Posted: September 13th, 2017

Strategic Management

Strategic Management

Order Description

The task is to produce a report that assesses the analysis of the external and internal environment of an organization: DAVID LLOYD LEISURE
You should consider the current strategic issues facing the industry and the firm and report on the key trends that will affect the industry in the foreseeable future.
A guideline for the analysis is given below:
1. An analysis of the business environment of the firm. You should consider the main competitors and their competitive position; market details (value; share etc.); current trends in the market; future trends in the market. Evidence should be provided to support claims and information contained in the report.
2. You should provide an internal analysis of the firm giving details of its current strategic position and tactics. You should also consider the resources and capabilities of the firm and how they impact upon the success or otherwise of the firm.
You must make appropriate use of carefully selected tools and frameworks to help you to conduct and structure your analysis
Note:
It is not sufficient to just report on the basic facts (such as market share), although these are important. Analysis requires you to demonstrate an understanding of how key trends and developments are likely to affect the industry. Thus application of a tool or framework that only gives the current status of the industry and does not offer interpretation as to how this might change and what the affect on the industry might be is not adequate. Your opinions must be backed up by evidence.
Similarly you should look at company performance, resources and capabilities and assess these relative to the competitors.

2. Contribution of the assignment to the unit overall grade 50%
3. This task assesses your ability to use appropriate tools and frameworks to analyse the internal and external environment of a firm and use quality and reliable sources as evidence. From this it assesses your ability to demonstrate the strategic issues facing a firm
This is a suggested format. Please not you do not have to strictly follow it although the information and analysis should be covered. I am not concerned whether the Industry analysis comes before the company analysis.
DO NOT:
• make recommendations for future strategies
• describe the tools and frameworks
• write in the incorrect format (this is a report)
• bother with a conclusion

Intro:
• Brief background about the company – stating what it does and in which sector

Industry (sector) basics:
• Competitors.
• Sector performance date
• Segments
• Market shares
Industry analysis:
• Future trends
• The impact of future trends
(Make use of appropriately selected and used framework(s))

Company analysis:
• Identification of strategy
• Performance
Information about resources and capabilities (where available).Using the Five Forces Properly.
You should consider the following questions in order to understand the industry. DO NOT write out your analysis by just answering each question, use them to understand what is going on and then write up your findings.
THEN – think how these might change based on the trends that you have found out about. Are these likely to make the industry (or segment) harder or easier to compete in for your company? Remember not all the elements below may be significant or changing in your segment so only write about the important ones.
The questions you should think about are in bold – my comments are in red

Assess the underlying drivers of each force:
Which are strong? Which are weak? Why are they like this? (Remember there may be some connection between the forces. In our session we decided that the buyer power in the airline industry was quite strong due to the large number of competitors (competitive rivalry); the possibility of using substitutes (threat of substitutes) ; low switching costs (you can fly with anyone as long as they go where you want); lots of easily accessible information about the various airlines and there prices and services)

Can you identify the drivers behind the forces in the industry segment that you are looking at?

Bargaining power of suppliers
Are inputs (materials and labour services) in this industry standard rather than differentiated? (the more standard they are they easier they are to get hold of and the less power the suppliers have).

Can firms switch between suppliers quickly and easily?
(If yes supplier power is low)
Would suppliers find it difficult to enter this industry?
(if supplier could easily become part of the industry their bargaining power increases as they can become a genuine threat. Can and would suppliers of material etc to the industry become manufacturers? The answer may depend on a variety of things like the distribution network; the ability of existing manufacturers to retaliate; brand strength in the industry etc).
Are there many current and potential suppliers in this industry?
(the more there are the lower the power providing it is easy to switch between them)
Is this business important to these suppliers? (Could they sell their products and services in another industry? If not then they have limited power as they are dependent on the industry. Ask if your suppliers provide highly specialised products and services that cannot be sold to other industries).
Threat of new entrants
Are there proprietary products and services on offer in this industry? (this relates to trademarks and copyright)
Is a lot of capital needed to enter the industry? (this may depend on many things including setting up supply and useful distribution networks as well as direct cost of manufacture)
Does the new comer to the industry faced difficulty in accessing distribution and supply channels? (you really want your products in the best known stores/websites)
Is any licensing or other qualifications required to enter the industry and are they hard to obtain?
Can newcomers, expect strong retaliation?

Are products unique to some degree? Do they have recognised branding? (this makes it harder to take away market share).
If the answer is yes to the above it becomes a very hard industry to enter and an even harder one to compete in. This enable companies currently in the industry to keep prices a little higher as they do not fear new entrants coming in. It is possible in an industry for large well known players to enter by making use of their established brand name that they have created in other businesses
Threat of substitutes
Will customers incur costs in switching to substitutes?
Are there no real substitutes for the products or services available in this industry?
The fewer substitutes there are and the harder it is to switch to them then the more powerful they are and vice versa)
Rivalry among existing players
Is the industry at or near capacity? (lots of companies doing similar things)
Are fixed costs high compared to total costs? (Remember in the airline industry one of the key issues was costs. This makes price competition very unrewarding)
Are there significant product or brand differences amongst competitors?
Do firms find it hard to leave the industry due to long-term commitments? (Think about how the airlines are tied in to very long contracts (decades in some cases).
Is market share equally distributed amongst competitors? (Depends on the segment you are studying) Rivalry is affected by some of the other forces acting on it.