Case Study Oreo

Strategic Planning Paper

Strategic planning and management deal with what direction the organization will be heading in and how it will go about achieving its strategic goals (Strategic Management, 2005). For the most part, business leaders are more concerned with immediate success that they do not pay attention to what their ultimate business objectives should be. This makes strategic planning an important aspect of a business’ strategy. While having a strategic plan does not necessarily mean that the organization will be a success, not having a strategic plan will leave the organization with a higher percentage for failure. The writer of this paper will select a small business to start, explain why strategic planning is important for the success of the business, define strategic management and planning, and explain the four functions of management relative to creating and implementing a strategic plan.

Starting a small business

The writer of this paper wants to start a small tax preparation and document services business that caters to the Latin population in Anaheim, CA. This business will be started upon completion of the writer’s Business/Accounting education. In starting a small tax preparation business, a small office will be rented, a network of four computers will be setup, extensive advertising will be done. The mission statement of the business will be: to be the premiere tax preparation and document services company servicing the Latin community, while providing comprehensive, fast, and friendly services where customers will want to return year after year. The objectives of the company will be to grow at a steady rate each year. Providing thorough, friendly services will ensure that customers return.

Importance of strategic planning

Strategic planning is important in many aspects. For one, strategic planning sets the foundation of how an organization will become successful, the direction that the organization will take, and what goals it will have. Strategic planning will put into a plan the values, objective, and strategies in which the organization will undertake (Strategic Management, 2005). If an organization is already running, but does not have a strategic plan, there are several questions that management can pose in starting out a strategic plan. For example, management can ask the following: how has management led the organization in the past? What kind of funding is available? What plans, if any, are in effect to grow the company? And, have costs of running the business increased?

What is strategic planning and management?

Strategic planning sets about discovering how an organization will specify how decisions will be made and at what level; set specifications as to how employees will be informed, motivated, and kept involved in the goals of the organization; and provide a basis for additional in-depth planning (Strategic Management, 2005). Organizations do not plan to fail, but rather fail to plan.

Creating and implementing a strategic plan – the four functions of management

The four functions of management are planning, organizing, leading, and controlling (Strategic Management, 2005). During the planning phase, management must come up with an objective for the organization. An objective can be based on the entire organization, or on a specific department. When planning the organizing phase, management will plan who will be involved in performing the tasks as planned in order to carry out the objective. The leading phase of the strategic plan will ensure who in management will take on the objective to ensure success. In leading, management should be ready to delegate and assign tasks so that the objective can be met with success. The controlling phase will plan out how management will control costs, stay within budgets, and control the performance of employees.

Conclusion

Having a strategic plan will not ensure success for an organization. Not having a strategic plan will most likely ensure the failure of an organization. A strategic plan sets out to strategize how an organization will become successful and sets the foundation for an organization’s business plan. This paper discussed the business that the writer of this paper wants to start upon completion of his education, discussed the importance of strategic planning, defined what strategic planning is, and discussed the four functions of management with respect to strategic planning.

References

Strategic Management (9th ed.). J. Pearce and R. Robinson. McGraw Hill, 2005. Boston, MA

Using Porter’s five forces model to analyze the external environment for Amazon

1. Barriers to Entry

Threat of entry is considered medium to low. Being the first mover in online bookstore industry, Amazon would be the best example of what amateur firms would be faced. But, the book retail industry has very high barriers to entry. The capital requirements necessary to establish a bricks and mortar bookstore would be virtually impossible for a newcomer. Consumers know the big name players. High product awareness and large marketing budgets make it very difficult for new entrants to enter into this industry.

2. Rivalry within the industry

Competitive rivalry is medium to high. There are numerous industry players; however, they can be considered niche (eBay) and overly diversified (Yahoo!) competitors of a diversified industry firm like Amazon. As a result, a head-to-head competition exists against Barneys (who is backed by retail stores) and Price line (who has the highest employee per revenue contribution in the industry) created strategic group together with Amazon. Competitors also have little product differentiation, except for auctioned product maybe and other exclusive rights of players to sell supplier’s products, making customer switching costs low. Looking at the entire book retail industry, competition is quite diverse. A consumer could purchase books from a bricks and mortar store, which could be a large chain, a non-book retail store, or a small independent store. A consumer could also choose to buy their books on-line. With the onset of Internet bookstores, price is even more of a factor in consumer book purchasing.

3. Buyer power

Buyer power is higher when buyers have more choices. Businesses are forced to add value to their products and services to get loyalty. Many loyalty programs include excellent services that customers demand on-line. Customers want to solve their problems and many times they are more successful on-line than on-phone. Also, we see internet savvy businesses springing up offering more valuable goods and services at lower costs. Now with the advent of eBay, many people are assuming roles as drop shippers. Individuals can have a thriving business selling goods of larger companies without having to carry inventory.

4. Supplier power

Supplier power is higher when buyers have fewer choices from whom to buy. Dropped shipping has increased the amount of suppliers available. All an individual has to do is form an agreement to sell products for the company. The company takes care of all the logistics. The same is true of associates programs that amazon.com offers. Associates allow a webmaster to earn money by recommending products from others. This increases supplier offerings.

5. Threat of substitute

Threat of substitute products or services is high when there are many product alternatives Amazon have. This is different than having many suppliers. Examples of alternatives are exchanging brand names, substituting credit card capabilities, and looking at better values from cheaper sources. Products can substituted by purchasing from companies overseas where labor, services and products are cheaper, but of comparable quality.