Cohesion Case Study
1. Introduction
Successful strategy implementation is key for an organization to thrive. Strategy implementation is interchange of several elements where the chosen strategy is the core. Globally organizations spend billions in time and money to develop strategy however implementation is an afterthought. As a result only 10 to 30 percent of strategies developed worldwide are implemented. This is due to diminishing resources, poor reward systems, poor policies, rapid technological changes and advances that require and increasingly adaptive and sophisticated workforce and organizational culture. An organization’s culture has a tremendous impact on the performance of the entity; therefore, Shoprite Checkers has enhanced and supported strategy implementation in its organization through a conducive organizational culture.
1.1 Whether Shoprite Checkers’ organizational culture supports the chosen strategy-culture relationship
G.K (2015), states that organizational culture is an integral part of strategic implementation for any organization that aims to attain its future goals and objectives. Shoprite Checkers’ management has strategized and developed an integrating framework which has been accepted with majority of team members. Shoprite Checkers should has understood how to change an organizational culture and the altering components that may impact cultural development within the organization. The organization’s management is convincing and have the ability to influence. The firm has won over the trust of their team members to be able to present any change by being honest and sticking to the facts. Management must have a process in presenting the change to the team and their roles in the change. It should consist of realistic goals and expectations for the future of the organization. Each team member should have clarity on their part in making the change successful. Implementing change without it being define and well explain and detailed can cause bad reactions from team members, and cause the implementing of the cultural change a challenge for management. Management must understand that the change of processes and the way they do business can become frustrating and cause a strain on the work environment for team members to get accustom to. They should ensure that all information being shared during the change is given and understood by all team members so the impact of the cultural change want hinder the work environment. Besides, the company’s culture has clearly stated the vision and purpose of the chosen strategy culture. The employees are aware of what is happening, why the change is happening, and when it is happening. Being transparent and communicative with the vision will help all members be on the same page. When employees have a clear definition and understanding of the change, they gain expertise on what is expected from them to be part of the change (G.K, 2015). If employees are being resistant to the change, maintain visibility, be more accessible for impromptu conversations, and keep employees regularly updated.
2. Why the balanced scorecard is a powerful strategy evaluation framework in the context of Shoprite Checkers
The scorecard has enabled Shoprite Checker’s employees to focus on specific objectives once they attain a better indulgent of what is expected of them. According to Litwa (2017), scorecard helps firms to create good communication system win which its resources are shared properly and aid in promoting harmony at all times. Despite the fact that the application of a scorecard is a real business strategy, its application and use for Shoprite Checkers has proven to be demanding. Moreover, risk mitigation is taking precautionary measures to reduce adverse effects of risks. For the reason mentioned, the institute tries to keep a balance between taking risks and offering rewards. The risk mitigation strategies in the selected entity are risk limitation, avoidance, and acceptance as well as the transfer. The Shoprite Checkers offers credit in consideration of the credit reports which entails one’s capacity, capital, economic condition as well as collateral values to minimize future risks associated with credit giving. The scorecard helps the company during the crisis period in balancing the application of an effective and good strategy with the dynamic setting the firm confronted through providing an amicable resolution (Litwa, 2017). Furthermore, Shoprite Checker’s performance would merely be gauged on its strategic position. The view was changed with incorporation of the scorecard which allowed the company to develop some strategic processes consistent with its objectives. The entity is in collaboration with large corporations in the nation, and they are known to employ a consultative approach in the course of their activities. Strikingly, consultation is vital in the acquisition of quantifiable results, integrity as well as ample knowledge on the trends in the market. However, the management has to deal with the adverse effects of economic changes such as housing and employment in the country. Furthermore, the operational risk taken into account is that they do not give loss provisions due to the instances of unemployment as well as unfavorable home prices. The compliance risks associated with this firm as well as others in the field are poor quality loan portfolio. All the same, the hazard is brought about by the slow and uneven economic recovery resulted in shutting down by the state as well as fiscal policies hence a problem to future growth.
2.1 How each of the continuous improvement practices assist to competitive advantage
According to Malheiros, Paim and Mendonça (2009), continuous improvement is very critical in an organization because this will help them adapt and respond with the changes that are happening in the environment. Having strategies or tools to address these changes will enable organizations to maintain their competitive advantage and sustain the operation of their respective companies. Knowledge management on the other hand deals with how organizations utilize the knowledge that it has in its disposal or repository. This knowledge was acquired internally and externally and is relevant to the operation of the company. In line with this, the strategies and tools that a company has are included in the knowledge management system that it possesses (Malheiros, Paim and Mendonça, 2009). Moreover, aside from acquisition, knowledge management system also involves knowledge interpretation, utilization and distribution. This means that a company should always educate their employees every time that there are new or improve systems or process that it will be implementing in its operation to improve its level of productivity. Educating their employees will provide them insights as to the direction that the company is trying to take. It will also give them an idea as to the roles that they need to play in the attainment of the goals of the organization. Malheiros, Paim and Mendonça (2009), armed with the proper knowledge on continuous improvement, employees will become more efficient and effective in doing their jobs therefore increasing their level of productivity which in turn improve the productivity and output of the company. Remember that Shoprite Checker’s environment is dynamic and learning is a continuous process and companies need to adapt or else they will be left behind by their competitor, thus, the direct relationship between continuous improvement and knowledge management.
3. Shoprite Checker’s Business Model Canvas and how to achieve a sustainable competitive advantage against their competitors
A business model canvas is a visible representation of the current or new business model and in most cases used by strategic managers (Delfitriani, 2019). Every individual has a unique way of the business modeling depending on the market segment. Notably, the management will comprehend value proposition, customer relations, business channel and cost structures for the product line. The canvas provides a useful comparative analysis and a holistic view of the business as a whole. Also, it provides an analysis of an increase of investment and its impact on other contributing factors. For a fact, the business model canvas gives managers a common language, which they can use in bringing innovation to their business models. It is important for Shoprite Checker’s management to identify all cost involved in running that business. Shoprite Checkers is one of the successful companies in South Africa that use the Model business canvas in its operations. To understand the operation of Shoprite Checkers better, five business model canvas components will be used. They include delivering the lowest prices through customer segment, increased efficiency, advanced supply chain, customer relationship, and key activities.
3.1 Customer segment
The customer segment is an essential part of the business model since the main aim of any organization is to meet the expectation of their customers. The product features must be aligned with the segments characteristics and specific needs. Furthermore, it is important for the organization to understand the taste and preference of their customers. The company has four segments: Supermarkets Non-RSA, Furniture, Supermarkets RSA, and other operating segments. Its main business is food vending to customers of all income levels.
3.2 Increased efficiency
The effective and efficient management of any business depends on how effective its organizational structure is. An organization structure is said to be a formal system of working relationships in which tasks are both separated and integrated. By separating tasks, more clarity is made on who should do what and by integrating tasks, efforts are easily interconnected. Shoprite Checker’s management accounts for every organization’s success and is responsible for the effective and efficient use of labor which in turn increases productivity effectively management in businesses today is irreplaceable. Companies in today’s business world cannot sustain success for a long time without good management. This makes management an important determinant of sustainable success, which proves itself as costly should it ignored. Every successful management team, in today’s world, apply four fundamental and inter-related managerial tasks which comprises of planning, organizing, leading and controlling. Different managers either perform more or less of these tasks in order to achieve the goals of their respective organization. The organizing function further provides an organizational structure that facilitates the effective and cohesive functioning of the organization which provides focus towards achieving quality objectives
3.3 Advanced supply chain
Supply chain involves the medium through which a firm provides its value proposition to its customers. Any organization should have more than one channel to ensure efficiency in the delivery of goods and services. Managers at Shoprite perform more of the planning tasks and review plans and the strategies more often to stay ahead abreast of the competitive and changing environment. Strict procedures are put in place to ensure everyone in the organization adhere to the objectives and strategy of the organization. The controlling function monitors performance and ensures corrective actions are taken. Control systems in essence signals management when things aren’t going as planned and that corrective action need to be taken. Through this function, management can ascertain that the organization’s resources are used as planned and that the organization is meeting its goals. The company reports that Shoprite maintains tight controls of performance of its supply line and employees using highly sophisticated centralized information systems and technology. Meanwhile, management of Shoprite is highly responsible for the design, implementation and monitoring of plans.
3.4 Customer relationship
The way Shoprite relates to their customer is very important. It must select the type of relationship it will have with their customers. In fact, their aim is to ensure good customer relationship to create sustainability and financial success. The firm has public relations practitioners who collect information about the type of relationships an organization has with the environment; and provide the information to the organization. Therefore, public relations practitioners provide the organization with information about the relationships it has with customers, suppliers, trade unions, communities and other stakeholders. The firm monitors the relationships, because there is a lot of developments and changes that occur in the environment which affect the expectations of stakeholders about the organization. Because of these changes in the environment, the relationships can also change over time. Working relations at Shoprite Holdings are characterized by very tight top-down, bureaucratic control which guides the company in its retail environment. Senior managers at Shoprite typically follow a vertical hierarchy approach with highly centralized structure with all decisions made through the head office.
3.5 Key activities
Shoprite’s key activities include design, operation, and control of the transformation process that converts such resources as labor and raw materials into goods and services that are sold to customers’. Managers at the company seem to appreciate the value of effective operation management system. There is no doubt that their success in the retail industry lends itself to effective operations. These managers retain full ownership and control over their operations. Shoprite, for instant, has strong central controls over operations through management process and substantial investment in technologies. According to Miller (2005), head office managers conduct shop floor visit and going through each division to ensure effective transformation process. Managers at Shoprite have established a quality control office which includes electronically controlled and managed supplier management process.
3.6 How to achieve a sustainable competitive advantage against their competitors
The company needs to use these three resources to compete effectively in the market. For instance, they train their employees on hot to deliver better services. In additional, they invest a lot of their resource to the research of the best technology that will boost their service delivery. The business model canvas is a strategy that any organization can use to ensure its success. Shoprite is one of the companies that has benefited through outlining this model in the running of their operations. The firm needs to have a model that emphasizes on the customer since their objective it's to deliver quality services that would enhance god relationship between the company the customer. The company should offer training program for their staff to ensure that they deliver betters services. The only way of ensuring good customer relationship is through satisfying their clients.
4. The resources and capabilities
Resources and capabilities are the assets within an organization used to provide value to its customers. Resources also act as a competitive advantage in the market segment. They can be categorized as financial, physical, human or intellectual. Since the organization’s driving force is its mission statement, this is the best place to begin with the identification of strategic internal factors. The corporate mission is determined by what the organization is and what it does. The mission must be reviewed during the internal analysis. In fact, it is often the mission itself that is the goal of the internal analysis. A good mission statement should be market oriented and realistic, have a long-term orientation and stress corporate values.
4.1 Industry life cycle stage for Shoprite Checkers and all the strategic moves for operating in this life cycle phase
Shoprite Checkers is currently at the growth stage of industry life cycle. The company is multifaceted which therefore requires the management to frequently perceive the growth and development of their enterprise from number of ways namely: the financial growth that link to the development of the enterprise as a commercial entity; strategic growth that relates to the changes that take place in the way in which the organization interacts with its environment as a whole and the profile of opportunities which the enterprise exploits and the assets it acquires to create sustainable competitive advantages; structural growth that relates to the organization’s internal operations ; and the organizational growth that relates to the changes in the organization’s processes, culture and attitudes as it grows and develop. The company is associated with strategic growth, which is a never ending process which monitors and controls the firm and the industry the firm operates in, competitors’ assessment and setting objectives and strategies to meet all existing and potential consumers, and thereafter re-assess all strategies yearly, half-yearly or quarterly (regularly) to determine whether the methods used in implementing the strategies is successful or needs replacement through modification or adopting a new strategy to match with the changing event. Growth in the firm has taken two forms namely internal growth, which comes from within the firm which is a planned, slow increase of the firm’s resources which may include cost leadership, product leadership and differentiation; and the external growth. According to Zajc and Ponikvar (2013), organizations have a broad range of strategic freedom and can choose to either diversify broadly or narrowly, into either related or unrelated industries, through buying other firms, joining forces with another firm to form a joint venture or a merger, forming strategic alliances, or internally starting up a new company.
5. Conclusion
Conclusively, faced with a highly dynamic business environment, increased competition, more demanding student, government policies, and the survival of firms, Shoprite has shown to depend on development of sustainable strategies. It is clear that Shoprite has already developed growth strategies to respond the environment in which they operate in, have identified the factors influencing their growth and seek to attain performance excellence through the adopted strategies. The enterprise main aim is to meet the customer needs hence have emphasized greatly on customer service and the after sale services they offer. To facilitate growth, the enterprises emphasized on personnel competency, networking, customer’s attitude and marketing. Shoprite’s strategy is about the direction, market scope, competitive advantage, resources required, environmental factors, and the stakeholders of an organization. These aspects of strategy form the basis of strategic decisions. It can be concluded that plays organizational culture plays a major role in determining the growth strategies that the firm will employ. Failure to plan, funds misappropriation and lack of an appropriate management team have been cited as some of enterprises business failures, which can be as a result of lack of strategy or poor choice of strategy thereof.
References
Delfitriani, D., 2019. Business Model Design of Cow Milk Dadih Product using Business Model Canvas and Empathy Maps. JURNAL AGROINDUSTRI HALAL, 5(2).
G.K, O., 2015. Effect of Organizational Politics on Organizational Goals and Objectives. International Journal of Academic Research in Economics and Management Sciences, 4(3).
Litwa, P., 2017. Balanced Scorecard using for the measurement the level of the enterprise's innovativeness. Studia i Prace WNEiZ, 48, pp.151-162.
Malheiros, V., Paim, F. and Mendonça, M., 2009. Continuous process improvement at a large software organization. Software Process: Improvement and Practice, 14(2), pp.65-83.
Zajc, K. and Ponikvar, N., 2013. What Drives Firm Growth? Comparing Factors of Intensive and Extensive Firm Growth. SSRN Electronic Journal,.
