Strategic Management Report for Large Corporations

Question: You are required to write a report with reference to at least 15 separate scholarly journal articles and your subject core text. This report will include the following headings: 1) Corporation Identification a. Identify an organisation with product or service portfolios that span multiple business units. i. In your discussion define, with reference to scholarly articles, the term corporation. ii. In your discussion define, with reference to scholarly articles, the terms product portfolio and service portfolio. 2) Corporate Research a. Business Unit Identification. i. Identify the separate business units within the corporation. 1. In your discussion define, with reference to scholarly articles, the term Business Unit. b. Identification of Product and Service Lines. i. Identify the separate product and service lines of the corporation. 1. In your discussion define, with reference to scholarly articles, the terms product lines and service lines. 3) Corporation Revenue Centres a. Identification of Revenue Centres. i. Identify which product and service lines are creating the greatest revenues for the corporation. 1. In your discussion define, with reference to scholarly articles, the term revenue. 4) External Environment Analysis a. Identify the Political, Economic, Social, Technological, Environmental and Legal operating environments for each business unit. i. In your discussion define, with reference to scholarly articles, the terms Political, Economic, Social, Technological, Environmental and Legal. 1. Provide a definition of the term operating environment. 5) Source of Sustainable Competitive Advantage a. Identify the source of sustainable competitive advantage for each business unit. i. In your discussion define, with reference to scholarly articles, the four factors of sustainable competitive advantage. 6) Strategic Direction a. Make recommendations for the future strategic direction for the organisation. i. In your discussion define, with reference to scholarly articles, the term strategic direction Answer: Introduction: Large corporations like PG, Intel and Nokia etc. are basically divided into diverse strategic business units, with the aim of managing their operational activities in an efficient manner. In this unit, we have discussed the global business units, product lines and revenue centres of Procter and Gamble. Apart from it, this unit will also help the learners in identifying the several sources of competitive advantage utilized by PG and several environmental factors affecting the working of the firm. Lastly, learners will be able to learn the strategic direction techniques with the help of this unit. Corporation Identification: The Corporation is the referred as Any firm or the group of firms, which possess the separate legal entity by law, from its owners or the shareholders (Walter, 2015). Corporations basically run on the basis of going concern concept and the limited liability concept. Corporations are managed by the board of directors elected by the shareholders of the firm. Procter and Gamble, Nestle, IKEA, Intel are some of the largest corporations in the world. Let us check out the product portfolios of Procter and Gamble (PG), a leading firm of America. The product portfolio comprises of the wide range of products sold by the company (Kendra, 2008). BCG matrix is utilized by the firms to identify the growth rate and market share of each product sold by the firm. PG portfolio comprises of diverse brand products such as Olay, Tide, Ariel, Pampers, head shoulders etc. PG classifies its product portfolio considering the BCG matrix with the aim of efficiently utilizing its resources. It is also continuously making efforts to diversify its products, for up surging the overall revenues of the firm. For example, among its 254 brands, PG is concentrating more on 65 brands, which is able to generate higher revenues for the firm. Service Portfolio denotes the varieties of services are offered to the customer (Quinonez, 2014). PG service portfolio consists of all essential elements which are needed for every person like hair washing, showering Shaving cream, house cleaning, dishwashing and so on. Corporate research: Global organizations are required to maintain the separate business unit, for managing their product and service lines efficiently. A separate business unit is referred as A section or department, where the operational activities of the corporation are carried out independently (Walter, 2015). It is also referred as the strategic business units. It is controlled and managed by the managers, who are liable to report the headquarters of the firm. These strategic business units are incentive oriented and so managers give their best to upsurge the profitability of these units. Apart from it, as decision-making powers are retained by the managers and so all the important decisions are taken and implemented easily. PG do maintain diverse strategic business units in different countries. PG is divided into separate business units on the basis of its different product lines. The Product lines are referred as the The products, which are either similar in function or price sold under the same brand or company (Quinonez, 2014). For example, Olay manufactures diverse types of beauty creams such as Olay light cream, Olay anti-aging cream, Olay light cream etc. are sold under the same brand and so all such products are considered its product lines. Diverse brands such as Ariel, Olay, pampers, Gillette etc. of PG have their own strategic business units, which are managed independently by the diverse brand managers. Service lines are like a grouping of all the products and services which is related to one particular segment of the organisation (Neumeier, 2016). It is an approach of organised management. As PG has no service lines whereas Deloittes service lines in Australia are Assurance and advisory, con sulting and Finacial advisory and so on. Corporation revenue centres: Revenue is referred as the income generated from the sales of goods and services (Westermann, 2015). Gross revenue is calculated by subtracting the trading expenses from the sales revenue. While net revenue is derived by subtracting the operating expenses from the gross revenue. Revenues are calculated to identifying the overall profitability of the firm. Large corporations do manage their diverse revenue centres, with the aim of increasing the overall revenues of the firm. Basically, sales and marketing departments form the revenue centres of the firm, which carries out diverse promotional activities for up surging the profitability of the firm. PG have maintained diverse revenue centres, which are continuously making efforts to promote its brands globally. Revenue centres of PG are responsible for deciding the price of diverse product lines of the brands considering profit margin of the company. The main aim of PG revenue centres is to up surge the overall revenues of the firm. Revenue centre teams do identify the loopholes in the marketing strategies and take essential steps to revise such strategies. PG have revised its marketing strategies considering trends and have made use of innovative marketing strategies such as social media marketing, online selling, SEO marketing, e-commerce website etc., with the aim of generating more revenues for the firm. This type of revenue centres also maintains relationships with the consumers by effective communication through diverse means such as email, SMS, calls etc. External Environment analysis: PG is a leading multinational company, which have its global business units in diverse countries. Operating Environment denotes the place where the business is running (Tambovceva, 2016). The global business units of PG are located in diverse countries like India, China, North Korea, Russia, France and others. And so it is essential for the firm to consider Social, Economic, and Technological, environmental, political and legal factors of different countries, which affect the working of the firm. The social environment is also referred as social heritage and it comprises of social culture and values followed the society at large (Neumeier, 2016). PG deals in diverse countries and so social culture and values of these countries are taken into consideration before developing its strategies. For example, PG offers discounts in India during Indian festivals. The political and legal environment includes the diverse policies imposed by the government of diverse countries such as taxation p olicy, import policy, pricing policy, trade policy etc. PG consider the political factors of the diverse countries and accordingly it decides the prices of its products. That is the reason the prices of PG products are different in different countries. Technological environment is comprised of the new innovations or technologies, which upsurge the value of the products (Tambovceva, 2016). Technologies or innovations help to simplify the manufacturing process and to improve the quality of the products. PG have always welcomed innovations and new technologies, with the aim of up surging the value of its products. It has also diversified its products and manufacturing processes by making use of latest technologies. The Economic environment comprises of diverse economic factors such as income, growth rate, inflation rate, employment rate, interest rates etc., which directly or indirectly affects the purchasing powers of the consumers (Danny,2012). PG considers the above factors before deciding profit margin and price of its products. For example, PG sells its products with lower profit margins in developing countries like china and India compared to other developed countries. Above all, PG do consider the geographical and psychological factors before developing its strategies for its global business units (Armstrong,2012.) Source of sustainable Competitive advantage: Four important sources such as up surging the Brand loyalty among the consumers, adding unique value to its products and services, increasing the creditability of the firm and enduring innovations are considered by PG for achieving the sustainable competitive advantage. (Lorenze,2006). PG is continuously making efforts for building the brand loyalty among its consumers by carrying out diverse promotional activities through innovative means such as social media marketing, e-commerce website, SEO marketing etc. PG have also diversified its products considering the consumer need and preferences. Apart from it, it deals in products with high quality, which differentiated it from the other brand products and thereby it is able to achieve the competitive advantage( Ellis, 2007). PG do contribute to the society by charities and several social functions, which has upsurged the creditability of the firm. Apart from it, it is continuously making a huge investment in the promotional activities, in order to promote all its brands globally. Day by day new technologies and innovations are used by PG to add unique value to its products. It has changed its manufacturing processes in order to add unique value to its products. Innovations and new technologies have also helped the firm in reducing the overall cost of the products by making efficient use of resources (Jeffs, 2008). Thus PG is able to achieve the sustainable competitive advantage by focusing on the above four sources of competitive advantage. Strategic direction: Large business organizations like PG develop diverse strategies for measuring and improving the overall performance of the firm. The strategy is basically termed as the master plan of the firm. It is essential for the managers to direct and control the activities of the firm, in order to achieve its desired objectives. Strategic direction is referred as The multiple actions taken by the directors of the firm to achieve the goals of its predetermined strategies or targets (Olsen,2012).Basically, strategic direction is set by the board of directors of the company and the executive directors are responsible for the efficient implementation of the strategy. Executive directors need to possess leadership skills, with the aim of improving the performance of its subordinate and thereby achieving the desired targets. Though PG is able to achieve the higher growth rate through its diverse strategies, it should take into account following recommendations for improving the overall performance of the firm. PG should focus on the higher growth markets product brands such as loreal, Wella, tide etc. to up surge its revenues. Apart from it, it should promote its e-commerce website through diverse means to increase the profitability of the firm (Alexander Mugan, 2015). Conclusion: Thus we can say that learners of this unit will be benefitted as all the topics in this unit is briefly discussed in this unit. Here learners will be able to know, how environmental analysis is carried in the large business units such as PG. Lastly, the recommendations given in the strategic direction section will aid the learners to identify the diverse ways to upsurge the overall performance of the firm. References: Albright, Kendra ( 2008). "Environmental Scanning: Radar For Success".Information Management Journal. Alexander Mugan (, 2015)."2015 Careers in Africa Employer of Choice Awards".careersinafrica.com. Armstrong, Gary (2012).Principles Of Marketing. N.S.W: Pearson Australia. Competitive horizons. (2016). Strategic Direction, 32(3). Ellis, P. D.. (2007), Distance, Dependence and Diversity of Markets: Effects on Market Orientation,Journal of International Business Studies, 38 (3), 37486. Erica, O. 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