Assignment Brief
Students are asked to develop a strategy for Matalan for the next 3-5 years.
The individual report should consist of the following 6 sections. For each section I will provide suggestions on what students could cover but these are not restrictive. I will outline all the frameworks and tools you have in your disposal but that does not mean that you have to use all of them. However, failure to use any of the recommended frameworks under each section will result in no marks for that section. What you need to have in mind is that each section has a goal that you need to meet. For each section thereof you need to draw some “conclusions”, take them with you and complete the next sections. These “conclusions” need to be critically justified. Therefore, ensure that you critically justify your findings/arguments in each section.
The term critically justify implies that you need to demonstrate coherent understanding and application of any theories or frameworks used and that the ideas/arguments/discussions presented in your report are supported by relevant high quality academic sources. Industry/firm reports and documents, news articles etc can be used, but these should be appropriately evidenced/ cited and supported by high quality academic sources.
Your final strategy needs to be informed by all the previous sections. So, the strategy that the company should implement needs to be justifiable by all the previous analysis.
(1) Introduction
Introduce the company, its products, the market it operates, define your industry, define your target market.
Briefly assess whether the company is doing well or bad at the moment.
(2) Internal Analysis
The Goal of the Internal analysis is to identify your company’s; (1) Capabilities/Strengths and value adding activities (2) Weaknesses (3) Internal Competitive advantage.
To achieve this goal, you can use all or a combination of the following frameworks/suggestions (marks are not allocated based on how many models/frameworks you have used rather if you have used them correctly and if you have achieved the goal of the internal analysis):
- Value Chain
o Identify your company’s primary and supplementary activities
o How these activities add value to your company
o Incorporation of these activities/resources in the Resources & Capabilities table and any weaknesses in the Weaknesses table
- Resources & Capabilities table
o Identify your company’s resources and briefIy discuss the corresponding capabilities (you can use a table if you wish)
- Test the Distinctive Capabilities through VRIO model to identify your company’s competitive advantage
o Briefly discuss the conclusions from VRIO - What is your competitive advantage e and why you believe so?
- Weaknesses table
o Identify your company’s weaknesses and provide a short term and long-term solution (you can use a table if you wish)
(3) External Analysis
The Goal of the External analysis is to identify how the industry and the country/countries your firm operates can affect the development of its strategy. The Goals of the External analyses are (1) Assess the attractiveness of the industry you operate (2) perform a Competitors’ anaIysis (3) identify Macro
- environmental factors affecting your industry and consequently your firm
To achieve this goal, you can use all or a combination of the following frameworks/suggestions (marks are not allocated based on how many models/frameworks you have used rather if you have used them correctly and if you have achieved the goal of the external analysis):
- The external analysis is conducted at an industry level - Define your industry - Be specific
- Five forces to identify the attractiveness of the industry you operate
o Identify the forces (low-medium-high)
o Discussion on the attractiveness of the industry (is it attractive yes/no why?)
o What does this mean for your company? (opportunities and threats)
- Identify your company’s strategic position AND your competitors’ strategic position
o Porter’s 3 generic strategies OR
o Bowman’s cIock
o Position your firm and the competitors, justify why you think they follow this strategic position, discuss if this positioning is an opportunity or threat for your company
- Competitors’ Benchmarking to identify the Competitors strengths and weaknesses
o Critical evaluation of your findings - are there any opportunities or threats for your firm?
- PESTEL
o You can use a table to identify as many RELEVANT macro-environmental trends currently taking place in the country/countries your firm operates, that can affect your industry and consequently, your firm
o Select any 3 KEY trends to discuss further 一 discuss their impact to your industry, to your firm and your future strategic planning (opportunities/threats?)
(4) SWOT analysis
In this module SWOT analysis is used as a summary tool 一 meaning that you use it to summarise existing information.
Strengths & Weaknesses: Should come from your internal analysis ONLY.
Opportunities & Threats: Should come from your external analysis ONLY.
SWOT should NOT include any new information 一 you need to populate the SWOT table using existing information from your previous analysis.
You don’t have to expIain the SWOT anaIysis in a separate paragraph the tabIe shouId suffice.
(5) TOWS matrix
In the TOWS matrix you are going to combine the data you gathered from the Internal and External analyses, and you will come up with tactics/ideas. It is the brainstorming stage.
The way you are going to combine the data is as follows:
Strengths & Opportunities: What strengths do you need to utilise to pursue one or more of the opportunities which you have identified? Combine this information to come with one or more tactics/ideas
Strengths & Threats: What strengths do you need to utilise to overcome one or more of the threats you identified? Combine this information to come with one or more tactics/ideas
Opportunities & Weaknesses: What weaknesses will you address by pursuing one or more of the opportunities you identified? Combine this information to come with one or more tactics/ideas
Threats & Weaknesses: Come up with ideas help you address some of your weaknesses while overcoming some of your threats at the same time.
All these tactics/ideas can be included inside the TOWS matrix. One/two sentences for each idea/tactic clearly showing which opportunities + strengths etc you combined. You do not have to explain the TOWS matrix in a separate paragraph, the table should suffice.
(6) ANSOFF matrix
In the ANSOFF matrix you need to position your tactics/ideas from the TOWS matrix inside the right strategy i.e. Market penetration, market development, product development, diversification.
From the four strategies and corresponding tactics identified earlier; you need to select two to analyse further. Whichever two you choose to discuss is up to you. One (critically explicit) paragraph for each strategy (and corresponding tactic) needs to be included. These two paragraphs are crucial as they serve as the“seIIing point”for the report. These paragraphs can discuss the following but are not limited to:
• Does this strategy and corresponding tactic address any opportunities and/or overcome threats? How will the industry forces/ Competition/ Macro-factors affect your strategic option?
• By following this strategy and corresponding tactic do you capitalise on your competitive advantage? Yes? No? How? If you have not identified a competitive advantage in the internal analysis, does this strategy and corresponding tactic help you build one?
• Implementation plan: how are you going to implement this strategy and corresponding tactic? Have you implemented this strategy before (as a company)? Yes/no? was it successful? Is there a reason why you have not implemented it before?
▫ Market penetration - explain how you will retain and increase your market share. Ideas: how will you deal with the competitors, what kinds of additional services can you offer to attract new customers, e.g. an advertisement you want to run, etc.
▫ Product development 一 explain the process of developing new product/service and how this will add value to the company. Ideas: invest in R&D, or acquire a company that has the knowledge/technology you are after, explain how and why customers will value the new product
▫ Market development 一 explain which country you plan to enter and provide a critical discussion on how intend to enter it.
▫ Diversification 一 combine the discussion from product development and market development. If you are entering a new industry with a new product, provide some additional information about the new industry, e.g. how attractive is it? how competitive it is, does it have room for investment etc.
• Based on the assessment of your firm’s current conditions (doing good or bad from the introduction section) how does this strategy and corresponding tactic help? For example, does it turn around the bad performance? Or builds upon current success?
The main discussion should be in paragraphs but feel free to use tables/ graphs/ images to support your arguments.
(7) SAFe criteria
From the two strategies and corresponding tactics identified in the earlier sections, you now need to assess which ones are viable, using the SAFe criteria. Which one(s) are you going to select? The one(s) that will best pass the SAFe criteria.
You need to test both strategies and corresponding tactic via the SAFe criteria and the strategy that pass ALL SAFe criteria is/are the one(s) that you are going to suggest to the board of directors. In two separate paragraphs (one for each strategy and corresponding tactic) you need to explain/justify why this strategy and corresponding tactic is or is not suitable, acceptable and feasible.
NOTE 1: If more than one strategy and corresponding tactic passes the SAFe criteria when assessed individually, you should consider how well these options relate to each other and make a clear recommendation about how your board of directors should proceed: should they chose one (which one and why), should several options be pursued – if so why does that makes sense (e.g. how do they enhance each other), should one come before the other (suggesting sequential implementation and why) etc.
SAFe
(1) Suitability check list:
Does it capitalise (uses effectively) on your firm’s strengths and capabilities? (as identified in your internal analysis)
Fixes a weakness? (as identified in your internal analysis)
Does it exploit the opportunities you identified (as identified in your external analysis)
Does it overcome the threats? (as identified in your external analysis)
Yes or No and why? Please remember that, as with all SAFe criteria, the answer is typically not a clear yes or no, but every option will address some points mentioned above very well, others not so well and some not at all. Therefore, it is up to you, on the bases of your analysis to make an overall assessment around whether you believe the suitability criteria is sufficiently met and can pass (yes) or the option is not suitable, overall (no).
Check Lecture 6 as well for additional criteria.
(2) Acceptability check list:
There are three key aspects of acceptability – the “3 R’s” (Risk – Return – Reactions):
1. Is the level of risk acceptable? Risk can be assessed using, for example: Sensitivity analysis, Financial risk, Break-even analysis.
NOTE: I do NOT expect a detailed risk analysis - I expect you to demonstrate that some general risk considerations have been taken into account and to use your critical thinking and make an informed decision (based on arguments/data etc) on whether a strategy is acceptable in terms of the involved risks or not. A narrative discussion.
2. Is the likely ROI acceptable? ROI can be assessed using: Financial analysis, Shareholder value analysis, Cost一benefit analysis, Real options.
NOTE: Same as above - I expect a narrative analysis/judgement on whether this strategy will generate profits and how soon.
3. Will stakeholders’reaction be positive?
You need to go back to your stakeholders’ mapping and discussion – critically explain if your key stakeholders will have positive reactions or not.
Yes or No and why? Consider the risk level, the ROI and add them to the stakeholders’ discussion.
(3) Feasibility check list:
Three core questions to consider:
Can the strategy be financed? Do we have the money? Financial statements/balance sheets that prove the profitability of your company. In plain words, do you have the money or any money generating assets that you can use to pursue your selected strategy?
Do people and their skills exist to implement the strategy OR they should be obtained? Do you have the personnel you need to pursue this strategy (e.g. Scientists if you invest in R&D etc) (yes/no are they enough?) OR will you have to recruit? (Can you do it? Money? Time?)
Do the capabilities exist to implement the strategy OR can they be obtained?
Value chain – Are your processes effective and efficient? Can you support this strategy?
Yes or No and why? Again, remember that the answer is typically not a clear yes or no, but every option will address some points mentioned above very well, others not as well and some not at all. Therefore, it is up to you considering all your analysis, to make an overall assessment as to whether you believe the feasibility criteria is sufficiently met and can pass (yes) or the option is not feasible, overall (no).