system is protection of society against fraudulent business practices escaped the real problem they raise business law is that of determining the point where the costs of regulation outweigh the benefits. Even if each newly promulgated law would follow an objective rational legal system as a whole could slow economic development initiative and Arod. If the organization CONSAL SRL, legal political factors that influence company are: taxation regime, legislation on environmental protection, fiscal policy, regulations on the export-import (because machines are brought from abroad).

III.2 Economic Environment

It is generated by elements of the economic system in which an organization operates. Determining the correct phase of the economic cycle was at one time the national economy will enable proper adjustment of the organization, knowing the relationship between elements in this stage that the use of labor, interest rates, disposable income, inflation and economic growth indicators. Between the global economic cycle and that of certain areas or states may be differences or temporary differences. Even if the world economy is in recession, the economy of a Member
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may be a favorable situation. These differences may exist regarding certain sectors of the economy. There are industries that are immune to the world business cycle or the boom period is the period that overlaps with general depression. On the other hand there are industries in which the overall cycle is amplified, a depression translating into dramatic drop in demand for a product. Classic examples are the extreme situational and film industry is the construction industry. Economic factors that influence CONSAL S.R.L are: interest rates, inflation, and credit availability.

II.3 Social-Cultural Environment

It consists of patterns that reflect individual and group attitudes, values, habits. Contemporary demographic changes are visible and many trends are worrisome. In developed countries it is found lower birth rate and aging population. The rapid growth in life expectancy in some countries economic performance, such as Japan, led to sharp imbalance between age and proportion of occurrence of a major segment of the population by the third age cycle The fact has important consequences in changing lifestyle of habits and, ultimately, the consumer environment. In the U.S. decreased number of live births since 1960 had dramatic effects on producers of children's clothes, toys and beer. Adult population (the past 30 years) was in the 70s a growing segment that prefers other drinks instead of beer that is addressed especially to young people. In consequence huge investments in the beer industry have never been recovered. In Romania '90s came a negative natural growth that adversely affects economic development and balance. Some of the socio-cultural factors that influence CONSAL S.R.L could be the attitude towards business people, attitudes towards work, attitude towards investors, pollution control and attitude of the population.

III.4 Technological Environment

It consists of all elements that define technology today. Technology is a set of processes by which certain combinations of input resources are transformed into products.

"Concerned about the continuous improvement of our services, we seek to be abreast with the latest regulations and technical innovations in the fields."

Technological factors: focus on the technology industry, the pace of developing inventions, product renewal rate, the rate of replacement of equipment, quality of infrastructure, technical equipment production, Technical Staffing.

IV. The Companys Mission

In strategic management, the mission of an organization is to understand its reason to exist. A number of increasingly large organizations formalize their mission as a formal written statement describing the essential characteristics of the LRO activity; attach those interested, that organization's stakeholders and the public at large.

Objectives are goals for future state organization, cast (if possible) in numerical terms. Quantification of target sets it apart, in the opinion of many authors, of what is called purpose.

"Timeliness, flexibility and responsiveness to all our clients suggestions characterize our relationships and performing our services with professionalism and reliability has led to a fruitful collaboration between our company and our business partners."

V. Competitive Environment

Competitive environment defines the immediate vicinity of the organization, consisting of those elements - individuals, groups or other organizations that directly influence and over which one can exercise an significant influence. In a market with fierce competition in the field, the CONSAL S.R.L has achieved a series of national assessments, awarded by the competent institutions authorized to determine the level of professionalism in various fields, including those of cleaning, construction and other related services. According to the Porter analysis model, the 5 forces that determine the status of a market at a given moment are:

The suppliers negotiation power

New Entrants

New Entrants Threats Consumers Negociation

Industry Competitors

Power

Suppliers Rivalry Intensity

Consumers

Substitution Products Threats

Substitution Products

V.1 The Level of Rivalry The level of rivalry is given by the intensity of competition in an industry. Rivalry manifestation is in the form of struggling to be top of a large market segment or to occupy entirely a certain segment.
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Rivalry is important when there are numerous competitors who are close at size, when the product are undifferentiated or when the growth of the industry market is slow and there are periods characterized by overflows of products. In the case of CONSAL SRL, on its field of activity there is a fierce competition with Eurostrada, Vectra or Recon.

V.2 Suppliers Power of Negotiating

The power of negotiating of the firms in a certain industry can manifest through the majority of prices, or by decreasing the quality of the manufactured products. It rises if the resource for the specific company is important, or if the number of suppliers is low; it is also important if, for example, the supplier is changed, then the new one will maybe have different shipping taxes. CONSAL S.R.L has the following suppliers: Prescon, Petrol Group, Vectra General Construct, Vodafone, Pres Con, Hidraulica, Valdoris, and others, but these are the most important.

V.3 Consumers Negotiating Power Similar with suppliers, customers can put pressure on the firm to provide products, even if it is groups of buyers, not only industrial or commercial users. Power is higher if the buyer purchases a product in larger quantities if the product is standardized and the switching costs are low, or if a component is an insignificant part in the cost of their product. In some businesses, the system gives great power final distribution links, as in the case of luxury goods retailers. If income is low and consumer product price is relatively high, consumers will be sensitive to price changes. The main clients of CONSAL S.R.L are: Brasov City Hall, Michelin Brasov, Atlanta House, Vectra Service, and other City Hall of the town around Brasov.

VI. The Threat of New Entrants

The new entrants are firms that are able to compete with the firms already existent on the market. Although they would wish what any firm wishes, to make profit, there are some barriers in their way: scale economies(increasing returns to scale, low returns to scale, constant returns to scale, the indivisibility of the production process, specialization) learning curve Experience curve Product differentiation capital needed size independent unfavorable production costs access to distribution channels government policies The new entrants on CONSALs field of activity would not affect too much its evolution as the company concludes contracts for long periods, and has the necessary prestige to not be overcome by threats of new entrants in this market.

VII. Conclusion

As the company motto says 'access and cleaning', we hope to have a cleaner Brasov, with many parks, playgrounds, with more places to relax outdoors, where citizens are happy to live in a beautiful city, where businesses are concerned about the welfare of citizens.

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"Consul company liable, in the future to work more closely with partners and colleagues to give more confidence in our services and make sure they will perform in the best conditions and without creating discomfort citizens. "

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References:

1. Bogdan Bacanu, 1997, Management Strategic, Editura Teora 2. Bogdan Bacanu, 2006, Practici de Management, Editura Polirom 3. Date interne ale societatii S.C. Consal S.R.L

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