Strategy Implementation, Evaluation and Control
Purpose of Assignment
Weeks 3, 4 and 5 Individual Assignments are integrated to generate a Strategic Management Plan. This is part three of the three part Strategic Management Plan addressing strategy implementation, evaluation and control. The purpose of the Week 5 individual assignment is to allow the student to discuss and explain how the strategies discussed in prior weeks are converted into implementation activities both domestically and internationally, in alignment with legal, social and ethical considerations. Furthermore, the student has an opportunity to explain and discuss how the strategic plan and implementation activities will be monitored.
Weeks 3, 4, and 5 Individual Assignments are integrated to generate a Strategic Management Plan. This is Part 3 of the three part Strategic Management Plan.
Assignment Steps Write a 800-1,050-word (maximum) report on the company you selected in Week 3, following up on the Individual Assignment of Week 3 (Environmental Scanning), and address the following:
•Strategy Implementation ◦Discuss International Strategy. ◦Discuss Strategic Implementation. ◦Explain the influence of Governance and Ethics. ◦Discuss the Company Social Value. ◦Discuss Innovation and Diversification. ◦Discuss Legal limitations.
•Evaluation and Control ◦Explain Strategic Metrics. ◦Discuss Key Financial Ratios.
Cite at least 3 scholarly references.
Format your paper consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.
**Use Attachments as References (Use Same Company in Paper)**
September 5, 2017
A strategic management plan is a process an organization uses to define its strategy and direction and to make decisions on how resources will be allocated in order to pursue that strategy. It may, however, extend to control mechanisms that guide the strategy implementation. It has four different functions. These functions are strategy formulation (the process of choosing the most suitable course of action in order to achieve defined goals), strategy implementation (translating the selected strategy into action to achieve said goals), evaluation (the assessment process that provides performance information on programs, activities and projects towards meeting the said goals) and control (controls execution and formation of the strategic plans). Also, environmental scanning is another function.
Environmental scanning refers to the process which surveys and interprets relevant data systematically to identify opportunities and threats that affect the company from an external point (Hambrick, 2012). Information is gathered from the external world, especially from competitors and the company itself. The response is usually by changing plans and strategies if or when a need arises. For my case, I am going to select a company and perform an environmental scan on the specific company.
The company of choice is Target Corporations. Target has a mission to be the shopping destination of choice for their customers by achieving their “Expect More. Pay Less.” brand. They deliver continuous innovation, outstanding value, and wonderful guest experience. It is an expansion of Dayton Company. The stores under Target Corporations offer shoes, clothing, jewelry, electronics, health and beauty products and a variety of household supplies. Target has expanded all the way to Canada as of now.
The internal environment for Target helps outline its profit potential and strategic competitiveness. One of the internal factors includes the barrier of entry into the retail industry. The threat of industry is low in target because they have already stablished themselves in the retail market, and have grown to own stores all over the USA and some parts of Canada. Their market has already grown. The bargaining power of their supplier is low also for the same reason-they have already established their name in the market. Buyers also have little to no bargaining power at the target, so it stands to benefit the company as they choose a fixed price to sell their products (Mintzberg, 2010). New partnerships with companies like McDonalds have reduced the threat for substitute products since Target customer are offered variety and functionality inside one Target store.
Stiff competition is, however, a challenge; due to many more discount retailer companies and corporations in the United States. Homogenous products also give customers an alternative to shopping with the competitors. High fixed costs like employee wages and leasing are also an internal environment.
Target’s external environment includes global, economic, demographic, legal/political, cultural and technological factors. Global events such as natural disasters, terrorism, international financial crises and pandemic outbreaks in supplying countries lead to fluctuation or reduction of raw materials, which then affects profit margins. Loss of inventory and stock merchandise may also be a result of natural disaster, leading to great losses.
Political instability, high transportation costs and tariffs and trade restrictions affect Target and other discount retailers negatively. Social media growth has affected Target negatively since online shopping is currently the go-to. The two-way interaction is preferred by customers. Competitor developments, whereby companies such as Wal-Mart have developed their online ordering systems and even developed a website, Walmart.com, to serve their customers affected store retailers like Target negatively until they did the same.
Socio-cultural forces such as how customers value their time and would prefer to shop with as little time as possible affect Target, who have upped their service to keep up with this. Target values community and annually five percent of its income goes to supporting the local communities where the stores have been stationed.
Target’s main competitors are Walmart and Winners, especially in Canada. Walmart offers similar goods, and it also caters to lower-income customer, as compared to target, which increases their customer range. Winners have goods with trendy brand-mane products and still offer them at prices similar to Targets. Consumer behavior such as marketing mix and psychological influences, situational influence and social-cultural influences also affect Target’s ability to perform in the market.
Target’s competitive advantage comes in that they have already established a market and are well-known. They face very stiff competition from Wal-Mart, Safeway, and Costco. Target has set their prices strategically low in a way that still ensures hey maintain profit levels while servicing their customers satisfactorily. Target has control on the freshness and good quality of its products. Thus in August, the target was able to surpass Walmart as the cheapest retailer, according to Bloomberg.
Through technological strategies, Target has now developed mobile applications, websites and social media avenues to ensure they expand their market by moving closer to the customers and not waiting for them. By taking over their food distribution centers, inventory inconsistencies from third parties have been reduced. More work, however, has to be done in terms of expanding to a worldwide market as Wal-Mart is doing a much better job in that sector. Efforts to keep up with Wal-Mart have been made whereby Target has remodeled to the format of smaller stores to control or manage increasing costs in real estate. Attractive lane displays increase and improve customer shopping experience.
The strategic effectiveness of some of the measures applied by the target is successful, except for the problem that came while trying to expand to Canada. Target acquired losses in billions of dollars when they were forced to close over 124 stores in the year 2015 (Abel & Hammond, 2017).
Their strategic plan is mostly successful, as Target is seen as a fun place during shopping, and customers are not as hostile to it as they are to related companies such as Wal-Mart. Their strong expertise in marketing and investing in a whole variety of good has worked in their favor since they hold profitable sections of the retail market. Younger customers are more attracted to target due to its general appearance of being fashionable, and also because of online shopping that college students and their peers are fond of.
Generally, when developing a strategic management plan and doing an environmental scan, it is important to plan effectively and along with possible parameters such as the plan, the executable and has greater chances of being effective.
Abell, D. F., & Hammond, J. S., (2017). Strategic marketing planning: problems and analytical approaches (Vol. 1). Prentice Hall.
Hambrick, D. C. (2012). Environmental scanning and organizational strategy. Strategic Management Journal, 3(2), 159-174.
Mintzberg, H. (2010). The rise and fall of strategic planning. Pearson Education.