MOD001115 Strategic Management: Strategy Development

Patch 1: Strategy Development Processes

Case study– Lego

You are required to provide answer which draws on contemporary strategy theory to identify and discuss the types of strategy development evident at Lego.

Patch 1: Organising for Success

Case study - Ajisne Ramen (China)

You are required to provide answer drawing upon the theory covered in the module to justify and support the key features of success of Ajisen Ramen in China.

Relevant text book chapter: Chapter

Patch 3: Leadership and Strategic Change

Case study – Transformational change at General Electric (GE)

• You are required to provide answer in relation to the theory on ‘types of strategicchange’ and ‘managing strategic change programmes’, identifying what type of strategic change was undertaken by GE?

• In addition, highlight what challenges organisations may face in trying to replicate this approach.

The mission is to inspire as well as develop builders of tomorrow. The ultimate purpose of Lego is to inspire as well as develop children in order to think creatively. This will even help in releasing the potential to shape properly the own future and this will help them in experiencing endless human possibility (Perreault Jr, Cannon and McCarthy 2013).

The vision of the company is inventing the future of play. Lego want to pioneer the different ways of playing as well as play different materials and models of business to play as well. This will include leveraging the globalization as well as digitalization. This will help in realizing the human possibility.

Products and Services

The products and services that are offered by Lego Company is different kind of toys such as NINJAGo, FRIENDS, SUPERHERO along with STARWARS as well. Lego provides different kind of themes for different weeks as this will help them in attracting more customers. The main target group is sorted by different age groups such as 1-5, 4-7, 5-12 as well as 7-16.

The main competitors in block building arena of Lego Company are Mega Bloks, owned by Mattel, Playmobil and K'NEX (Chen, Lin and Kuo 2013). Mattel was the top brand till 2010 and then Lego has taken over Mattel and their revenues have increased that is more than Mattel as well.

Types of strategy development at Lego using contemporary strategy theories

The growth strategy is the kind of strategy development that has been used by Lego Company. Lego Company is entailing introduction of new products as well as services with proper adding more innovative features into it as well. The Lego Company has to properly create innovation to different products that are being offered to the customers and attract them with such kind of services as well.

According to Tiago and Veríssimo (2014), development of market along with strategies related to the development of product together helps in organic kind of growth strategy that will help Lego in building proper specialization on the existing skills, strengths, capabilities as well as competencies. Lego Company needs to properly modify different themes as this will increase the attractiveness to new segments of the toys sold by them.

The market development strategy is adopted by Lego Company that helps in deciding to modify the different products and services with implementation of few changes as this will help in creating more attractiveness among the customers. This has helped Lego in understanding the tastes and preferences of the customers with the proper support of different kind of advertisements as well as new channels of distribution as well (Kumar 2015).

As per Porter’s Five Forces Analysis Model, it can be analyzed that Lego has huge threat from the entry of the new markets as the new toys are continuously entering market with other brands such as Target as well as Wal-Mart. However, Lego being a top brand, it is difficult for the new entrants to make their position in the market as well.

The primary suppliers of Lego are the Chinese subcontractors and hence the level of dependence is low as well. As there are kids who have started spending time on digital products, Lego has helped in defying trends as well as sales are rising to a huge extent as well (Atwal and Williams 2017). Therefore, it can be seen that the threat for substitutes for Lego is comparatively lower in nature; however the threat to the entire industry is high in nature.

Strategic alternatives available for Lego

Figure 1: Strategic Alternatives for Lego

(Source: Kurt and Hulland 2013)

From the above diagram, it can be analyzed that proper strategic alternatives has to be indicated for Lego Company as this will help them in gaining more competitive advantage in the business. Galician (2013) identified different internal as well as external factors that helped in resulting in issues such as there were different products that were weak that has been launched in the year 2004. Proper focus has to be provided on the different competitors as this will help them in innovating more products with the help of product diversification as well as following different other corporate structure that will help in introducing development of market.

Proper focus has to be given on the supply chain as well as cost and the entire process of procurement of Lego was properly reviewed as this helped in reducing the cost as well as it helped them in increasing the revenues as well. Lego can introduce new digital strategy as this can help them in improving the strategic decisions as well. As per Henry Mintzberg Strategy, it is commonly used by Lego in achieving different goals.

Conclusion

Therefore, it can be concluded that proper marketing strategy has been adopted by Lego Company as this will help in achieving goals and this helped in attracting customers in the competitive market as well. there are different other strategic analysis that can be utilized by Lego Company as this will provide them more competitive gain in the entire competitive market. Proper strategic lens has been adopted by Lego Company as this will help them in providing variety of more innovative strategies in the market for the customers in the market as well.

Patch 2- Organizing for Success

Background on the structural change at Ajisen Ramen  

Ajisen Ramen Holdings is situated in Hong Kong and it is one of the largest fast food noodle chain restaurant in China. The respective restaurant operates in three segments that are operation of restaurants, sales and manufacture of Noodles as well as related products. There are more than 420 plus chain of outlets that is mainly found in Far East as well. Ajisen Ramen Holdings is Hong Kong based holder of the brand that is Japanese and the franchise is Chinese.

The first bowl of Ajisen Ramen noodle was first sold in Shenzhen, China in the year 1997. In the year 2007 in the month of March, Ajisen (China) had created a successful listing on stock exchange of Hong Kong that raised $210 million. Ajisen Ramen Holdings has gained huge success and competitive advantage in the competitive market and presently they have built successful brand in China and provided high quality food as well (Abdallah and Alnamri 2015). The respective restaurant also manufactures as well as sells packaged noodles within 7500 points of sale around the entire world.

The business model that has been used by Ajisen Ramen Holdings is the casual dining positioning of the noodles by keeping the taste of noodles consistent in nature. The consistent taste of the noodles that is sold by respective company named Ajisen Ramen Holdings helped them in maintaining the same standard of foods and this provided proper cost advantage as well.

Identification of key features of success of Ajisen Ramen in China using theoretical insights

Ajisen Ramen (China) Holdings is one of the largest food chains that are based in Hong Kong and the chain of the respective restaurant in China as well. The fist bowl of Ajisen Ramen noodle was sold in Shenzhen situated in China in the year 1997. In the year 2007, in the month of March, Ajisen Ramen has proper as well as successful listing in the Hong Kong stock exchange list and the amount of stock increased and rose to $210 million and it was seen that the stock was valued at $1.4 billion in the Hong Kong stock exchange (Lins, Servaes and Tamayo 2017). The proper business model has been adopted by the respective company named Ajisen Ramen Holding was the casual food dining positioning that helped them in gaining proper competitive advantage in the business as well as in the competitive market.

The company tried to maintain proper as well as consistent taste of the different dishes that has been prepared by them. Proper standardization of the product is essential in nature as this helped them in serving the customers properly as well. The key features of success of the respective restaurant have to be analyzed properly as this will help in measuring the success of the organization as well (O’Neill, Sohal and Teng 2016). A proper quantitative element has to be implemented by the respective company as this will help in measuring the success rate that includes growth in the revenues, profitability as well as profit for the profit making organization. The financial success alone cannot guarantee proper admiration from the different competitors in the market as well as popularity with all other stakeholders (Ahmed, Bahamman and Ibrahim 2015).

Proper reputation and image

Proper image as well as reputation is essential in nature for Ajisen Ramen as this is an objective measurement for success. () commented that proper reputation create economic value with proper brand image, embodying the uniqueness of the respective company as well. This is the key component and competitive tool that will help in favoring the benchmarking in order to avoid the critical gaps from the respective company. This is one of the critical factors that resulted in success along with proper implementation of the marketing mix tool that is proper positioning of the food items in their respective company (Elshahat, Freedman and Elshahat 2015). Proper brand image has to be properly created by Ajisen Ramen restaurant as this will help in understanding the different requirements of the company and this will help in gaining proper competitive advantage as well. Reputation and brand image will help in understanding the different issues that has to be properly rectified in order to gain competitive advantage in the competitive market (Minton, Taillard and Williamson 2014). Proper analysis has to be done by Ajisen Ramen restaurant as this will help in analyzing the measures for success.

Proper financial measures

Proper financial status is essential in nature as this helped in evaluating the relative success as well as the progress of the firms. Ajisen Ramen Restaurant helps in analyzing the other competitors in the market as this will help in understanding their position as well in the competitive market. According to Urech et al. (2015), proper analysis of the financial ratios is essential in nature as this will help in understanding the different reasons for increasing their financial stability in the organization. The financial measures play a vital role in achieving the success in the organization as in order to gain proper competitive advantage in the organization, it is essential to analyze the financial position of the company in the entire competitive market as well.

Stakeholder measures

Balance scorecard is one of the theoretical kind of framework that is used by Nawaz, Haniffa and Hudaib (2014), in order to identify the different issues that is faced by the company. Proper analysis has to be conducted by the respective restaurant named Ajisen Ramen as this will help them in analyzing the perceived value for money of the different customers with the help of growth and improvement. This is one of the main measures of success of Ajisen Ramen as this helped them in gaining success and competitive advantage.

Conclusion

Therefore, it can be concluded that proper success is essential in the business as this will provide proper information about the competitors in the market. Proper features have to be ascertained by Ajisen Ramen Restaurant as this will help in understanding the different factors that is responsible for the success of the entire organization. Proper measurement of success is essential in nature as this will help in providing proper situation for the restaurant to succeed in the organization as well.

Patch 3- Leadership and Strategic Change

The report helps in analyzing the different strategic changes as well as leadership change in General Electronics. This report will help in analyzing one of the most far reaching programmes of innovative strategies in the entire history of business. General Electronics Company had proper sound assets that have been properly reflected in the balance sheet as well. However, the company was not technologically advanced in nature and it required more international perspective. This was the entire situation of the respective company named General Electronics in the early 1980s.

The main aim and purpose of the report helps in analyzing the different issues that has been faced by the company. The different processes has been discussed as well that were used by the respective company GE as this helped them in understanding the requirement of changes in the organization. The entire program comprised of different stages such as awakening, envisioning as well as re architecting of the entire organization.

The different approaches to change along with proper relevance have been discussed in the next chapters with the proper usage of relevant theory. The different approaches of the strategic leader has been identified and discussed as well as this helped the entire company in solving such issues in a prompt manner.

Approach to change and its relevance to the context discussed in the case study using relevant theory

General Electronics Company is one of the major companies with sound assets with the proper implementation of different kind of strategies in the organization. The proper innovative strategies has been implemented as this included three stages as well such as awakening, envisioning as well as re architecting (Galliers and Leidner 2014). There was a huge requirement of change in the respective company named General Electronics Company as there different issues that has been diagonised in the organization that included the following:

• The growth in the revenue was slow in nature and the core business of the General Electronic was slow in nature as well
• Due to the slow growth in the revenue, there was slow growth in the core business of the respective company
• There was huge poor productivity that was causing low profit margins as well
• The scope for innovation was limited in nature and this created huge issues in the respective organization (Dinnie 2015)
• The decision making process was slow and it created huge issues in the organization as well
• Lastly, the internal politics was rife in nature for General Electronics Company and this even limited the entire process of the productivity of the entire organization.

Approach adopted by General Electronics Company

Proper approach has to be adopted by the respective company GE as this will help them in analyzing the extent of change that is required to be done by GE as to bring proper innovation in the business that is performed by them. The extent of change can be analyzed with the help of following diagram:

Figure : Types of Change

(Source: Created by author)

From the above diagram, it can be analyzed that there are different kind of changes that is required in the respective organization. Proper innovative strategies have to be properly applied by the respective organization in order to understand the actual requirement for the change in the organization.

Transformation Process

Proper process of transformation has been applied by the respective company as the main task was to identify as well as determine the greatest potential of the managers in the respective organization. The resistance took different forms that are as follows:

• Technical- wherein a proper reliance on the proper existing old systems along with fear of unknown along with distrust in the international expansion (Dinh et al. 2014)
• Political- wherein there is a desire to protect the different power bases that is existing in nature wherein the strategic value of the entire business was declining in nature (House et al. 2013)
• Cultural- wherein there is a unwillingness in order to accept the weaknesses and there is overconfidence from the past successes as well (Rothaermel 2015)

There is different kind of changes that is required in the respective organization wherein the standards of the performance have to be measured by benchmarking the competitors in the competitive market (Lewis, Andriopoulos and Smith 2014). The approach of the respective company GE has to be such that it will help in taking total control of the external corporate kind of communications. Proper training and development is required in the company as this will help in understanding the loopholes and the process of the transformation can be successful in nature as well.

A new vision has been developed by the company as this will help in managing the different changes that were taking place in the organization. There are different elements of the turnaround strategies such as:

• Proper stabilization of the crisis
• Changes in the process of entire management (Klenke 2016)
• Restructuring that will be taking place financially
• Proper clarification of the core products as well as the target markets of GE
• Gaining proper support from the stakeholders (Carter and Greer 2013)

Strategic Change Program

A proper change kaleidoscope is an essential and important tool that will help GE in devising contextual features to change. The proper choices of the design has to be analyzed as this will help in understanding the scope wherein the degree of change can be analyzed along with proper analysis of the time has to be explained as this will help in understanding the diversity that is required to be implemented in the organization. There can be different kind of challenges that can be faced by the respective organization that has to be handled properly by the manager and the strategic leaders of the entire organization.

Conclusion

Therefore, it can be concluded that proper strategic changes has to be implemented by the respective company as this will help in understanding the different requirement for changes in the organization. With the help of the transformational process, the strategic leaders in the organization can bring in different kind of positive changes in the respective organization and this will help in bringing proper diversity in the entire organization in the future as well.

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