Strategic Management
Strategic management refers to the continuous process of planning, monitoring, analyzing and assessing all of the essential requirements that an organization needs to meet its set goals and objectives. It is concerned with the development of an organization’s strategic vision and mission, setting out of the objectives that need to be met, formulation and implementation of strategies and introducing the correct measures required by the organization for it to reach the organization strategic intent (Amason et al., 2020). The success or failure of a strategy is determined and influenced by various factors among them being how the vision, mission and values statements of an organization are created and implemented, alignment between the strategy, people and the organizational culture and the leadership team buy-in of the strategy. The discussion below is a description of how these factors impact the success or failure of a strategy.
For any organization to be successful in meeting its set organizational goals and objectives, there has to be a clear strategy. Vision, mission and values statements play an important role in the formation of an organization’s overall strategy. A vision statement describes what and where the organization wants and aspires to become in the future. It is a long term goal that gives an organization direction to its aspired future. A mission statement, on the other hand, details the current state of an organization together with its primary goals and objectives. It describes what an organization does in terms of goods and services provision, how it does it and who its customers are. They guide and direct the purpose and principles that influence the activities of an organization and communicate the purpose internally as well as externally. They also help an organization in the formation and implementation of the overall strategy that will be used to meet and achieve the set organizational goals and objectives (Köseoglu et al., 2020).
The leadership team of any organization plays a huge and important role when it comes to strategy formulation and implementation. Leaders direct and influence the organization’s stakeholders towards the achievement of the set goals and objectives. They transform the potentials of employees into realities. Leaders manage to influence the employees through various ways including motivating them by providing fair and equal compensation and benefits administration systems, conducive and favourable working environment, forming productive teams with a clear definition of the roles and responsibilities of each team member. The leadership team is also responsible for providing and availing the resources needed for the achievement of the overall organizational goals and objectives (Jakobsen et al., 2020). They ensure that there is a continuous flow of information throughout the organization through a two-way communication process to ensure that every stakeholder of the organization is aware of what is happening around the organization and what is required of them in the achievement of the set strategy. When leaders take the responsibility of ensuring that all of the above responsibilities are met, they contribute a huge part in achieving the success of an organization’s strategy.
Situation analysis refers to the methods that managers in an organization use to analyze the internal and external environment of the organization to obtain an understanding of the organization’s capabilities, its customers and the overall business environment. Situation analysis indicates the position of the organization in terms of products or services, the overall survival of the organization within the currently immediate environment. Situation analysis in any organization is performed using various analytical tools. One of the tools used in situation analysis is SWOT analysis which is involved with examining the Strengths and Weaknesses of an organization (internal environment) and the Opportunities and Threats within the business market (external environment). A SWOT analysis puts into consideration both the current and future situations of an organization where an organization analyzes its current and strengths and weaknesses while still looking for future opportunities and threats. SWOT-analysis helps an organization to build on strengths as much as they can while working on the weaknesses to reduce them as well as identifying and utilizing the opportunities that avail in the future and dealing accordingly with potential future threats. This analysis helps an organization develop a plan that keeps it equipped for various potential happenings. Another tool that is commonly used in situation analysis is the 5Cs Analysis which comprises of Company, Competitors, Customers, Collaborators and Climate. Company analysis involves analyzing and evaluating the organization’s goals, objectives and capabilities. It involves an analysis of the organization’s vision, mission and value, the marketing strategy, performance in terms of how effectively the organization is achieving their stated mission and vision and the set goals and objectives. Competitor analysis consists of analyzing the competitor’s position and the potential threat that the competitor may pose to the organization. Competitor analysis helps an organization to obtain details about the competitor’s current nature, their potentials and capabilities so that the organization can be able to prepare on how it will overcome the competition. Competitor analysis follows a certain criterion which starts with identifying the competitors and whether they provide the same products or services, assessing the competitors in terms of the goals, mission strategies and resources and finally predicting the competitors’ future initiatives. Customer analysis involves analyzing the customers of the organization in terms of their needs and wants, income level, product or service quality, distribution channels, among other factors. Collaborators of an organization include the suppliers, distributors, agencies and other outsiders who are in one way or the other related to the organization. Collaborator analysis helps an organization to determine whether the different collaborators who will be included in strategy formulation have the capabilities needed for the overall achievement of the organization’s set goals and objectives and the level of commitment needed for a healthy collaborator-business relationship. Climate analysis is also known as PESTEL analysis, and it involves analyzing the organization external environment based on various factors. These factors include political, economic, social, technological, ecological and legal factors (Bryan et al., 2020)
Organizational culture refers to the beliefs, norms and values that govern and drive how employees in an organization behave and interrelate with one another. It impacts all the activities that an organization engages in starting from management decisions to recruitment and production. Aligning organization strategy with the organization’s culture and the people play an important role in the implementation of the strategy and the achievement of the overall organizational strategic goals and objectives. When an organization appropriately aligns its strategy with its people and the organizational culture, it is most likely going to have a smooth journey of implementing the strategy and achieving the set organizational goals and objectives (Barbosa et al., 2020). Organizational culture influences how the organization does what it does and how employees interrelate with each other. Healthy interpersonal relationships between the employees will contribute to the formation of healthy and productive teams. With every team member’s roles and responsibilities clearly defined, they will be able to meet the manager’s performance expectations, therefore leading to the overall organizational performance and achievement of the set goals and objectives. Appropriate organizational alignment leads to the success of an organization strategy in that the people involved in the formulation, implementation and completion of the strategy use the organizational culture in terms of the organizational practices, employee behaviour and the values and beliefs to engage in activities that lead to the overall achievement of the set goals and objectives (Yin et al., 2020).
Coca Cola Company is the largest beverage company in the world. Despite the heavy competition from other beverage companies such as Pepsi, Coca Cola has been able to sustain and maintain itself as the leading beverage brand. Like any other organization, Coca Cola Company also has its strengths, weaknesses, opportunities and threats. The following is a SWOT analysis for Coca Cola Company:
Coca Cola Strengths
Extended global reach – Coca Cola is sold in more than two hundred companies and has introduced into the market more than five hundred products globally. This helps the company in increasing its sales volume.
Strong brand identity – Coca Cola has managed to create a highly popular and unique brand for itself all around the world because its soft drinks and beverages are the most-selling in today’s history.
Unparalleled distribution system – Coca Cola Company is known to have an efficient and most extensive distribution network all around the world.
Dominant market share – this is another strength that Coca Cola holds against its competitors such as Pepsi Company. It has the largest market share with Coke, Sprite, Fanta and Diet Coke as the highest market drivers for the Company.
Coca Cola Weaknesses
The aggressive competition with Pepsi – Pepsi is another growing beverage company and is currently the biggest rival of Coca Cola.
Health concerns – Coca Cola Company being the largest manufacturer of carbonated drinks, poses health concerns to its consumers. Carbonated drinks are a major source of sugar intake, which can result in health issues such as diabetes and obesity. Coca Cola has not developed any health alternatives for this challenge yet.
Product diversification – Pepsi Company has launched and brought into the market a variety of snack items. Coca Cola, on the other hand, seems to be lagging when it comes to product diversification.
Coca Cola Opportunities
Coca Cola has the opportunity to introduce new products and diversify its segments just like its rival, Pepsi Company.
It also has an opportunity of increasing its presence in developing countries that have a hot climate because, during such times, the consumption of soft drinks is high.
Packaged drinking water – Coca Cola has the opportunity to bring into the market more healthy drinks such as packed drinking water. Although the company has already introduced a water brand, Kinley, it should work towards utilizing the opportunities of coming up with other water brands.
Coca Cola Threats
Direct and indirect competition is one of the threats facing Coca Cola. Although Pepsi is seen in the market as a direct competition, there are other companies such as Starbucks competing indirectly with Coca Cola.
Packaging controversies – Coca Cola has been criticized for its single use of plastic bottles and its recycling and renewable sources.
SWOT analysis of Coca Cola plays a huge role in influencing and impacting the Company’s strategic decisions. The strengths help the company in knowing where they are good at and impose ways to help it maintain and sustain their position. The weakness, on the other hand, helps the company to identify the areas that it needs to work on and put in efforts of improving. Opportunities help Coca Cola to identify areas that can be utilized for the company to increase its market share and the sales volume. Finally, threats help the company in identifying areas that need to be improved and put in the necessary measures to deal with them accordingly. Coca Cola uses SWOT analysis in making strategic decisions on what needs to be done at what time and by who to meet the overall organizational goals and objectives.
In conclusion, form the discussion above, strategic management is the continuous process of identifying, planning, monitoring and assessing the essential requirements needed by an organization to meet and achieve its set goals and objectives. Creation of clear vision, mission and value statements, leadership team involvement, and alignment of the organization’s strategy influences and impacts the success of an organizations strategy. SWOT analysis, 5cs analysis and PESTEL are some of the analytical tools an organization can use to conduct situation analysis.
References
Amason, et al., (2020). Strategic management: From theory to practice. Routledge.
Köseoglu, et al., (2020). What are the key success factors for strategy formulation and implementation? Perspectives of managers in the hotel industry. International Journal of Hospitality Management, 89, 102574.
Jakobsen, et al., (2020). Buy-in to a Credible Vision! Why leaders make prospector responses to learning-oriented performance reform. Public Organization Review, 20(2), 277-299.
Bryan, et al., (2020). Teaching strategic planning and evaluation: tools and techniques. In Teaching Nonprofit Management. Edward Elgar Publishing.
Barbosa, et al., (2020). Sustainable strategic management (GES): Sustainability in small business. Journal of Cleaner Production, 120880.
Yin, et al., (2020). Does It Pay to Align a Firm’s Competitive Strategy with Its Industry IT Strategic Role? Information & Management, 103391.