IntroductionLee and Sing Company is a leading family group of company , diversified business entity in the business operations all over the SriLanka. Lee and Sing was doing well inlast ten years and company leadership was changed after a decade, for last 10 years company hadexpanded in a big way. The company has ventures in retail, hospitality, healthcareand entertainment. Being services based player, Lee and Sing had to haveleadership and employees who had different approach from a product basedorganization, especially when it came to strategic issues.Founder of Lee and Sing company believed in a unified, comprehensive andintegrated plan that is designed to assure the basic objective of theenterprise, which basically translated to delighting and retaining thecustomers by differentiating from the competitors. With the competition rivalrythey didn’t changes strategies, which results started to show negative trendsquarter after quarter as well asthroughout the year. Assumptions1. Competition changed, but the companydidn’t alter its policy towards the competitors.
2. Companies neither expanded nor diversifiedand were obsessed only with operational effectiveness.3. A turnaround was called for, however, thenew management was yet to get a firm grip on the whole organization. 4.
Divestment was not even considered as thecompany wanted to make their presence continue even though competitiveadvantages were lacking vis-à-vis the competitors. 5. Triggering events like New CEO, threat ofchange in ownership, for initiation of new strategies was never taken upseriously.
6. Variables changed but the company wasblindly following the old SWOT and PEST analysis related findings. Content1.
1 . Lee & Sing had no latest environmental scanning, blindly following outdated SWOT and PESTAL A SWOT analysis is a commonstrategic planning method that involves identifying a company’s strengths,weaknesses, opportunities and threats to inform business decisions. Updated PESTAL analysis will guide you to think critically about the various factorswhich affected to their stagnated business and how to take steps to capitalizeon strengths and opportunities, while limiting weaknesses and threats, performingthis analysis, the company will be able to utilize resources moreefficiently, improve operations, discover new opportunities, deal with risksand occupy a competitive position in the market. so following an outdated SWOTmade issues to strategic management of the company 1.1Triggering events of the company were not adopted properly Triggeringevent is something that acts as a stimulus for a change in strategy or somesort of a shock to the system to get management to seriously reassess the cooperation’s situation. with the arrival of new CEO, threat of change in ownership, forinitiation of new strategies, performance gap were nottaken seriously 1.
2 How do you think strategic managementrelated issues got affected due to the change in competition, and the companydidn’t alter its policies towards the competitors?Competitive advantages arenot permanent. A company should continuously adjust, adapt and evolve itcompetitive advantages and positioning to respond to changes incustomer preference, challenges from competitors, and changes within thecompany itself. Competitors as new opportunities and threats may open atany time.
As per the analysis done by XYZconsultation , Lee & Sing companyhad not altered its policies towards competitors and not focused on change in competition, So it has become essential requirement to critically analyze the changein competition and competitor challenges by doing a Porter’s five forces analysis. Threats of New EntrantsHave a sound knowledge of market awareness ,Innovation,new ways of doing things, put pressure on all service ventures, lower pricingstrategy, reducing costs, and providingnew value propositions to the customers are needed. Lee & Sing should manage all these challenges and buildeffective barriers to safeguard its competitive edge and face the threats ofnew entrants successfully. Bargaining Power of SuppliersThe presence ofpowerful suppliers reduces the profit potential in an industry.
Suppliersincrease competition within an industry by threatening to raise prices orreduce the quality of goods and services. As a result, they reduceprofitability in an industry where companies cannot recover cost increases intheir own prices.. Bargaining Power of BuyersBuyers can also demand higher quality of services orproducts, and increase competitiveness by forcing different companies intoprice wars. All of these factors end up decreasing the attractiveness ofthe industry bylowering its profitability. Bargaining power of buyers is strong and powerful, so Lee & Sing shouldtake special attention to safe guard their profitability as well as the CRM. Threats of Substitute Products or ServicesA company appears in all price ranges, with variations in thelevels of service and the amenities. The constant challenge will always be toget the customers to choose your services over the competitors.
With thetechnological advancements, the internet makes the overall market to be moreefficient while expanding the size of the potential market and creating the newsubstitution threats. So considering the potency of this industry it is vital to have a superb strategic plan and Lee & Sing must be service oriented rather than just being productoriented. Rivalry among the Existing CompetitorsThe rivalry amongstthe competitors in the service industryis fierce.
it will drivedown prices and decrease the overall profitability of the industry. While onthe competitor battle if company lost it may be hard to regain, So Lee & Singe should seek the best prices for the best experienceand the tendency is to reduce the prices to a competitive level. 1.3.
What can you make out from the fact thatthe company neither expanded nor diversified and were obsessed with operationaleffectiveness for one long year after John taking over as the CEO? After carefully analyzing the given scenario clearidentification is shown that Lee &Singe have not diversified or expanded. Sothe time is high for them to follow Ansoff matrix strategies and increase thebusiness growth. PenetrationMarket penetration strategy is thepreferred route to grow for many businesses because it appears safe .Focus ison selling more of the existing products to the existing customers to emphasisis on increasing market share through aggressive marketing promotions. Aggressive market penetration strategies willincrease competitive rivalries in the industry. Product DevelopmentIn product development, businesses continueto focus on the needs of current customers and the wider customer market theyrepresent but they seek to understand their underlying needs and wantsbetter so they can see opportunities for new products. Market DevelopmentIt’s a must requirement to hunt for new markets and distribution channels toexpand the business.
Effective market researchand further segmentation of markets helps to identify new groups ofcustomers, and also service availability and visibility on the Internet through a necessary search engine optimizationcreate paths for online shoppers ratherthan company only rely on offline marketing .. DiversificationThis involves moving newproducts into new markets at the same time. In a way which is risky strategy, but proper diversifying intonew products and service lines can provide an effective path to fast growth, asyou sell more products to existing customers or establish new markets. But it’svital to weigh up the risks as well as the opportunities. 1.
4. List out four things along with reasons,you would do as John to turn around the company Turning around a struggling business to athriving status is a complex process, sowill suggest four main strategies to turnaround Lee & Sing company.1. Situation reevaluationThe first step that you need to follow is tofigure out whether your business is damaged beyond repair or not. If not, thenyou need to look within the organization to figure out what the problems are.Only when you reevaluate the situation you can decide what actions can be taken next, toachieve this you need to focus on some key areas as below Service –itis important to focus on whether the service or the products you are offering are innovative enough,unique enough and buyable enough for the consumers.Customers –You need to figure out whether your consumers are satisfied with the productsbeing offered to them and is the right target audience being targeted.Finance –Is the cash flow enough to sustain the business’s operations? Do you have shortterm financing to stabilize the situation?Process –You must fathom whether all your business processes and systems are in placeand working effectively.
Without this, business performance can go downconsiderably.People – It may be time tofigure out whether your business is supported by the right people and staff.Employees play a big role in any organization’s success and hence you may haveto cut down on few who may not be providing a good output.
3. Strategy redefiningThe next step to follow in order toturnaround the business effectively is to redefine the current strategies are being followed, though Mr Mark believedunified, comprehensive and integrated plans which were not transferred to his brother MrJohn properly and he was depending on outdated SWOT and PESTAL. If thecorporation is on a downward spiral, then one of the biggest reasons behindthis could be a gap in the strategy.
This is the step where you can make allthe difference for the future of the organization and give it a new direction.Revisiting the strategic approach can also make you focused on key areas suchas vision ,Purpose ,Brand ,Mission ,Values of the company . Soredefining the strategies with theguidance of industry expertise will lead the company to its goals. 3. Employee retention and restructuring It’s difficult toturnaround a company without talkingabout the people involved in it. It is the employees which run a business andno matter how your finances are, how good your strategies are , if the employeesare backing it and notperforming well, there is no way for it to succeed.
Now may be the right timeto figure out who really is offering thebest services and which industry retail, hospitality, healthcare orentertainment giving contribution to the Lee & Singh group of company and whichindustry are not contributing as per expectations.At this step, need to takethe decision of reemploying people, restructuring unperformed companies eliminating the weaker links and retainingthose who are crucial to your business. To revive a business, it is importantto retain the right people on board and strengthen potential business sources. 4. Become digitalAs the world is moving towards technologicaladvancements and development, it is important to move ahead with it. Mostconsumers and customers these days look online for buying products and servicesand the industry demands you to godigital. Going the digital route is not just theneed of the hour but also the demand of the consumers. Introduce latestsystems, online technologies and online marketing in your strategy to gain themaximum in the current circumstances.
Going digital also gives you an edge overyour competitors and puts you in the league of those who are already gaininghuge profits through online marketing and sales.The internet offers you a superb opportunityto reinvent yourself and bounce back hard. It is no doubt that the internet haschanged the world, the way businesses work and the way consumers buy. So tocomplete the process of your corporate turnaround, it is important to have agood website, a strong SEO centricapproach, e-commerce facilityas well as social media presence. Conclusion and recommendation The importance of strategic management theories have been noted several times in this report.
Agood performance of a company roots from the strategic decisions. Evaluatecurrent performance results in terms of return on investment, profitability, and soforth, the current mission, objectives, strategies, and policies. Reviewcorporate governance that is, the performance of the firm’s board of directorsand top management should scan and assess the external and internal environment to determine the strategic factorsthat pose opportunities and threats as well as determine the strategic factorsthat are strengths and weaknesses. Analyzestrategic (SWOT) factors to pinpointproblem areas and review and revise thecorporate mission and objectives. Lee and Sing should Generate, evaluate, and select the bestalternative strategy in light of the analysis conducted and implement selectedstrategies via programs, budgets, and procedures, then evaluate implementedstrategies via feedback systems, and the control of activities to ensure theirminimum deviation from plans. This rational approach to strategic decisionmaking has been used successfully in leading corporations and results were oriented.