Strategic Management for Organizational Sustainability
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|LO1: Critically evaluate the need and importance of strategic management for organizational sustainability and shaping up projects to facilitate global business.|
|Key elements: |
a) Analyze the importance of strategy and understand the benefits of strategic management to shape project landscape.
b) Explain how global projects and environmental sustainability influence strategic.
c) Develop a thorough understanding of the basic model of strategic management and its core components.
d) Analyze common triggering events that act as stimuli for strategic change and strategic decision-making models.
e) Describe the use of the strategic audit as a method for analysing corporate projects and functions.
Question 1 a (L01a): Analyse the importance of strategy rnanagement in helping to shape the project landscape.
[Total 4 marks]
Question lb (L01a): Provide at least four (4) benefits of strategic managernent in helping to shape the project landscape.
[Total 4 marks, 1 marks for each benefit]
Question 2 (L01b): Explain how global projects and environmental sustainability can influence strategy within an organization.
[Total 4 marks, 1 marks for global projects, and 3 marks for environmental sustainability]
Question 3 (L01c): From your studies of different strategic management models, synthesise a thorough understanding of them by discussing the following core components:
- Environmental scanning.
- Strategy formulation.
- Strategy implementation.
- Evaluation and control.
[Total 8 marks, 2 marks for each core component]
Question 4 (LO1d): Using Case Study 1 and assisted by additional research, analyse three (3) common triggering events that could act as a stimuli for strategic change and strategic decision making for both Coca-Cola Co and PepsiCo.
[Total 6 marks, 2 marks for each common triggering event]
Case Study 1: Comparing Coca-Cola and Pepsi’s Business Models
Coca-Cola Co. (CC) and PepsiCo Inc (PC) are very similar businesses in terms of their sector, ideal target consumers and main products. Both are Global leaders in the beverage industry, offering consumers hundreds of various beverage brands. Additionally, both organisations offer secondary products such as consumer packaged goods.On the surface, both have very similar business models. But digging a little deeper, one can find some key differences and key similarities between their two business models that make the organisations what they are today. Below are four key comparisons between the CC and PC business model that make the two organisations fierce competitors and unique organisations.
- Diversified Business Model
PC is a company known for a highly diversified product portfolio, both within the beverage sector and in other industries such as the consumer packaged goods sector. In contrast, CC only focuses on a diversified product portfolio within the beverage sector and has few products outside of that industry. This means PC’s products the snack food category account for more than 50% of its business revenue, while a majority of CC’s revenue comes from the 100-plus beverage products it owns.
- Complementary Products
With PC’s diversified business model, the organisation has been able to acquire or create complementary products in both the food sector and the beverage sector. According to Information Resources, Inc., a market research company, 54% of U.S. consumers polled reported that when they buy a salty snack, they also buy a beverage in the same checkout basket.
- Pushing Into New Markets
Both CC and PC are so large, they face the issue of market saturation. There are not many new or emerging markets that remain untapped for either organization. However, both of thern have made a push into the energy drink category. This push highlights the fact that sales volume for Diet Pepsi and Diet Coke has declined steadily over the past 10 years, according to Time Magazine. What is interesting to note is that Time Magazine also reports that the energy drink segment of the beverage industry has captured year-over-year growth over the past 10 years.
- Efficient Business Operations
With both organizations facing market saturation, CC and PC have made strong commitments to more efficient operations since the turn of the millennium. This allows both organizations to take advantage of the few new and emerging markets left. Since every large market has been fully tapped by the beverage sector, the remaining smaller markets require efficient operations to turn a profit and make a lucrative investment, since the sales volume felt in countries such as the U.S. is not there.
(Source: Comparing Coca-Cola and Pepsi’s Business Models. (2016, investopedia. Retrieved 25 Octobet 2016, from http://www.investopedia.com/articles/markets/081415/comparing-cocacola-and-pepsis-business-models.asp)