Management accounting Essay
As we already discussed in class like which industries you want to participate in; what kind of products and services you want to offer; how to allocate scarce resource and add alee, all those kind of issues should be considered in planning stage and adjust its flexibility In order to realizing that strategic Intent. Question 2 What are the principal reasons for strategic management and thinking? Strategic management plays an important role as it helps in setting detailed goals, analyzing all our internal and external resources, analyzing our external environment, as well as stakeholder views.
If a company want to survival of the fittest, then they should overcome Its uncertainties in the external and Internal environments and achieve expected levels of performance is a real challenge. Strategic thinking focuses on finding and developing unique opportunities to create value, Good strategic thinking uncovers potential opportunities for creating value and challenges assumptions about an organization’s value proposition, so that when the strategic plan Is created, it targets these opportunities. Question 3 How do strategic concepts apply to not for profit organizations and non government organizations?
A non-profit organization has a mission statement that defines its reason for being–whom It intends to serve and what
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Formulation of an effective strategy depends upon the approach to the three main players – the company, Its customers, and the competition, referred as he Strategic Triangle. Market-based. Resources and Customer based strategy. In terms of this approach, strategy is defined as the way the company differentiates itself positively from its competitors, employing its own relative strengths and weaknesses to satisfy better the customer needs. Strategy Formulation Strategy Implementation Strategy Formulation includes planning and decision-making involved in developing organization’s strategic goals and plans.
Strategy Implementation involves all those means related to executing the strategic plans. In short, Strategy Formulation Is placing the Forces before the action. In short, Strategy Implementation Is managing forces during the action. Strategy Formulation Is an Entrepreneurial Activity based on strategic decision-making. Strategic Implementation is mainly an Administrative 1 OFF on effectiveness. Strategy Implementation emphasizes on efficiency. Strategy Formulation is a rational process.
Strategy Implementation is basically an operational process. (found this table online) Question 5 Identify and briefly explain the different levels of strategy that can apply in an organization 1 . Corporate level strategy: Corporate level strategy occupies the highest bevel of strategic decision-making and covers actions dealing with the objective of the firm, acquisition and allocation of resources and coordination of strategies of various Subs for optimal performance like where our business could completed 2.
Business level strategy: applicable in those organizations, which have different businesses the fundamental concept in SIBS is to identify the independent product/market segments served by an organization like how to complete our corporate. 3. Operational/ Functional level strategy: Decisions at this level within the organization are often ascribed as tactical. Such decisions are guided and constrained by some overall strategic considerations like how to achieve the strategy that we have implemented.
For example: Lampooning, a high-performance sports car manufacture located in Italy. 1 should be located in the developed city like NY, MEL or Shanghai, 2 is to provide high performance, well designed, luxury sports cars, they want their product be differentiated from other competitors. 3 using leading, most advanced technology from (as we known LAM was took over by ‘vow, they can share more advanced manufacturing technology from its parent company), well distribution net Question 6 If strategy has such a long history, why do companies continue to make the same strategic mistakes?
Because what history can approve is what you have performed in the past, manager can have good control within internal issues like well organized control, hire talented stuff but it’s difficult to forecast and analysis future business trend as well as surrounding economic environment. Strategy should focus on a long term strategic intent and flexible, which mean for realizing that intent. Also need to pep learning and continuous renewal or innovations are essential parts of strategy to be adjusted in order to fit current version.
Other reasons like leader personality like whether he or she is an indecisive person which more likely to make strategic mistakes. Question 7 Does anyone outside an organization really care about its strategies? Explain The outside people who holds organization’s shares or have potential interest in this organization; or the competitors who feel this organization can provide leading goods or services among other rivalries, or want to imitate the most popular function for a reticular product more likely want to know the latest information about organization’s strategy.
Question 8 Choose a successful organization and try to identify the reason(s) for its success. How does it deal with the challenges of strategic management? Applying porters five forces model to McDonald’s Power of buyer- as we know that the fast food industry has grown a lot in past years, in such a competitive environment every company is trying to produce products with better quality and at competitive prices so that they can attract more customers. Product.
Thus we can say that the power of buyers is more in the fast food industry Power of supplier- Buyers does not have a significant bargaining power because the companies in the fast food industry get their supplies chain from various outlets provided by its franchiser, thus buyers have a very little or no bargaining power. Threat of new entrant- McDonald’s as a franchise they have a rules like only one store could be running in specific area in order to make relatively fair markets, but it’s easy for a new competitor to enter the market and introduce products at competitive prices if they want.
Threat of substitutes- the substitute products involve products available in the grocery shops or the restaurants or the food products such as pizza. These substitute products are easily available to the customer and customers tend to perceive these products as better in quality and value for money. Also relatively lower entering cost, lower technological requirement. What they need is to provide good quality food with fantastic taste. Industry competitiveness- McDonald’s face a lot of competition not only from the other competitors in the fast food industry but also from other industries producing substitute products. Entry into a market is easy then rivalry is likely to be high. Considering McDonald’s competitive rivalry, there is intense competition in fast food industry that many small fast food businesses fight with each other to improve their customer base, like provide wide range of services like delivery or lower purchase cost then Mac. Question 9 Can more than one firm have a competitive advantage in an industry at the same time?. Yes they can. Competitive advantage means superior performance relative to other competitors in the same industry or superior performance relative to the industry average.
So generally speaking it can mean anything that an organization does better compared to its competitors. Like Virgin- famous budget Airlines, they are focus on cost leadership that to cut all unnecessary related to air traveling so that they can provide lower ticket price compared to other airlines. Whereas Singapore airlines want to service customer with differentiation strategy as they could provide different class service to customer and superior customer services. Both of this two firms are success in this field but they have different competitive advantage from one another.