Strategic Management

Posted: January 4th, 2023

Unit Name: Strategic Management

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Unit Name: Strategic Management

Question 1

Stakeholders play essential functions in enhancing the development of strategic management. Business leaders should embrace suitable models that make it possible to assess the influence stakeholders have on business operations. Managers should identify an appropriate model to determine how stakeholders such as the government, communities, vendors and suppliers, investors, workers, as well as buyers, impact on strategic management. A proper framework is the salience model that allows the firm to sieve essential stakeholders from the non-essential ones. The three-dimensional structure requires the assessors to consider the urgency, legitimacy together with power of the stakeholders. An example of a company that uses a similar model to assess its stakeholders’ impact in strategic development is Unilever, where stakeholder participation is imperative to grow the business and to attain the ambitious objectives outlined in the Unilever Sustainable Living Plan. The group categorizes stakeholders such as investors, buyers, government and regulators, and its workers as having power, legitimacy, as well as urgent. Therefore, the group does everything within its limits to satisfy these essential stakeholders because they offer valuable insight into how to develop strategic management that positively impacts business operations. 

Question 2

Competition in a particular market has a significant relationship with the underlying economic structure in the region. Competition is likely to be higher when the rivalry among operators is intense, and companies strive to be innovative using the latest technology. The rivalry goes high when new entrants and substitute products threaten the position and stability of the company in the market. The firm would want to develop more appealing products and services by focusing on quality production and customer satisfaction to attract more consumers. Also, the level of competition is high when the government creates policies that enhance competitive operations, and when the level of individual and household income is relatively stable, buyers will gain bargaining power. 

Question 3

Porter’s value chain is an essential tool that helps businesses to transform inputs into outputs in the most effective manner. Practical application of the value chain has a significant impact in identifying the sources of competitive advantage because the firm gets to understand how it handles every process from the time the raw materials arrive at the firm to the point where buyers get maintenance services to uphold the quality and value of the products. The firm is likely to gain a competitive advantage by improving the supporting activities of Porter’s value chain, such as procurement, human resource management, and infrastructure through the use of technology as well as other advanced business tools and frameworks. 

Question 4

Parenting corporations allow businesses to align their strategies under other firms that are relatively stable and can offer much guidance that leads to success. Nonetheless, corporate parenting may have some financial impact on a business unit, and this mostly depends on the corporate parenting style. A holding company that holds at least 80% voting rights and shares in a subsidiary, for example, has the right to offer a consolidated tax return to gain from offsetting the profits from one of the subsidiaries with poor performance from another business. In addition, the parent company has considerable control over the decisions to distribute the benefits from the subsidiary groups. The parent company decides how a franchise uses the profits other than gaining a significant share of the revenue.