NMIMS Global Access

School for Continuing Education (NGA-SCE)

Course: Strategic Management
Internal Assignment Applicable for June 2019 Examination

1. The CEO appoints you as a consultant to analyze the external environment for
the Ximi Brand. Analyze. (10 Marks)

The external environment can be classified into two categories: the macro-
environment and the micro environment. The micro environment is those factors that
directly influence the organisation performance. They include customers, suppliers,
intermediaries, competitors and the public. On the other hand, the macro
environments are those factors that affect Woolworths from outside. They
include: economic, social, technological, legal and demographic factors. Therefore,
Porter five forces and the PESTEL analytical tools can be applied in the assessment of
how macro and micro surrounding.

The Porter Five Forces

This tool examines the current situation and performance of a company. The areas
that are assessed include the following.

 Bargaining power of buyers: In the retail trade, consumers have a wider

variety of products and services to select. It is due to the availability of
supermarkets and retail stores that provide necessity products to customers
giving buyers high bargaining powers. With the entrance of new players in
the market that has consequently spurred stiff competition hence giving more
powers to buyers.

 Bargaining power of suppliers: The retail trade being competitive, a

significant number of the market share is taken by the majority. Therefore,
suppliers have high bargaining power in the industry. Ximi will adopt an
efficient supply chain management to achieve their goal of customer
satisfaction.

 Threats of new entry: New firms which want to enter into the retail industry
find it difficult because larger companies have already dominated the market.
Hence, threats to new entry are considered to be lower to a company like
Ximi.

 Rivalry among existing firms: The Ximi may face the competition from its
rival companies as result of which the profitability may reduced because some
of the customers that used to purchase products from Ximi have now preferred
shopping from competitors stores.
 The threat of substitute: These are products that can serve an alternative
purpose as the existing one. The substitute products are always available. To
thwart this, Ximi may have to embrace diversification and try to offer
consumers an opportunity to choose from the variety of products offered. Ximi
should apply the differentiation strategy to win consumers. These strategies
will consequently result to increased sales hence profit maximization.

Therefore, Ximi should the understand these five forces and formulate viable
strategies to enhance quality, provide what customers’ needs, employ
sophisticated marketing strategy, control suppliers to be a cost leader and
above all, it should totally incorporate technology in its processes. As a result,
it will manage the competition and expand further.

Legal-Political Factors
This is a non-market factor but it can still greatly impact a business. The
political-legal environment is a combination of a lot of factors such as the
current political party in power, the degree of politicization of trade and
industry, the efficiency of the current government, government policies,
current legal framework, public attitude towards the economy etc.
All these factors will shape the political-legal environment in which the firm
has to operate and compete.
Apparently, it is imperative that all business organizations have no otherwise
but to abide by legal provisions of the land fully. Ximi has to understand the
consequences of contravening the legal requirements and even employ law
experts to advice when the management is uncertain of a particular matter.

Technological Factors
The technological breakthrough that is currently experienced has significantly
affected how most businesses conduct their operations. Today, technological
harnessing and innovations is a common trend that organizations are applying
to sharpen their competitive edge. The company has employed the technology
in most of its operations. The Company has to use the self-check-out machine
to scan, weigh and make payments to reduce the costs

Economic Factors

These factors primarily deal with the performance of the country’s economic
performance. It can be regarding the consumers’ purchasing powers, the
exchange rates, inflation, among others. If the customers’ purchasing powers
are too weak, the performance of the company is negatively affected. Also, the
existence of inflation tends to raise the price of various products hence
affecting the users buying behavior.

Social Factors

These factors include the demographic patterns and individual beliefs, norms,
 attributes and so on. It particularly covers people religion, language, gender,
sex, age, population size, norms, etc. The demographic aspects keep changing.
Consumers vary their demands according to technological changes, implying
that they prefer consuming current products. Also, they consider purchasing
products from organization leading in corporate social responsibility practices.

Conclusion

Porters Five Forces apparently reveals that dynamic business environment has
been a challenge. The growth and expansion focus have enabled it to enact
strategic plans that align with both short and long term objectives.
Furthermore, the unfavorable environmental metrics has also been a great
challenge to the company that has affected the profitability level. Though the
company still anticipates for more profits but the fact remains some of its
customers have opted for cheap competitors’ products. The strong
commitments towards ensuring that the customers are provided with the right
products and creation of a healthy working environment to for the employees
are part of the factors that may contribute to the company success.

2. Discuss the various types of business models and suggest the one that should be
implemented by M/s Ximi for their product launch in India. Explain the same
with reason. (10 Marks)

A business model defines how the enterprise delivers value to customers, gets them to
pay for that value, and converts those payments to profit.

There are four basic types of business model that any for-profit business will fall
into:

1. Manufacturer: A manufacturer takes raw materials and creates a product, or

assembles pre-made components into a product (E.g car manufacturers). A
manufacturer may sell its products directly to its customers, or it can outsource
sales to another company.

2. Distributor: A distributor is any business that purchases products directly from a

manufacturer for resale either to retail outlets, or directly to the public. For
example, a car dealership would purchase vehicles directly from the manufacturer
and sell them to the general public.

3. Retailer: A retailer purchases product from a distributor or wholesaler, and then

sells those products to the public. A retailer usually has a physical location, but
may also be an online retailer such as Amazon or Kalahari.

4. Franchise: A franchise can be a manufacturer, distributor or retailer, depending

on what type of franchise you purchase. Here the franchisee adopts the business
model of that franchise.

Under these four types of business, there are various other ways of structuring
your business model.
 A company that integrates a physical and an online presence. An example
 would be a retailer who allows customers to order products online, but lets
them pick up their order at their nearest store.
 A company that deals with customers directly via the internet without
engaging an intermediary.
 Direct selling to consumers making use of product demonstrations in the
person’s home, for example. There are several cosmetic and jewellery
companies that use this model in SA.
 The Freemium business model works by offering a basic Web service or
product, for free, while charging a premium for advanced or special
features. The model offers a basic service to consumers for free such as
30-day free trial while charging for premium services for instance add-ons
or advanced services to paying members. This way, customers can be
more comfortable with accessing your service for free and decide before
making a purchase. It is a great way to build relationships with customers
and as a way to establish the foundation for future transactions.

One of the greatest advantages to a freemium strategy lies in its ability to

be a marketing tool for your service, which helps early stage startups scale
by attracting a user base without costly ad campaigns.

 Online auctions, which are held over the internet.

The best business model these days is own a franchise of a good organization,
any good franchise company has developed a method of doing business that
works well and produces successful results. Even better, they're required to
provide you with a great deal of information in their required disclosures so
you can investigate and verify the results with existing franchisees prior to
making your final decision. One of the biggest advantages of franchising is
that the company is building a brand on a regional or national basis that should
have value in the eyes of customers you're trying to attract. A good franchise
company has training programs designed to bring you up to speed on the most
successful methods to run the business. They should also have reference
materials to assist you in dealing with whatever comes up while you're
running your business.

Franchise companies have staff dedicated to providing on-going assistance to

franchisees. You're not alone when you're building and running your business,
and you can always call on experienced people when you hit a rough spot or
want to share new ideas for growing the business. The franchise company has
marketing assistance to provide you with proven tools and strategies for
attracting and retaining customers. Usually, the staffs help you develop the
actual marketing plans and budgets for your grand opening as well as your on-
going efforts to market your business effectively.

Franchise are best in light of the fact that a franchisor offers an item or
administration that has sold effectively. An autonomous business depends on
both an untried thought and operation. Three components will enable you to
anticipate the potential achievement of an establishment. The first is the
quantity of establishments that are in operation. The second indicator is to
 what extent the franchisor and its franchisees have been in operation. A third
factor is the quantity of establishments that have fizzled, including those
purchased back by the franchisor. Also, it is best on the grounds that most
business specialists concur that an establishment operation has a lower danger
of disappointment than a free business. The insights on this change contingent
upon the meaning of disappointment. Whatever measurements are utilized,
they reliably propose that an establishment will probably prevail than are
autonomous organizations. The Franchisor can furnish you with a
demonstrated plan of action - one that has worked for others.

Franchise business is on fire these days, my ideas for best franchise as looking
forward to this period of time is the company, who is achieving success day by
day because of their working ethics and responsibility of fulfilling their
customers’ needs at time.

3. a. Explain various functional strategies that M/s Ximi can adopt to improve and
maximize the resource productivity. (5 Marks)

Functional strategies describe the means or methods to be used by each functional

area of the organization in carrying out the corporate-level or business unit strategy.
The functional areas of organizations normally include: product/ operations,
marketing, finance, human resources, research and development, and information
systems management.

 Production/operations management (POM) is the basic function in the

business firm. This function of a business consists of all those activities
that transform inputs into goods and services. POM must guide decisions
regarding: the technical core, quality, capacity, facilities, technology and
production planning and control. The need for consistency among these six
decisions is highlighted.
 Marketing can be described as the process of defining, anticipating,
creating, and fulfilling customers' needs and wants for products and
services. The major decisions in marketing strategy concern the
product/service, price, place/distribution, and promotion/advertising. The
key is to strive for consistency among these elements.
 Financial management is primarily concerned with two functions:
(1) Acquiring funds to meet the organization's current and future needs;
(2) Recording, monitoring, and controlling the financial results of an
organization's operations.
Therefore, the major decisions in financial strategy concern objectives,
profitability, liquidity and cash management, leverage and capital
management, asset management, investment ratios, and financial planning
and control.
 Human resource strategies concern human resource planning,
recruitment and selection, training and development, compensation and
rewards, employment security, and labor relations. Functional strategies in
human resource management should guide the effective utilization of
human resources to achieve both the objectives of the firm and the
satisfaction and development of employees.
 Research and development (R&D) has two basic components:
 product/service R&D and process R&D. Research and development
strategy concerns the relationship of R&D to business strategy. Business
units competing with the niche-low-cost and low-cost strategies emphasize
process R&D to reduce their operations costs; those the use niche-
differentiation or differentiation place greater importance on
product/service R&D; and adopters for niche-low-cost-differentiation,
low-cost-differentiation, and multiple strategies simultaneously both types
of R&D. With the increasing of technological change R&D has assumed a
key functional role in many organizations.

 An information system which provides accurate, timely, and relevant

information for use in the strategic decision process is an important
organizational resource

Overall strategic success requires that all functional activities be tightly integrated so
that their operation meshes smoothly with one another. In this term, functional
strategies are importance tool for effective implementation of a business strategy.

3. b. Explain any five CSR activities that the company should undertake in India to
benefit its stakeholders. (5 Marks)

The 5 CSR activities that the company should undertake in India to benefit its
stakeholders are:

1. Cause Promotion leverages corporate funds, in-kind contributions, or other

resources to increase awareness and concern about a social cause or to support
fundraising, participation, or volunteer recruitment for a cause. Well-conceived
and executed cause promotions can improve attitudes toward a company; generate
consumer traffic, sales and increased loyalty; and motivate employees and trade
partners.

2. Cause-Related Marketing links monetary or in-kind donations to product sales or

other consumer action. What most distinguishes cause-related marketing is the
way it links a corporation’s level of giving to consumer action. Because of that
linkage, cause-related marketing initiatives often require more detailed
agreements and a higher level of coordination with nonprofit partners involving
important activities such as establishing specific promotional offers, developing
co-branded advertisements, abiding by state regulations and industry guidelines,
and tracking consumer purchases and activities.

3. Corporate Social Marketing uses business resources to develop and/or

implement a behavior change campaign intended to improve public health, safety,
the environment, or community well-being. Behavior change is always the focus
and the intended outcome.

4. Socially Responsible Business Practices are discretionary business practices that

a corporation adopts and conducts to support social causes, to improve community
well-being, and/or to protect the environment. Key distinctions include a focus on
activities that are discretionary, not those mandated by laws or regulatory
agencies.
5. Employee Engagement activities support and encourage employees to engage
with nonprofit organizations and causes. These efforts may include employees
volunteering their expertise, talents, ideas and/or physical labor. Corporate support
may involve providing paid time off from work, matching services to help
employees find volunteer opportunities of interest, recognition for service, and
organizing teams to support specific causes the corporation has targeted. Done
right, these efforts fully integrate into existing corporate social initiatives and
connect the employee activities to business goals.