Executive Summary Strategic Management is wide and encompasses all functions and thus it seeks to integrate the knowledge and experience gained in various functional areas of management. It enables one to understand and sense of the complex interaction that takes place between different functional areas. In real life there are constraints and complexities, which strategic management deals with. Strategy is about the future. The focus is long term often 5-10 years into the future. It needs operational effectiveness, tradeoffs and fit. The strategy at different levels needs to be in synergy and also consistent. Success of any company depends on how well the company has formulated its strategy. Strategy formulation is not easy, you need to take into account the environment of the company. The steps in strategic management which starts with the vision mission of the company forms the foundation. PESTLE and SWOT analysis is important. It is both subjective and objective. This assignment revolves around the Logistics Business and AJ Brown & Co Ltd. A futuristic model which can help the company to form its Strategy. To compete against the global leaders in the logistics business around the world. A strategy formulation which can make a difference and become a revolution in the business.
Table of Contents Executive Summary……………………………………………………………………………………………… ………………………1
1.0 INTRODUCTION…............................................................................................................. 3 1.1 The Current Environmental Situation Facing the Organization………………...……3 1.2 The Current Strategic Plan……………………………………………………...……4 1.3 Management Role within the Organization……………………………………...…..5 1.4 Environmental Analysis of the Organization……………………………………...…5 1.5 Key Services………………………………………………………………………....6 2.0 STRATEGIC OPTIONS…………………………………………………………………...7 2.1 Proposed goal for the strategic options ……………………………………………..7 2.2 Proposed strategic option with the stakeholder ………………………….. ………...9 2.3 Range of strategic options based on an environment analysis……………………...10 2.4 Strategic Plans goals………………………………………………………………..11 2.5 Strategic option to meet the organizational goals………..………………………… 12 2.6 The most feasible option for their further consideration……………. ……………..14 2.7 The best strategic option in conjunction with the Organizations stakeholder……...15 2.8 Choice of strategic option……... …………………………………………………..16 3.0 STRATEGIC PLAN………………………………………………………………………17 3.1 Organization strategic plan with all of the relevant selection………………...…….17 3.2 The strategic plan appropriate goals that implement the strategic option…………..18 3.3 Communicate the receive strategic plan to the organizational stakeholders………..19 References……………………………………………………………………………………...20
Introduction: A J Brown & Co Ltd started life in 1948, formed by three partners to take over the cartage and customs business started by Archibald John Brown some decades before. These days the company is still owned by its Directors who have been with the firm for many years, and continue to instill in all personnel the highest professional standards which typify the traditional, yet progressive, culture of our company A.J. Brown & Co Ltd with over 50 years of expert assistance to New Zealand importers and exporters, AJ Brown is your choice for smooth, rapid transit of your international consignments into or out of New Zealand. As professional, experienced Customs Brokers and Freight Forwarders they competently and reliably handle all aspects of customer international consignments. From initial discussion of all your available sea freight and air freight options, through the final clearance and carefully delivery anywhere in New Zealand, and around the world . Involving AJ Brown at all stages of the planning and operation of your international consignments will achieve the lowest possible legitimate import duties and best freight rates for the most appropriate service. There in-house expertise, developed over more than 50 years of customs freight industry involvement, has been utilized by a huge number of importers and exporters, for a massive range of good. http://www.ajbrown.co.nz/
1.1 The Current Environmental Situation Facing The Organization. Political: - Tax Policies and Trade Agreements The company operates within various political boundaries. Hence, sometimes certain political boundaries will not facilitate organizations like AJ Brown. Tax policies in different region, Health safety laws, Government involvement in trade unions and agreement Economic: - Exchange Rates
Global economic situations such as recessions and economical situations peculiar to countries such as exchange rates are important when operate globally. Social: - Demands Varies with Regions Society changes from country to country, region to region and town to town. Hence, company should take into various societal factors when it comes to its promotional, communication, and even delivery services. Moreover requirements and need changes according to the region. Technological: - Growing IT Rate of technological change, Spending on research & development, Communication infrastructure, Internet infrastructure and penetration. Legal: - Laws Affecting Business This makes it clear that an organization has to face various legal systems that may affect the organization in different ways. Labor Laws, Consumer laws , Health Safety Laws, Various Standards. Environmental: - Climatic and Weather Issues The focus is on sustainable development. Therefore, company should address various environmental factors that have an effect on its organizational survival. Hence, it is clear that a vivid understanding about the macro environment of the organization is important when it comes to all the aspects of the organization. http://www.strategicmanagementinsight.com/tools/pest-pestel-analysis.html http://pestel-analysis.com/ 1.2 The Current Strategic Plan Long Term Goals:
Independent Freight Forwarding services, to source and arrange for you the most appropriate and economic methods of international transportation for your shipments. Documentation of freight as per the country rules. Company’s market position is based on differentiating itself from rivals through its speed, reliability and provision of services of the highest standard. Company’s strengths are based on Security and Safety of the freight. Preventing freight from localized thefts, Weather etc. Arranging appropriate insurance on your international cargo at competitive rate.
Short Term Goals:
Customs Tariff Classification consultancy, to assist importers to minimize their legitimate Duty liabilities, and minimize their exposure to legislative penalties .
Legal Advices to customer as well as organization so as to get maximum tax benefits Freight Rate negotiation, on your behalf, with a selection of the most trusted Forwarders servicing the region, and subsequent monitoring of those rates for you. Professional Customs Clearance services, for commercial cargo entering or leaving New Zealand. Providing Secure and growth oriented employment for the work force. 1.3 Management Role within the Organization
The roles and responsibilities of each worker are overseen by supervisors, team leaders and managers. Roles and Responsibilities are distributed at every level. To allow for the supervision and management of workers organizations are divided by layers as well as department or functions. The smallest layer at the top of the organizational structure has more responsibility and accountability than the larger layers at the bottom. This forms an organizations hierarchy.
1.4 Environmental Analysis of the Organization SWOT ANALYSIS Strengths The strengths of AJ Brown can be listed out as follows:
AJ Brown is considered among the fastest and most reliable provider of freight delivery services Uses sophisticated technology Has a committed and a highly trained staff Clearly stated policies, procedures, missions, visions, strategies, objectives, etc.Being a well-established organization in the delivery industry, AJ Brown has many strengths, which are not possessed by other players in the industry.
Weaknesses The inherent weakness of the industry are:
Security and transportation Time Limitation Ever Increasing competition
Opportunities
AJ Brown is an organization that operates globally. Hence, it has many opportunities to expand its operations Development of transport and communication technology allows better and speedier service
Threats Threats those are prevalent in the industry are applicable to the AJ Brown as well. The strengths of the organization have been responsible for AJ Brown to be immune to lots of threats from outside.
There is a fierce competition in the market. The inherent threats of the delivery industry such as competition, transportation related threats, security of goods, etc can be considered threats. http://www.businessballs.com/swotanalysisfreetemplate.htm
1.5 Key Services Independent Freight Forwarding services, to source and arrange for you the most appropriate and economic methods of international transportation for your shipments. Consignment Management of all your air and sea freight shipments into and out of New Zealand. Professional Customs Clearance services, for commercial cargo entering or leaving New Zealand. Delivery of imported goods, anywhere in the world. In Auckland we use our own in-house fleet of (currently) 9 trucks and vans. Customs Tariff Classification consultancy, to assist importers to minimize their legitimate Duty liabilities, and minimize their exposure to legislative penalties. Goods storage, long and short term, in our own 10,000 sq.ft. facility near Auckland Airport. MAF approved Sea freight container packing and unpacking, on a regular or casual basis. Distribution services, nationwide, from our Auckland warehouse. Freight Rate negotiation, on your behalf, with a selection of the most trusted Forwarders servicing the region, and subsequent monitoring of those rates for you. Arranging appropriate Insurance on your international cargo at competitive rates. http://www.ajbrown.co.nz/
Organizational Structure:
Owner Managing Director Marketing Manager, Finance Manager Security Officers and Delivery Management Team Delivery Centre Executives
2.0 Strategic Options 2.1 Proposed goal for the strategic options
J. Brown & Ct http://www.tnt.com/corporate/en/site/home/about_us/our_business/business_strategy.html Promising Customers:
Improve Customer Satisfaction Best in class services which are reliable and efficient. Cost effective and Highly Competitive Services
Developing Employees:
Right people and Skills to deliver the promises it makes. The business is committed to staff development. Promotes around 70% of its managers from within the organization, enabling people to have long-term careers.
Value to Stakeholders:
Increasing the Value of company Creating more business
Branding:
Creating Brand World wide Getting a Brand Ambassador for the Company.
2.2 Proposed strategic option will be developed in conjunction with the stakeholder within the existing strategic plan while meeting the organizational needs. SCOPE
DIFFERENTIATION
Organisation
Main Management roles are envisioning future strategy, aligning the Organization to deliver that strategy and embodying change. In AJ Brown stake holders are Owner, Managing Director of the company, Marketing Manager, Finance Manager. They have played the large role in making the strategies for the company growth in future coming five years. Like how much market share they want to grab in next five year, want to become Largest Logistics Company of the New Zealand. They discuss for what all they need how is going to be completed. Finance Manager tells how much finance is required for all. Marketing Manager is discussed what marketing tricks is require for the above stated plan for the future.
http://www.logisticstoday.com/sNO/7869/LT/displayStory.asp
http://www.businessweek.com/magazine/content/04_48/b3910115_mz017. htm
2.3 Range of strategic options based on an environment analysis Political:
Merge or acquire those companies operating in the local markets Built Global networks for taxes benefits Industrial Regulations Standards
Economic:
Creating Jobs Capturing Emerging Markets Taxation Policies
Social:
Customer satisfaction surveys, market surveys, employee surveys play Larger portfolio of company which is Customer oriented. Catering the needs of different regions
Technological:
Mobile Platform IT development Adapting new Technology
Legal:
Health and Safety Laws Labor Laws Consumer Laws
Environmental:
Reducing Carbon Emission Efficient Transportation Environmental Regulations
2.4 Strategic options are consistent with the organisations purpose, directions and values as expressed in the organisations mission statement and strategic plans goals. Current Freight Forwarding Services
Freight Security and Safety Custom Tariff Classificatio n Custom Clearance Services Proposed Promising Customers
P
E economic methods of international transportatio n
S
T
L Documentation of freight as per the country rules
Preventing Localized thefts To assist importers to minimize their legitimate Duty liabilities, and minimize their exposure to legislative penalties P
E
S Cost Improve effective and Customer Highly Satisfaction Competitive Services
E
Safety freight weather Legal Advices to customer as well as organization so as to get maximum tax benefits T L
of from
E Best in class services which are reliable and efficient
Right Promotes Developing people around 70% of Employees and Skills its managers to deliver the promises Valued Creating more business Stakeholders Increasing the Value of company
Branding
Getting a Brand Ambassador
Creating Brand World wide
for the Company.
In reference with 1.2
2.5 For each of the strategic option present feasibility study which assesses the option in term of their ability to meet the organisational goals POLITICAL COST BENEFITS Government
RISK Government
may
Merge or Acquire local
25 K
can grant the
not
give
market companies Built global network
15K
Organization. Expand
OPTIONS
Industrial Regulations
NIL
Standards
grant. the Always risk to
business network
decline the business
We can run our
Always pressure in
Business easily in International market. ECONOMIC If good it will
Creating Jobs
Capturing Emerging
NIL
20k
Markets
Taxation polices
Market. There is always
improve the
not constant
company If it will be in
economy situation. Trends also not
our favor then
stable.
outsources can
25k
increases less charge it will
Taxes
reduce burden on
generally raises not
company as well
reduce.
as Customers. SOCIAL If in our favor it Consumer satisfaction
always
15K
will help to
now
days
Consumer satisfaction doesn't
capture the market. always same. If in our favor it They can also Customer Oriented
20K
Catering the needs of
will help to
Negative work to
capture
our business.
the market. If in our favor it
May not be
will help to the
always in our
different regions.
Nil
IT development
business TECHNOLOGY 30K It will increase by
Mobile Platform
NIL
business scale. Help us for
changing Expensive
Adapting new technology
40K
networking. Improve for New
Should be suitable
Health and safety Laws
technology LEGAL 10K Help to increase
Labor laws
15K
Consumer laws
NIL
favor Always keep
for business Keep changing
the business scale. Help to increase
Can be opposite
the business scale Increase the
to our business Sometimes reduce
business scale
some activities of business due to such law.
Reduce Carbon Emission Efficient transportation
ENVIRONMENT It will be positive
It will never be
NIL
and it make
same.
10K
coordination Can increase
keep changing
scale of business.
2.6 Recommend to the organization the most feasible option for their further consideration.
Political: Built Global Networks Economic: Capture Emerging Markets Social: Customer Satisfaction, Market and Employee Surveys Technological: IT development and Mobile Platform Legal:
Consumers Law
Environmental: Reduce Carbon emission and Environmental Regulations . http://www.ukessays.co.uk/essays/strategic-management/dhl-express-strategicplanning-document.php
2.7 The best strategic option in conjunction with the Organizations stakeholder
Capture Emerging Markets: Mergers and acquisition were identified as a big potential for AJ Brown to increase their market share and strengthen position in Global market. AJ Brown would use power of those smaller competitors, their networks and customer portfolio to gain bigger competitive
advantage. Size of market is limited but there are still gaps and opportunities for logistics companies in Emerging markets. Emerging markets have the potential of high economy growth and despite the influence of economic crisis the growth has slowed down but has not stopped. Therefore it is important for AJ Brown to be present in those countries and invest in active Sales & Marketing. The aim is to continue and expand AJ Brown presence and continuously work on brand and image recognition. The offer of product portfolio cannot be full because AJ Brown would not be profitable if it offers the full range. Customer Satisfaction: It educates employees to actively cooperate and by their attitude interest more customers and work on good relationship with current customers. Closer cooperation with customers and employees brings new innovative ideas and identifies gaps. If the company exactly knows what the customer wants, it helps to work on customization of products and workflows to satisfy their need. Specialization and customization is definitely an important and strong opportunity for AJ Brown and it is one of the most important opportunities I have identified. It also increases dependency that forces customers to stay with AJ Brown. Productivity of AJ Brown will be increased by strengthening of standardized systems, processes and workflows and it will bring the key success factors that customer request: quality, reliability and speed IT development and Mobile Platform: IT is the most important technology factor for logistics business because speed and reliability are equal to success. However, there is an indisputable constant threat of falling behind. Investments to the modernist technologies are evitable and in times of economic crisis are much more important than any time before. Company has to decide if it runs internal IT organization or if it outsources most of the services and reduce cost.
2.8 Justify the choice of strategic option in term of its ability to meet the organization purpose, direction and value of expressed in the organisation mission statement and /or strategic plans goals. Strategic programs represent an area that AJ Brown has already initiated, and as prove by the analysis, they represent important success factors for the organization and it is valuable and worth to continue them. This is an opportunity for the company to make the organization more transparent and start with restructuring initiatives like improvement of
cross-divisional cooperation, work on standardized process workflows, create easy cooperation channels among people in different levels of organizational structure and make redundancies if it is necessary. All these activities will bring lower cost for the company.
Capture Emerging Markets: This will help the company to grow globally and show their presence in the international market. Customer Satisfaction: This is the most important factor in the any business to satisfy the needs of your customer. If the customer is satisfied, company will definitely grow and bring more business to your company. IT development and Mobile Platform: Technological advancement is the need of today business to stay in competition with ever changing market. Moreover to have a deeper penetration in the mobile age it is important factor for the company to have its ace technology.
Strategic Plan 1
Present the organization strategic plan with all of the relevant selection not including the strategic option
Strategic Plan Promising Customers
Developing Employees
Value to Stakeholders
Actions Improve the Services Cost Effective Serving According to the needs of different customer Hiring Right and Skilled People Skill Development programs for employees Promotions at different levels
Expanding business globally Acquiring Small Businesses in International Borders
Resources Technology Transportation Airways Hard working Employees Top Graduates Colleges Business Management Schools Separate Fund Allocation for Employee Development Finance and Legal support Hardworking Top Management
Outcomes Improved Brand Value New Customers More Market Share
Long term Career of employees with the organization Over all development of organization Satisfied Customers
Global Presence Creating a Brand Value Increasing the Size of Organization
Timeline
Contingency Plan
2 year after the implementation
Making the Prices of the services more competitive.
Development program every 3 months Hiring and Promotions every year
Hiring Permanent Mentors for guidance of the employees for the development
2 years in establishing the brand globally As well as Acquiring The small business
Making Collaborations in the other regions with competitors in failing case of strategic plan
Branding
Giving a Brand Hollywood actor, Ambassador to the Sportsperson Company
Promising customers Add Value to the company
1 year to establish company with biggest rivals in market
Advertising on social media and using internet to promote
3.2 The strategic plan appropriate goals that implement the strategic option as outlined CUSTOMER CENTRIC
Understanding the Market, Customer and Employee Providing and Covering every requirement of the each and every customer Focus on Speed, Reliability and Security.
TECHNO – ENVIRO APPROACH
Investing in IT infrastructure and Mobile Services for Ordering, Tracking, Solution in Logistics. Reducing Carbon Emissions in Transportation and Managing the Optimum methods to prevent pollution. Investing in R&D for new innovations and ideas in the logistics.
SUBSTANTIVE GROWTH
Capture Emerging Markets having potential to grow Acquiring small enterprises in the foreign lands which help us to grow Making Competitors felt our presence.
3.3 Communicate the receive strategic plan to the organizational stakeholders so a s to encourage its uptake through understanding, commitment and enthusiasm.
COMMUNICATION METHOD STAKEHOLDER
UNDERSTANDING
COMMITMENT
ENTHUISIASM
Manager
Maintain System Quality Standard of the organization. Provide good services to the customer Work satisfaction by services
Emails, Meetings
Promotions through CEO.
Phone calls, letters
Get good salary Increments. Get Discounts products and services
Staff Customer
Phone calls, Emails
Communicating what is planned is the important part of the Strategic Planning. Each and every member of the organization should know it. This role involve with clear communicating the strategy to internal and external party. The internal party includes the organization and the external party is includes all stakeholders. The next role is aligning the organization to deliver the strategy. Under this role, it is expected that all people in the organization be committed to the strategy. These people should be motivated to follow the strategy and should be empowered to deliver the change. The final role is embodying change. The strategic implementation is highly involved with the organizational change. Thus, strategic leader has a major role of following strategic change process. Now different methods can be adopted to communicate this strategic plan. Annual Company brochure, through company meetings which will be bring enthusiasm and commitment in the employees.
References http://www.ajbrown.co.nz/ http://www.strategicmanagementinsight.com/tools/pest-pestel-analysis.html http://pestel-analysis.com/ http://www.businessballs.com/swotanalysisfreetemplate.htm
http://www.tnt.com/corporate/en/site/home/about_us/our_business/business_strategy.html http://www.logisticstoday.com/sNO/7869/LT/displayStory.asp http://www.businessweek.com/magazine/content/04_48/b3910115_mz017.htm
http://www.ukessays.co.uk/essays/strategic-management/dhl-express-strategic-planning document.php http://www.tnt.com/ http://www.dhl.com/
