Change in the business world cycles and models Essay Example

develop a Strategic Plan, The Five-Step Strategic Management Guidelines should be followed. Step 1 is Preparation which involves assessing the company's readiness to execute the plan and determining their capability to implement it effectively. It is crucial to evaluate all factors before proceeding because the planning stage cannot ensure that there will be no impact on the business.

The five crucial stages of strategic planning begin with identifying the issues that require addressing. Next, responsibilities concerning the plan must be assigned and a Planning Committee must be established.

Anonymous (2003b) emphasizes the significance of creating an organizational profile as a crucial step in determining the current state of the company, and identifying relevant information is also important for formulating a well-thought-out plan. These steps are essential to prepare the company for proceeding with the planning process, resulting in a work plan. The second step involves articulating mission and vision concepts, which entails identifying the company's focus and purpose.

One of the essential steps in business planning is to create a mission statement that defines the company's purpose, business activities, and values. This helps establish a unified approach towards achieving one or more objectives. The next step involves drafting mission and vision statements.

The situation assessment is the third step in the planning process, which occurs after completing the first and second steps. During this phase, company issues are identified and examined along with available current information like SWOT (Strengths, Weaknesses, Opportunities, and Threats) Matrix, resources, and potential future trends that could impact the organization's present circumstances. These pieces of data are crucial in making decisions during the plan's decision-making stage.

Prior to commencing a project, it is crucial to

gather required data within the given time frame. Anonymous (2003b) suggests prioritizing significant issues that relate to the current organization's situation. Step three involves compiling a set of data and identifying critical concerns, with top priorities determined for addressing primary organizational issues. The fourth step requires developing strategies, missions, and goals by formulating options and integrating them accordingly. To ensure effective strategic planning, both general and specific endpoints must be designated while implementing chosen options creates strategies and determining objectives decides goals.

Considering and discussing different viewpoints regarding strategies, missions, and visions is a crucial yet time-consuming process. This stage has the potential to completely transform a company's goals, strategies, and vision. It is essential that any modifications made during this phase align with the company's mission and objectives. The result should include specific objectives, general strategies, and long-term goals. Finally, it is important to document the final plan while ensuring that all necessary aspects are covered. Integration plays a vital role in guaranteeing the overall effectiveness of the plan.

The strategic management process consists of five steps. The first step involves reviewing and addressing any previous concerns or revisions that may have arisen due to various factors such as differences in interpretation or minor errors. The second step is to finalize the plan promptly to prevent it from becoming ineffective (Anonymous 2003b).

Despite the perceived waste of resources such as paper, electricity and ink, as well as valuable time, strategic planning is an essential activity for any company. At its core, strategic planning is driven by the managerial function of planning, which provides a framework for creating strategies related to a company’s primary functions and operations. Without

strategic planning, a company would lack direction in terms of its mission, vision, and values. These guidelines serve as the basis for the company’s operations and programs, which are designed to help achieve its goals.

The SWOT analysis is a vital component in the set of rules that governs the company's ability to achieve its objectives. It is the third step outlined in strategic management guidelines, which involves scrutinizing both internal and external environments to examine the present situation. This analysis specifically evaluates the internal environment by identifying strengths, weaknesses, opportunities, and threats.

The company's present state can be better understood and various options for the future can be generated by considering these factors. The internal environment of the company is crucial as it greatly influences decision-making. SWOT Analysis evaluates internal aspects, while PEST analysis measures external factors like Political, Economic, Social, and Technological considerations.

This text emphasizes the importance of competitor analysis for goods-producing companies. Such analysis determines the market for a product or service, highlighting the need for strategic planning to gain an upper hand over competitors. The analysis involves scrutinizing the competitor's SWOT, strategies, and objectives to compare them with the company's alternatives and predict possible counteractions. In contrast, this approach is not effective in the Creative Industries as market changes make it difficult for competitors to accurately predict the extent of change.

Without knowledge of the necessary data, competitors are unable to make informed decisions about potential changes. In the Creative Industries, companies that survive have learned the value of coping mechanisms, adjusting themselves to current situations and any accompanying changes. Here, strategic planning may be unnecessary and a waste of money as

it involves gathering data which may not be useful. The strategic planning process was designed for stable environments, able to respond to sudden changes rather than simultaneous ones. As the environment becomes more unstable, the planning process becomes increasingly problematic.

Adhering to a rigid strategic plan can lead to failure if it lacks adaptability and sudden environmental changes do not align with the forecasted events. Accuracy of the plan relies on the accuracy of event forecasting, and unplanned changes could potentially disrupt the sequences involved in the plans. It's important to note that not all possible events can be addressed by the designed plans.

Moreover, the absence of a contingency plan that can overcome any unanticipated impediments can disrupt the achievement of the strategic plan. Numerous businesses that developed a strategic plan fail to anticipate all possible circumstances, causing it to break and the project to fail. When dealing with unpredictable environments, companies are more focused on adapting rather than on the strategic planning process.

The industry's radical transformation has prompted business leaders to seek innovative ways to keep up with the market. While this requires restructuring the internal foundations of modern businesses, the ultimate objective remains the same: adapting to the rapidly changing environment. Enter e-business, where companies streamline their strategies to access the fast-paced world of business (Kalakota). Nowadays, successful industries understand that traditional business models that were once key to creating industries of the past are no longer useful in light of emerging industries.

An example of companies that recognize the need to supply consumers and stakeholders with both current and future information is E-Lift (Hunt 2002). These companies are referred to as

visionaries, utilizing technology as an advantage in order to streamline their operations. By integrating customer needs with technological advancements, they aim to improve customer loyalty and profit growth (Kalakota). The UK's Creative Industries encompass arts and design, including fashion, architecture, music, and multimedia. This market is highly volatile, with trends and consumer preferences often changing in a matter of days.

Despite not relying on the traditional factors of the business world, the creative industry possesses a flexible nature that enables it to adapt to the constant changes in its environment and the trends that shape the market. While experts acknowledge the absence of modern business principles, this is offset by their fast-paced product development. However, the lack of core business skills such as basic accounting can result in some enterprises within this industry not only incurring losses but also shutting down. Nonetheless, due to its adaptability, freelancing and other new ventures continue to emerge within the industry. (Kalakota, Bryson 1995)

III. Examination of External Factors Affecting the Situation
Although the industry is highly volatile, companies are able to develop due to their ability to adeptly handle it. Both suppliers and buyers possess the necessary skills to cope with the industry's current situation. (Brown) The economic factors that negatively impact other industries have little effect on this specific sector. Despite constantly changing styles and movements, Fashion Designs and Artworks remain in high demand in the United Kingdom. The people of the United Kingdom have adapted to the rapid changes within the Creative Industries, making it a dominant force influencing other countries' external market factors.

(Dodgson 2000) Internal Factors: The internal environment factors affecting the United Kingdom's demand are hard to

notice, as the people have adapted to the volatile market. However, the blending of people and Arts has become a key reason for the industry's success despite ever-changing market demand. Additionally, competitors are not given much attention by the main players in the Creative Industries as they have their own unique style. It is ultimately up to people's diverse tastes to decide which style they support. (Khosrowpour 2000)

The development of technology has opened up opportunities for the creative industries, particularly in the United Kingdom where people have a diverse appreciation of modern art. The use of computer generated effects in movies, and the efforts of artists in creating innovative music videos have contributed to a promising future for these industries. The influence of technology is essential in keeping the consumers interested in the products and generating more profits, ultimately achieving the goal of trend-setting. (Gangopadhyay 2002)

The applicability of strategic planning in the creative industry is evaluated by applying the step-by-step process of strategic management. The goal is to determine if this procedure is effective in the face of turbulent changes in the industry's environment. Brown's Strategic Management outlines the first step as "Getting Ready," which involves collecting data for analysis. This step is not practical in the creative industry due to time constraints. It would be cumbersome to undergo this step while competitors are already distributing their products. The creative industry requires innovation that aligns with distribution, making it different from other industries.

Moreover, if a break is taken initially, the current data collected will soon become outdated and therefore become irrelevant in the near future. A prime illustration of this situation is observed with

songs. The sales data and chart-topping position are only valid for a limited period of time. Once the popularity dwindles, a new track is launched. The innovation aspect is connected with the production phase.

As previously mentioned, the recording industry lacks the ability to analyze the situation. Their solution is to release a new single that will once again dominate the market, giving them time to determine which song to release next. Step Two involves formulating a mission, vision, and values. However, in the fast-paced world of music, these guidelines are not typically considered. Those involved in the industry strive to make a statement through their work.

In the visual arts field, supply and demand theories are not applied when creating masterpieces. Sculptors and painters simply focus on their artistic work without considering any business theory. The industry does not utilize data analysis while producing their products.

Step Three: Situation Assessment. Nowadays, piracy is rampant in the movie and music industry, rendering this step irrelevant. Studies have shown that illegal file-sharing activities have caused a 22% decline in music album sales (Anonymous N. D.). Analyzing incomplete data is challenging, and the revenue data from pirates is not as accurate as legal companies. Moreover, analysts may not have enough time to use their data to predict future trends.

The fast pace of change can make collected data obsolete and predictions inaccurate in the arts industry. Economic patterns such as supply and demand do not dictate arts patterns and the industry cannot accurately predict trends due to market and consumer volatility. To become leaders in the creative industries, setting trends is more important than predicting them. Development of strategies in

the creative industries differs from other industries, with setting trends, following industry leaders, or shifting style to gain public support being the primary strategies.

In this industry, the key factor is being the first to release a trend, and formulated strategies are not necessary. The quantity sold is the only factor considered, and the more trends a company sets, the more successful it is in the industry. Price is not a significant factor. Additionally, independent and small-scale companies dominate this industry, and strategic management is not essential as the top companies are those that have released their products first.

Planning for the release of a new painting by an artist may not be ideal, especially if the public ends up preferring the works of a rival after just a week. Such planning involves a significant investment of both time and money, which could have been better spent on producing other artistic products. The music industry serves as an example with trends that are popular among teenagers aged 16 to 19, yet are easily replaced by new products in the market within two weeks. For products in this industry, planning only shortens their already brief lifespan if it remains just on the drawing board.

(Gangopadhyay 2002) If the revolutionary artwork had been released earlier, its effectiveness would have been tested. However, lengthening the release period of a new product may decrease consumer expectations. Companies do not want to rely solely on instinct when anticipating market trends. Step Five of creating a written plan cannot be completed without analyzing data, formulating values, missions and visions, and predicting scientific trends like practiced by managers.

A report cannot be

produced unless there is data to analyze. As such, no written plan can be created because there is no such data available. Additionally, piracy is the main competitor of the industry and poses a significant threat. The continuous breach and violation of intellectual property rights is the most problematic issue faced by the Creative Industry. This problem significantly impacts sales due to file sharing and free internet downloads.

Similarly to the music industry, piracy damages the movie industry, which is a part of the Creative Industry that also suffers from this issue. It is crucial for the industry to join forces in order to counteract this threat, which poses a risk of the entire Creative Industry being halted. Such a scenario would lead to the loss of new music talents, movies, and an impediment to technological advancement. Consequently, it is vital for the country to explore ways of safeguarding this industry against pirate-induced destruction. Moreover, it is impractical to anticipate the industry's future outcomes, particularly in regards to long-term prospects.

Due to its volatility, the creative industry can experience predicted changes in a matter of weeks - a timeframe unmatched by other markets and industries (Khosrowpour 2000). While seeking development, companies in this sector also need to adjust quickly to the ever-changing environment. However, this can be challenging as timely identification of potential trends is crucial for a company to gain a comparative advantage over its competitors. The ability to adjust or produce goods of superior quality, enabling it to create the trend, would give a company an advantage (Oxelheim 1997). Nevertheless, such an approach comes with the drawback of having to set new trends constantly in

order to maintain the said comparative advantage. Ultimately, the creative industry depends heavily on setting trends rather than developing them.

VII. Conclusion: The strategic planning process is not appropriate for the Creative Industries' environment due to the volatile market. This market does not meet the criteria of a "stable" market in which plans may work well. Additionally, unforeseen circumstances, such as those mentioned in the disadvantages of the planning process, make plans more precarious and prone to failure. The planning process is not designed to produce efficient results in an ever-changing environment where tastes and preferences fluctuate, such as in music and film-making. Therefore, applying the planning process in turbulent circumstances like the Creative Industries is a waste of time, money, and effort since this industry does not meet the qualifications necessary for effectual use of the planning process.

(Brown) Allocating financial resources towards planning processes may not be advantageous for businesses, especially those in unstable and ever-changing industries. Those responsible for creating plans may receive greater benefits than the production process itself. Rather than focusing on pre-determined actions, it is often more beneficial to adapt to changes as they occur since predetermined plans could become outdated due to shifting trends. In volatile markets, discussing and developing strategies can be a waste of time if the resulting plan proves unhelpful. Strategic planning can assist in managing a company's strategy, but it may not always be the best option.

Anonymous (2006) suggests that strategic planning may not be effective and can cost a lot in turbulent environments within the Creative Industry. To learn more about key concepts and definitions related to strategic planning, visit allianceonline.org/FAQ/strategic_planning/what_is_strategic_planning.The webpage titled 'What are

the basic steps in a strategic planning process?' is sourced from 'allianceonline.org' and was accessed on November 29th. The webpage can be found at http://www.allianceonline.org/FAQ/strategic_planning/what_is_strategic_planning.

On November 29, both the FAQ and an anonymous user accessed an article about PEST analysis, which can be found at http://www.netmba.com/strategy/pest/. The anonymous user had accessed it on November 26.

In 2006, Anonymous made a reference to the website of 'The BPI', which can be found at http://www.bpi.co.uk/index, according to a statement in a

tag.

On November 28, Brown et al.'s "The Process of Making Strategy: A Step by Step Guide" was published on the asp; website. On December 6, 2006, it was also made available through another source at http://www.capella.edu/.

In this text, two citations are given, one for John M. Bryson's book titled 'Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement', published by Jossey Bass in San Francisco, California (Bryson, 1995), which includes a URL (http://www.capella.edu/) and the date accessed (December 6, 2006). The second citation is for Des Dearlove's book titled 'The Ultimate Book of Business Thinking: Harnessing the Power of the World's Greatest Business Ideas', published by Capstone Publishing Ltd. in Oxford, England (Dearlove, 2000).edu, where information about Mark Dodgson's book "The Management of Technological Innovation: An International and Strategic Approach", published by Oxford University Press in the UK and New York, was sought on December 6, 2006. More details on this publication can be found at http://www.capella.edu.On December 6, 2006, the website "edu/>" was accessed. Ulrich J. Franke wrote a book called "Managing Virtual Web Organizations in the 21st Century: Issues and Challenges" in 2002

and it was published by PA Idea Group Publishing. The link for this book is "http://www.capella". These details were stated within .On December 6, 2006, three sources were accessed via their respective URLs: edu/, which is unspecified; Aryya Gangopadhyay's 2002 book "Managing Business With Electronic Commerce: Issues and Trends" on PA Idea Group Publishing's website (http://www.capella.edu/); and Fernando B. Hunt's unidentified source.In February 2002, Dr. Kalakota accessed a source called 'Strategy in turbulent times' from the Managerial Auditing Journal 1/2, authored by Xavier and Robert A. in 2002. The source can be found at http://www.capella.edu/. There is a paragraph tag surrounding the text.

Ravi e-Business 2.0: Roadmap for Success (2nd Edition)', accessed on December 6, 2006 at http://www.capella.edu/. Khosrowpour, Mehdi (2000), 'Challenges of Information Technology Management in the 21st Century', Hershey, Pa. Idea Group Publishing; available at http://www.

The source for information on "Managing in the Turbulent World Economy: Corporate Performance and Risk Exposure" by Lars Oxelheim and Clas Wihlborg is available on the website http://www.capella.edu/ and was accessed on December 6, 2006. The book is published by John Wiley & Sons, Ltd. (UK).