Components Of The Strategic Management Process Essay Example

This will allow us to achieve customer satisfaction and establish a strong relationship with society, ultimately leading to increased profitability. We have identified several growth opportunities, including the high demand for real estate in Asia, Heineken's $5.6 billion offer for value generation, strong product demand, the opportunity to bid on government-owned extensive land, and the increasing demand for dairy products. However, we also face certain challenges such as the ongoing financial crises in the euro zone and the flooding incident in Thailand.

The high demand for product in the Asia Pacific is being met by utilizing the location of F;amp;N companies (S1,O3). Additionally, beverage production is being increased to satisfy consumer demands and maintain a strong position in the market (O5,S5). The strong position in both the general market and in maintaining leadership is a significant advantage offered by Heineken (O2,S2). To overcome the decline in company revenue, more products are being produced to meet consumer demands through increased advertising efforts (W5,O3). The decline in profit from China development property is being addressed by tapping into the strong demand for real estate property and reducing non-value added costs in Asia (W3,O1).

Heineken's strategy for increasing its market capitalization involves focusing on investor channels (W2,O2) and utilizing their presence in 15 Asian countries to raise awareness about exchange rate fluctuations (S1,T4) and manage risks associated with potential natural disasters (T2,T5,S5). They also plan to allocate part of the revenue towards repairing any damage caused by flooding (S3,T3). Additionally, increasing promotion is crucial for building consumer confidence and establishing a competitive foothold (W1,T3), while reducing production costs will boost revenue and minimize the impact of

financial crises on the company's operations (T1, W3).

Research and development is crucial for overcoming anthrax outbreaks and advancing property development (T5,W3). F;amp;N has achieved a reputable market position and strong brand across the Asia Pacific region, demonstrating its presence in various industries and establishing itself as a major contender or even a market leader. Upon analyzing the company's business operations, it becomes evident that F&N's competitive advantage lies in its brands, employees, and financial strategy. Consumers prefer F ;amp;N due to its highly experienced employees with versatile business initiatives, who form the company's management team.

The company's success in the market can be attributed to their aggressive marketing strategy, product development, market expansion, and cost leading strategy. These factors have enabled them to maintain their competitive brands and receive numerous awards. In 2010, they were recognized with the "Brand Laureatte Award" for being the top brand in Malaysia's food and beverage category for isotonic drinks. They also achieved the "Reader's Digest Trusted Brand" Gold award in Singapore and Malaysia. To sustain their competitive advantage, it is crucial for the company to prioritize differentiation strategies rather than relying solely on price competition. The primary focus should be on demonstrating why their products and services are superior to those offered by competitors.

In order to achieve this goal, it is necessary for the company to allocate a reasonable amount of money towards advertising. One effective method to create a positive impression among young individuals is through sponsoring small events such as college festivals, university programs, and entertainment events like sports and fashion shows. Additionally, it would be beneficial for the company to utilize

celebrity endorsements and employ various forms of advertising including billboards, radio and television broadcasts, internet ads, and movie placements. These endeavors will contribute to increasing global awareness of their product.

Moreover, F&N should introduce non-beer brands in countries where their beer brands have performed successfully in order to enhance their competitive advantage. They should also prioritize enhancing the design of their beverages in order to differentiate them from other beverage options available in the market. To accomplish this, a competition can be organized where individuals submit their ideas for beverage designs. The winning design will then be promoted for public voting and the designer behind the chosen design will receive an award.

The company should continuously release new products that satisfy customer needs. To gather feedback, they should distribute questionnaires and create a website where consumers can share their preferences regarding product flavors. This will demonstrate that the company genuinely cares about its customers' needs and will give them an advantage over competitors. Additionally, a successful differentiation strategy can help defend against Porter's five competitive forces, including rival competitors, buyers, suppliers, potential entrants, and substitutes.

Product differentiation is a helpful strategy that can decrease the risk of new entry in an industry. By implementing this strategy, potential entrants are not only faced with the standard costs of starting a business, but they also have to overcome the additional expenses associated with competing against established firms that have already established product differentiation advantages. Additionally, product differentiation can also help reduce the threat of rivalry within an industry. Each firm tries to establish its own unique product niche, which lessens direct competition between products. While

there is still competition for customers, the target customers of each firm are different, resulting in weakened rivalry. Moreover, product differentiation assists in minimizing the threat of substitutes by highlighting a firm's existing products as more appealing than substitute options.

Product differentiation can decrease the risk from suppliers and buyers alike. If there are only a few suppliers offering distinct products or services, they possess the ability to dictate prices. Conversely, if the situation is reversed, suppliers have minimal to no influence on pricing. Conversely, when a company sells a highly distinctive product, it attains a quasi-monopoly in that particular market segment, mitigating buyer threats. Customers who desire such a specific product are compelled to purchase it exclusively from one firm.

The ability of a firm to withhold highly valued products or services from a buyer reduces any potential buyer power. Additionally, product differentiation can provide opportunities for a firm in the external environment. In fragmented industries, firms that offer highly differentiated products or services can use this advantage to consolidate the industry. Being a first mover in such industries allows firms to gain product differentiation benefits through perceived technological leadership, preempting strategically valuable assets, and building buyer loyalty that comes with high switching costs. In mature industries, the focus of product differentiation shifts from introducing radically new technologies to refining existing products. Finally, in declining industries, product differentiation remains an important strategic option.

Differentiating their products gives firms the potential to take a leading position in the industry. This can be achieved through factors such as reputation, unique product attributes, or other differentiation strategies. Alternatively, highly differentiated firms may find success

in niche markets despite an overall decline in the industry. When operating globally, implementing a product differentiation strategy has a significant impact on a firm's actions. Typically, successful product differentiation involves understanding individual customer needs and maintaining close customer contact. However, global strategies focused on cost reduction may pose challenges for firms aiming to tailor their products or services to specific demands in various local markets.

The company can differentiate its products for each local market by implementing a multinational strategy. This strategy involves serving different market segments around the world through quasi-independent operating divisions. In order to maintain a sustained competitive advantage, these product differentiations need to be difficult to copy. Based on our analysis, we recommend that the company adopts a "market development" strategy as it aligns with their vision of becoming a world-class multinational enterprise focused on Food & Beverage, Properties, and Publishing & Printing businesses.

Furthermore, this strategy is consistent with the company's mission statement which aims to provide superior returns to shareholders, excellent value to customers, and rewarding careers for employees. By implementing the market development strategy, the company is projected to achieve an annual sales increase of 5%.

The company will utilize its strong R&D capabilities to conduct a survey and assess the market, while also identifying target customers for potential entry into other markets. Market development entails leveraging competitive advantages to seize new locations and grow the business. We propose this strategy as it aligns with the company's vision and mission of becoming a global multinational enterprise. This approach centers on expanding into fresh geographical markets to boost revenue and profits. Conversely, market penetration aims

to strengthen marketing endeavors within an established market, particularly when the market size is stagnant.

We suggest using the strategy of product differentiation because it takes into account all important factors for organizational performance, without disregarding any key factors. It also prioritizes the most crucial factors related to the strategy's success.