Strategic Management (SM1)

Introduction

Strategic management suggests the basic implementation and formulation of the key initiatives and goals adopted by the higher authority of an organization. According to Hill et al. (2014), strategic management is solely based on the consideration of market assessment and resources both in external and internal environments within the particular organization operates its business. In today's competitive business world, every large corporation applies appropriate strategic management in order to achieve the desired goal in short time. There are several incidents, which clearly reflects the fact strategic management has a great impact on enhancing the market share and sales revenue in a massive manner.Eden&Ackermann(2013) have mentioned that strategic management identifies the competition level of an organization and then provides relevant strategies in order to cope up with the competitor companies in the same industry.

This particular discourse will discuss the strategic management practices of Woolworths, a popular supermarket chain in Australia. This essay will also evaluate various theoretical concepts, which are closely associated with the strategic management. Strategic management has positive influences on the managerial practices of an organization and this study will examine than in a vivid manner. At the end, there will be effective recommendations for Woolworths, which will help this particular company to improve their business operations both in local and global manner.

Strategic management practice of Woolworths

The grocery market and retail industry are heavily concentrated in various cities of Australia(Barney&Hesterly, 2015).Woolworths can be considered as a leading supermarket chain in Australia as it captures more than 50% market. The sales of Woolworths has a great role in the contribution to the national economy. As Woolworths operates more than 700 supermarkets under several brands, therefore, it is necessary for the higher management of this particular organization to follow strategic management in a stringent manner (Woolworths 2017). On the other hand, the particular individual is the employee of Golden North, which operates its business in the food and beverage industry of Australia. Golden North produces premium ice cream, which is made of fresh ingredients for catering hygienic food to the customers.

The strategic management of Woolworths involves the improvement of overall business with a hike in the market share at least by 36% in this present year. The strategic management of this particular company has an impact on the term of sales, a number of stores and supermarkets, geographical coverage and revenue. The present strategic management of Woolworths is to extend its business in a global manner. Woolworths has opened more than 200 stores in New Zealand and 25 stores in India through a joint venture process with Tata. The strategic management of Woolworths re-establishes the marketing campaignin order to add values for the existing stakeholders. It also boosts the constant business growth of the respective company in the retail industry of Australia.  As opined by Harrison&John(2013), strategic management deals with the cost minimization and core business.

The strategic management of Woolworths involves a solid focus on in-store services, valueand quality product, in order to cater the best to their customers and to survive in the tremendous competitive Australian retail industry. Even the strategic management of Woolworths reevaluate the structuring of the electronic business. Woolworths provide enough sales, discount coupons and various offers both for their new and existing customers. Slack(2015) has argued that the customers are at the center of any kind of business and the retention of customer satisfaction is ultimate for an organization. Innovation and creativity are the major strategies followed by Woolworths and following that, this company will be able to approach the international market and can create sustainable, profitable and unique development.On the other hand,Rothaermel(2015) has stated that transparent reporting system allows for providing quick information.

The strategic management of Woolworths also help the higher authority to establish new values that are following:

• To market the products responsibly
• To source the seafood from various sources, which are sustainable
• To ensure that the respect the basic rights of the staffs
• To avoid GM food for contributing to the deforestation
• To become more trusted by the suppliers, customers and community
• To be responsible enough to operate hotels and restaurants in various locations of Australia
• To be committed to providing the best services at best price

All of these mentioned strategies will help Woolworths to compete with the competitor companies, such as Coles, Aldi and Metcash. The major strategies of Woolworths involve exclusive brand products at a lower price than its existing competitors, limited range of products and constant focus on the retail market. The higher management of Woolworths has adopted the price change policy in an effective manner. This company provides products to the customer at a lower price when the market price is high and the staffs place a note in the stores for attracting the customers while shopping with them. Vogel&Güttel(2013) have mentioned that strategic management mainly focuses on the existing competitors in the industry. Even the marketing strategies of Woolworths are unique and interesting. The higher management has engaged effective marketers for making relevant surveys in order to understand the competitive advantage. The marketers have focused on the digital marketing process and have used the social media platform for attracting the customers. The marketers have used Facebook, Instagram, Snapchat, Twitter and the official website of Woolworths for the advertisement. Even during the seasonal sales, they attract the customers through these mentioned social media platform (Ausfoodnews.com.au 2017).

On the other hand, the present employee of Golden North should understand the necessity of strategic management for future growth of the company. Golden North is not famous like Woolworths as this particular organization has failed to adopt relevant and appropriate strategies, which are suitable for their business. Hubbard et al. (2014) have contradicted that short-term goal and approach generally help an organization to grow in future. However, the higher authority of Golden North has concentrated on the long-term approach and the value proposition. Both of these mentioned strategies have performed negatively in the revenue and market share. Golden North has no strategies to expand its business with the help of team partnership or any kind of joint venture, which has been proved as the best policy of market entry in the international business scenario (Golden North 2017).

Application and evaluation of theoretical concepts of strategic management

According to Frynas&Mellahi(2015), the theory must simplify the assumptions of the management of the organization. There are various theoretical concepts related to the strategic management. Complexity theory suggests the complexity strategies adopted by the organization for further success in the industry. On the other hand, this particular strategy helps to study the complex system of the strategic management. Complexity theory can be considered as interdisciplinary theory, which has been growing out the popular system theory.Morden(2016) has stated that set of various organizational concepts explain the complex phenomenon of complexity theory. Complexity theory integrates relevant ideas from other important theories, such as chaos theory, system theory and information theory. Complexity theory reflects those complex behavior of the organization during the implementation of required strategies.Greco et al.(2013)have contradicted the above statement and has mentioned that the complexity theory is solely concentrated on the way of an organization resembles the market. Even this particular theory supports the maintenance of ecosystem by the organization. However, the basic proponents of the complexity theory state that the important traits are usually shared by the complex systems. All of these systems involves a combination of several independent actors, which are behaving as the single unit. Complexity theory explains the numbers of independent actors in order to demonstrate the patterned behavior of an organization.Foss&Knudsen(2013)have argued that complexity theory rationalizes the actual behavior of the complex and large systems. However, it also helps to shape the entire system for a positive outcome and the constant transformation over time.

Porter’s Diamond theory explains the competitive positions of the business organization in the global market. Porter’s Diamond theory is also famous in the name of Porter Diamond theory of National Advantage. Kasemsap(2014) has mentioned that Porter's Diamond theory clearly discusses the factors that are important for the global competition. Porter's Diamond theory assumes the basic competitiveness of any kind of business is solely interlinked with the performance of the other business in the same industry (refer to Appendix 1). All of the factors are combined together in an established value-added chain in long distance relation. Porter's Diamond theory suggests that the businesses operates its activities within a cluster that stimulate the productivity, improve ultimate business outcome and foster innovation. Porter's Diamond theory provides a perfect opportunity for moving to the international market and maintain their existence and tackle international competition. Langston&Lauge-Kristensen(2013)have determined that this particular theory involves the production factors, such as infrastructure of the organization and knowledge of the employees as these are considered as essential factors for maintaining a competitive advantage. All of the relevant factors are grouped within the material resources, such as human resources involving commitment and qualification of the employees and labour costs. It also includes the natural resources, for instances, climate, oil and essential minerals as these will be a reason for building the international competitive position. Porter's Diamond theory also depends on the success of the market as well as the existence of the related industries and suppliers in the region. If an organization is successful within an industry, then it will be also beneficial for the supporting and related organization. According toPettigrew et al. (2015), competitive suppliers have reinforced the internationalization and innovation.

Core competition theory is closely associated with the management theory and it can be harmonized a perfect combination of several skills and resources, which possess the capability of distinguishing the position of the firm in the marketplace. Core competition theory clearly reflects the characteristics, assets and skills of the particular organization from the rest of the organizations in the same industry. These skills, assets and characteristics are concerned as fuel for innovation as it promotes the basic roots of the competitive advantage. Core competition theory suggests the development of the new business underlying the basic components of the competitive advantage of the organization. This particular theory involves coordination, harmonization and integration of various diverse skills. Bailey et al. (2015) has contradicted the statement and has stated that core competition theory supports advanced streams of technologies for the further development of the company in this technologically advanced business world. Core competition theory provides essential access to wide variety of markets. This particular theory makes a great contribution to the perceived benefits of the customers from the value products and accessible price. Core competencies suggest enough strengths, which are related to the competitor companies and provides a fundamental basis for the basic provision of the added value. Core competition theory reflects various collective learning within the organization. It also coordinates diverse skills of production for a successful communication within the every level of the firm. Core competition theory promotes a deep commitment to the stringent following of the leadership for further growth of the company.

Critical evaluation and examination of the procedure of influence of managerial practices by theoretical concepts

The theory is completely about causal relationships and logical factor amidst of an established concept. Kasemsap (2015) has stated that most of the large corporations follow some effective and appropriate theories and models in order to survive in the competitive business market. All of the mentioned theories on the previous section are apt enough for Woolworths. The business experts of Woolworths have made a thorough survey of the organizational theories before implementing them within the organization. Woolworths follows complexity theory as it concentrates on principle and agent. Complexity theory will help the higher management of the concerned company to encourage the innovative thinking and allowing the units of the business to be self-organized. Following the complexity theory, the organizational leaders of Woolworths are required to give up the rigid controlling power of the organizational system. Even the managers of Woolworths need to allow the company for evolving in response to the ongoing messages from the consumers. Complexity theory has a clear influence on the basic efforts to downplay management in order to know today's unpredictable pace. The market can be determined by the initiative of the team and organization for adopting new economy. Complexity theory will give enough scope for formulating a perfect and required guiding vision for the organization. Even following complexity theory the manager of Woolworths will manage the interaction of the company with the existing companies in an efficient manner without entertaining any kind of chaos or rigid rules.

On the other hand, Porter’s Diamond theory clearly possess the capability to assist the managers of Woolworths to expand business in the international market. The managerial practices of the concerned company are influenced by Porter's Diamond theory in an immense manner. However, there can be advantages as well as disadvantages following this theory. This theory supports the changes in the management policies, interaction in between companies and working morale during the business functions in the international market. Porter’s Diamond theory also encourages the organizations to employ alternative environmental systems or alternative energy in the international market if faced any issues. This particular theory will not be helpful for Golden North as this company is going through the changes of ownership, therefore, there is very less focus on forming the brand reputation strategy. Even Golden North is only limited to few locations of South Australia and the management has no plan to expand its business in other locations of Australia and international market.

Core competition theory is apt both for Woolworths and Golden North as both of these companies encounter a severe level of competition in their respective industry. According to Morden(2016), an organization requires both the tangible and intangible resources in order to be competitive. Following the core competition theory both of the mentioned companies can achieve the difficult challenges in the market. Core competition theory has great influence on the managerial functions of Woolworths as it enhances and manages the competencies in the response to the constant changes in the industry. This theory suggests to focus on the strategies of the competitor companies, therefore, it is apt for Woolworths. Following the core competition theory, the higher management can concentrate on the business activities and strategies of its existing competitor companies, such as Aldi, Coles and Metcash in the retail industry of Australia (Woolworths 2017). There are several pieces of evidence, which reveal the fact that large corporations have encountered failure only because they fail to implement suitable strategies and theories for their organization. Therefore, Woolworths and Golden North can regenerate their potential strategies in order to fight back the tough competition. With the constant changes in the market and customer preferences, the organizations also change strategies, therefore, core competition theory will help Woolworths to build apt and trending strategies for future.

Recommendations for improving strategic management of Woolworths

Although Woolworths implement appropriate strategies in the organization, still this company requires improvement in its strategic management. On the other hand, Golden North has poor strategic management, therefore, it requires effective suggestions to improve its strategies. The recommendations are following:

• The business experts and the corporate planners of Woolworths should be more attentive while making the strategies for the company.
• The adopted strategies should be changed annually and the experts should focus on the contemporary trends during the setting of strategies.
• Before making the strategies, the planners should analyze the issues encountered by Woolworths.
• The digital marketing strategy should be improved in order to cater a large number of consumers at the same time.
• Woolworths does not pay attention to the customers’ feedback, which can be considered as an essential medium of examining the performance of the products as well as the company. Therefore, the strategy planners should create a place both in the stores and website of Woolworths, which can collect the important feedback from the customers.
• The strategy planners of Woolworths should develop their existing international business strategies for more expansion of the business. As the supermarket business is constantly growing in the international business, therefore, Woolworths possesses a great deal of scope for increasing the sales revenue and market share with the opening of stores in various countries across the world.
• On the other hand, Golden North should engage efficient strategy planners for improving their present business operation.
• There should be proper implementation of strategy in order to mitigate the issues of changing ownership of Golden North as this particular issue affects the brand reputation.
• With apt strategic management of Golden North should come up with other products rather than ice creams only for surviving in the competitive food and beverage industry of Australia.

All of these mentioned recommendations will help Woolworths to retain its leading position in the retail industry and Golden North to make a position in food and beverage industry of Australia.

Conclusion

Strategic management will have a negative impact if only strategic planners are involved. There should be an involvement of the employees, different level of managers and the leaders. Strategic management deals with innovation, creativity and competitive advantage. After the completion of this study, it can be stated that the managers, corporate decision makers and business unit leaders play an important role in the strategic management. However, there is always the necessity of implementing issue-based strategic approaches. However, all of the business units of Woolworths do not require strategies to be improved. Therefore, the managers should identify those problematic areas and apply relatable strategies. The recent surveys on strategic management reflect that most of the companies fail to adopt the chosen strategies. Even for the case of Golden North, the failure happens only because of not applying the suitable strategies. However, as Woolworths is a renowned organization, therefore, this company hopefully implements the recommended strategies for further success in the retail industry. The chosen recommendations will help the firms in earning a competitive market edge. Both the firms will be able to enhance their current position thus steadying ahead in the respective field. Likewise a competitive market  advantage can be gained.