Strategic Analysis of Firm X

The study was developed to carry out a cogent analysis of the concept of strategic leadership and strategic thinking; it provided a prominent review of how strategies are designed and implemented with a detailed analysis of the relationship between strategy, innovation, and change. The study also vividly analyzed the selected strategic process of a specific organization know as Deutsche hospitality in a bid to understand the driving force behind the adoption and implementation of the company’s a strategy. Based on the importance of the human elements required for the strategic development of most organizations, the study also pointed out the extent to which people in the case organization (Deutsche hospitality) are involved with and contribute to the selected strategy. Having completed the above-mentioned processes, the study also pointed out recommendations for how strategic process within the selected organization can be improved.

Introduction

Strategic management is an essential function of management in every organization since it gives the firm a blueprint of the process that should be followed in the realization of organizational objectives. This study involves a precise analysis of Firm X’s strategic plan. Firm X is a multinational hospitality organization which was founded in 1930. The company owned one hundred and sixteen hotels across the globe in 2017. The company went through a cultural change strategy as a way of improving its services.

This study will, therefore, focus on the enacted cultural change as a strategic success factor. The outline involves a literature review of strategic management theories; a comparison of strategy, innovation and change in organizations; a critical analysis on the strategy enacted by Firm X; an evaluation of the degree to which Firm X’s employees contribute to the implementation phase; and recommendations on how Firm X’s strategy can be improved.

Literature Review

Key Theories of How Strategy is Developed and Implemented

Henry Mintzberg's Theory

Most scholars refer to Henry Mintzberg as a senior management iconoclast. This is because he was confident enough to critically examine the previous sacred concepts in strategic management and other forms of business management, (Freeman 2010), p.22). He is a greatly recognized for its unique work on the differentiation and identification of the gaps that exist between reality and strategic concepts.

Michael Porter’s Theory

This is a modern-day strategist whose main focus has been on governmental and organizational competence as well as competitiveness. His works are compiled in business strategy books, whereby he also came up with commonly used tools of strategy analysis, for instance, the ‘five forces’ tools, (Bryson et al. 2009, p.180).

Igor Ansoff’s Theory

Igor Ansoff is another strategist whose main contribution is in the development of practice and thinking on business strategy. Most scholars refer to him as one of the pioneers of strategic planning based on his signification role in the ‘planning school of thinkers’ team, (Clarke and Fuller 2010, p.172). He insisted on paying attention to the external concerns of the organizations, rather than internals, for instance, matching products to different types of markets by market needs, (Salmea and Spil 2002, p. 446).

The Relationship between Strategy, Innovation, and Change

According to Rosabeth (2011, p. 27), the reason why forms embrace innovation is simple: change is occurring at a progressively increasing rate, and firms are not certain of what the future holds. This means that organizations must innovate as a way of preparing for change, and for them to make a change, they must follow formulated strategies. With the current technological developments and globalization, the pace at which change is taking place is accelerating, (G Steptoe-Warren et al. 2011, p. 230).If the business world doesn’t change, then organizations would keep doing what they have always done, and there would be no need for innovation. This means a situation whereby customer needs are accurately predictable, competitors do not provide new goods and services, stable markets, and the technology is constant, (RB 2007, p. 16). However, all the above-mentioned factors keep changing, hence the need for innovation. According to Paul et al. (2013, p. 133), innovation means coming up with new products, processes, services, among others. For the organizations to embrace innovation in a manner that translates into the realization of their objectives, they must plan new methods of enacting the changes that are brought about by innovation. This is the function that strategic management performs. Strategy, innovation, and change are therefore interrelated functions that determine the well-being and sustainability of organizations, (Jonathan and Jay 2011, p. 166).

Strategic Analysis and Implementation

Strategic analysis refers to the process of coming up with a strategy for an organization through researching the organization about the environment in which it operates, (RS and DP 2010, p. 124). Strategic analysis enables the organization to come up with and follow the path that involves the least resistance in achieving its goals. It is in most cases applied when there is need to make a change in the firm. The following tools are used in strategic analysis: PEST, Michael Porter’s five forces model and SWOT analysis,

SWOT analysis

SWOT analysis is a strategic analysis tool that is used by organizations in the evaluation of their strengths, weaknesses, opportunities, and threats. It helps to identify the suitability of a project or a process through an evaluation of the firm’s external environment and internal. The opportunities and threats make up the external environmental factors while weaknesses and strengths are part of the internal environment. (RB Mason 2007, p.56)

PEST

PEST analysis helps in the evaluation of political, economic, social and technological factors that are likely to affect the organization during the implementation of its strategies. The factors represent the macro-environment components which need to be scanned by the management. Political factors refer to the degree of government’s influence on businesses. Economic factors refer to interest rates, exchange rates, economic growth rates and inflation rates. Social factors include health aspects, career attitudes, population growth as well as an emphasis on safety. Technological factors refer to environmental and ecological aspects, for instance, the rate of technology change and technology incentives.

Michael Porter’s five forces model

Michael Porter had a significant influence on the strategic management function in organizations. He came up with the five forces model which has been successfully applied strategic management. The model includes the threat posed by the entry of new competitors into the industry, the presence of substitute products, the customers’ bargaining power, the strength of competitors, and the suppliers’ bargaining power.

Strategy implementation, on the other hand, refers to the process in which the formulated strategies are put into action, (Noland and Phillips 2010, p. 34). Strategy implementation is the fourth phase of the strategic planning process, after the formulation of strategy, strategy analysis, and strategic choice. It is a critical phase for the determination of the success of a strategy since if a mismatch occurs between formulation and implementation the strategy does not succeed. For organizational success to take place, the strategies must, therefore, be disintegrated into workable daily activities that will be performed by all the stakeholders. Strategy implementation is all about integrating the strategy with the firm’s culture so that it becomes part of the firms’ way of life, values, and beliefs.

It is, therefore, a critical activity which requires operationalization since organizations operate in a changing environment. Strategy evaluation is constantly performed to ensure that the implementation phase realizes the intended results. In cases where the implementation is not yielding the forecasted results, a contingency plan is adopted which should have been part of the formulation phase. This raises the need for organizational support from the top level management as well as teamwork among the workers.

Strategic Leadership

Strategic leadership is the ability of organizational leaders to influence their subordinates to voluntarily make decisions in a way that enhances the overall good of the organization, at the same time maintaining financial stability, (Vera and Crossan 2004, p.223). Scholars have consistently confirmed that the leadership styles adopted by leaders can either negatively or positively impact the organization’s vision and growth. For an organization to efficiently deal with the prevailing changes in its environment, its leaders must possess the tools and the skills required for strategy formulation, implementation, and evaluation. Managing change requires executives who can not only give the firm a sense of direction but can also influence the work groups through building ownership and alignment, (Finkelstein et al. 2009.p.67)

Strategic leadership also entails the ability of the executive to lead organizational focus towards the right purpose as well as choosing the best and critical business practices that help the firm to remain relevant and competitive in the industry, (Boal and Hooijberg 2000, p. 517). Organizational sustainability dramatically relies on its ability to learn and adapt. If an organization fails to adapt to the changing technology, economic factors, political factors, climate change, among other factors, then it becomes obsolete.

Strategic leaders are always ready with ideas on how to marshal the resources and deliver quality products and services, (Fikelstein et al. 2009, p.66). Their role is to strike a balance between the human dimension of strategic thinking and a focused analytical perspective. They also involve all the stakeholders in strategy dialogues as a way of building the foundation for teamwork in at levels of the organization. By so doing, they build a workforce that can adapt, define and adjust, commit their strategies at the required pace, (Elenkov et al. 2005, 668).

As mentioned earlier, strategic leaders can combine the aspects of human dimensions as well as the analytical dimensions in the quest for organizational growth. However, the manner in which this practice translates into physical influence in the organization varies depending on the leaders’ ability to: define their leading roles as the chief strategist, identify their ongoing role during strategy formulation. To determine the kind of a team that they should build and finally, their ability to recognize when the strategy making process is over, (Jansen et al. 2009, p.17). It is therefore essential for executives to possess the skills as mentioned above since they help them in eliminating bias in the performance of their roles in the strategic management post.

Strategic Logical and Creative Thinking Frameworks

Strategic thinking framework

The term strategic thinking has gained popularity in literature over the past two decades, whereby it is mostly used generically. Two approaches are used to define strategic thinking: strategic thinking as the act of thinking about organization’s strategies while the other one views strategic thinking as an activity that can be separated from strategic planning, (Kapferer 2012, p.40).

According to the first view, the nature and the results of strategic thinking are dependent on the nature of the strategy. A study that was aimed at determining the Western and the Japanese ways of viewing strategic thinking was conducted by a scholar who was known as Raimond in 1996, (Schoemaker 2005, p.25). The western population was found out to possess the characteristic of being analytical rigorous and quantitative. On the other hand, the Japanese population exhibited the characteristic of being imaginative, creative and having great concern for emotions, values, and energy. Scholars who support this first view define strategic thinking as thinking strategically. Strategic thinking is therefore applicable when one is thinking about strategies, which means that strategic thinking does not exist in the absence of strategies. According to the second approach, strategic thinking and strategic management can be used interchangeably. A scholar who is in support of the second view approaches strategic thinking as an overall concept. They view it as a system of propositions on the strategic action.

With the development of more clarity on the limitations of formal planning, the third definition of strategic thinking has evolved. This definition is more concrete since it seeks to define the roles of strategic managers and their functions during the strategic planning process. Strategic thinking is therefore defined as the process which reinstates thinking about strategic issues as the primary objective of planning discussions.

Michael Porter used the term ‘strategic thinking’ in one of his articles, The Economist, to mean the act of thinking about strategic issues, (Crawford and Iriberri 2007, p. 1773). However, he explained that the scope of planning extends to means all the activities that are put in place by organizations to foster competitive analysis as well as avoiding falling into the trap of routines.

Finally, the most commonly used approach to strategic thinking encompasses the nature of the process. The prevalent associated with this approach is attributed to the fact that it attempts to find out the relationship between strategic thinking and strategic planning. Graetz (2002, p. 462) claims that strategic thinking comes before strategic planning. It is, therefore, a way in which executives look into the future of the firm, basing their thoughts on qualitative variables, rather than quantitative variables, (Bonn 2001, p.68).

Logical thinking framework

Logic thinking is based on the foundation of rules, proofs, and syntax. In organizational management, a logical framework is applied in the presentation of logic as a signature in a superior order, in a manner that preference is made to the concept that has the highest probability of positivity. The first logical framework to be applied in strategic management was Automath after which other frameworks such as Isabelle have been applied, (Stamovlasis et al. 2010, p.179).

Dependently typed lambda calculus is used as the basis of a logical framework. Logical thinking occurs whenever there is the presence of an appropriate metalanguage, characterization of the mechanism which are represented as logic objects and characterization of the class of objects that are being represented. For instance, the framework can be logically represented as “framework = language + representation,” (Husserl 2012, p.88).

Creative thinking framework

Creative thinking is depicted in the ability of strategists to generate and apply new ideas in specific business contexts, (Davis 2004, p.22). This is done through viewing situations in alternative ways and making links between the alternative conditions to generate positive outcomes. Four creative thinking tools are used in strategic management: new business ideas, reframing ideas in five different ways, brainstorming and idea expansion sheet.

Learning Organizations

The concept of a learning organization was coined form the works of Peter Senge. It means an organization that constantly transforms itself and ensures the continuous learning of its members, (Bass 2000, p.28). The learning organization developed as a result of the constantly changing environment as a way of enabling organizations to be competitive. A learning organization can be described by the following: shared vision, team building, systems thinking, personal mastery and mental models.

Firms do not radically transform into learning organizations, some factors are responsible for the transformation. As firms expand and grow, they lose the capacity to learn, since the structure becomes more complex, (Morgan 2013, p. 33). The short-term option is the frequently proposed solutions since the same problems tend to reoccur in future. For the firms to remain competitive, most of them have restructured and reduced the number of workforces. This calls for the effective production of the few people who remain in the organization. For such firms to earn a competitive advantage, they are much active compared to competitors. This means that the firms must maintain current knowledge of new processes and new products, understand the external environment and come up with creative solutions to problems. This calls for co-operation between the employees, a culture of trust and effective communication, (Bartsch et al. 2013, p.240).

The main benefits of a learning organization include: possessing the knowledge on better methods of linking the customer needs, improvement of the quality of output, an increased pace of change and innovation in the firm, a healthy corporate image, and improved efficiency, (Karkoulian et al. 2013, p.516). However, it is worth noting that there are barriers that slow down, retrogress or inhibit the process of learning. These include: the intangible nature of personal mastery makes it hard for organizations to embrace it, insufficient buy-in at the individual level increases resistance, and large organizational size slows down the learning process, (Dar-El 2013, p. 15).

A Critical Analysis of Selected Strategic Processes within Firm X

Positioning Strategy

Positioning strategy refers to a situation whereby the organization is concerned with the impact of its external environment on its strategic capability, (Ibrahim and Gill 2005, p. 181). Most scholars claim that positioning strategy is as a result of market segmentation and market structure. However, some of them also argue that it originated from merchandise, product, a company, service or an institution. According to Firm X’s executive, positioning strategy is a central element of the hospitality business. It includes both tangible and intangible elements, for instance, organization’s image. It also includes the activities done before and after sales and services are made.

The firm has modified both tangible and intangible elements of strategic management about competition. For instance, the company’s strategic plan involves the development of an open, appreciative and leadership culture that allows all the employees to participate fully in its realization. This led to the need of coming up with methods in which the efficiency of cultural change can be evaluated.

According to Warkentin et al. (2000, p. 98), positioning strategy can start from any party among the stakeholders. It can, therefore, start with the company, customers or competitors. The definition given above shows that companies can use positioning strategy to earn a competitive advantage. For instance, Firm X included the need for the staff to render services that the customers did not expect initially. It was clear that hotel business is people’s business and both the employees and the customers should enjoy the business. The attendants were therefore supposed to effectively communicate with the guests as a way of showing empathy, professionalism, and friendliness. This was something that was expected to be visible in all the hotel operations, starting from the head office.

Duo et al. (2010, p. 169) defined positioning strategy as a means of earning a competitive strategy. Competitive advantage refers to the act of a company doing things better than its competitors, hence being able to produce good quality under low costs, at the same time enjoying repeated sales, (Chun and Davies 2001, p.353). The key towards earning a competitive advantage at Firm X is through adopting a culture that is referred to as “hoteliers with passion.” The passion is aimed at fostering leadership culture and motivating the employees across all the hotel brands. The executive made it clear that the board and the human resource department understand their success factors, which are their employees. They, therefore, committed to developing each person’s potential across all the hotels as a way of developing the hotel chains through shared values.

Globalization Strategies

Globalization refers to the process by which companies, governments, and people interact internationally, a process that is driven by technology, international trade, and investments. Globalization strategies are meant to foster the interchange of world views, ideas, products, services, and culture, (Gleason and Wiggenhorn 2007, p. 357). One of the methods that Firm X have used to embrace globalization is through the adoption of modern technology in hotel bookings, advertisements, and services. It is evident that with the current advancements in information technology as well as transport, globalization is taking place at a progressively increasing pace.

According to Appelbaum and Robinson (2005, p.54), globalization strategy is the development of an organization’s guide towards globalization. It involves considering and assessing all the organizational aspects, that its, its customers, suppliers, production site and competition, against both domestic and international standards. It is evident that Firm X is committed to meeting international standards of quality services since one of its strategic objectives was to conduct modularly designed training and development for its employees. This would translate into higher quality services and products in its respective hotels. By so doing, the company would be able to meet both local and international standards and hence attract more customers.

Globalization has been favored by the current development in the information technology, which has led to cheap and fast communication across the world. It is through mediums such as social media that most companies receive and solve customer complains as well as gathering data on customer needs. Through the development of a unique but common culture across all the hotels that Firm X comprises of, customers have the privilege of enjoying the services rendered by their local hotels even when they migrate to another country that has Firm X’s hotels. Customers share their experiences after the purchase of products and service from the firm’s hotels online, hence the uniform experience across all the branches, (Salmela and Spil 2002. p89)

Globalization strategy in the hospitality industry also includes the development of individual employees’ leadership skills, (Lee and Lee 2008, p.123). This is because the international standards of service provision require the employees to serve the customers in a way that causes them to come back over and over due to the memorable experience that they receive. It is worth noting that customers are unique, and since one employee will be serving some different customers daily, they need to be equipped with relevant knowledge on leadership and decision making. Firm X’ employees have the chance to gain such skills through the company’s international program which is known as Young Potential Award. Other than leadership skills, the award also recognizes teamwork, a character that employees can only attain if they are well led and at the same time possessing competitive personal leadership skills.

Response Strategies

Kim et al. (2009, p.448) defined response strategies as the guide in an organization that helps it to achieve both its objectives and purpose. They include the decisions and actions conducted as a way of implementing the formulated goals in a firm. Response strategies are market-based since they help in ensuring that customers’ orders are effectively received and acted upon. This requires the effective commitment of organization’s resources in both the forward and the reverse movement of goods and services.

Firm X recognized the fact that it might have a competitive corporate strategy but fail if its talented and competitive employees keep leaving, (Sprouse 2009, p. 259). The executives had to, therefore, strike a balance between corporate change and corporate strategy. If competitive employees fail to be recognized and rewarded in the best ways possible, they are likely to be disloyal to the company. In the quest to ensure that the company’s competent employees remain in the firm as a way of achieving response strategy, Firm X evaluated its employees’ beliefs and what they stand for. For instance, the CFO confirmed that he is a man of numbers and he always made his decisions with the guidance of the numbers. However, it was until he was involved in group discussions concerning the change of leadership culture. Most of the employees were against the change for decades. However, as the discussions continued, positive changes in teamwork, cooperation, team spirit and willingness to communicate and find out other employees’ opinions was realized. With time the CFO realized a positive financial impact from the same.

Marketing Strategies

Marketing strategies refer to the concept in which organizations formulate and implement ideas that are aimed at improving their capability of attracting and maintaining their target customers. Most scholars claim that marketing strategy evolved from market segmentation and market structure, and hence the diverse definitions by different scholars. According to Cravens and Piercy (2003, p.44), marketing strategy can be started by a company that deals with either goods, services or merchandise, as well as institutions. It entails coming up with strategies on what to do with customer’s minds and perspectives, rather than what to do with a product or a service. Resources are put at the disposal of the employees to influence customers’ decisions. For instance, Firm X is committed to ensuring that any guest that checks into their different hotels will prefer using the same hotel’s services globally in future. The company is expected to realize its marketing goals through offering unique experiences to its customers.

Jain and Haley (2009, p. 51) define marketing strategy as the process of designing an organization’s goods and services as well as its image takes a significant place in the minds of customers. The executive is thus supposed to come up with a strategy that will ensure that the organization remains at the heart of the customers. Firm X is committed to creating a culture that will ensure that the company’s image remains positive and competent to its markets.

Marketing strategy is the central element of organizational success since it has a scope of organization-wide. Its positive of adverse impact is felt across the whole organization. It also includes the act of changing both tangible and intangible characteristics of the firm in all the departments. As part of marketing strategy, Firm X’ s human resource department has put measures in place to ensure that the firm is known as the best employer to its labor market. By attracting highly competent skills and sustaining its current talented workforce, the company is expected to realize its cultural change strategy as planned. To realize this, the department created an employer value proposition which depicts how the current employees feel about the company, as well as how the outside world views it. There are three traits that have been identified as competent enough once the targeted labor market gets to identify them: identifying with clients’ wishes a wholehearted engagement in providing a holistic customer experience and blending modernity and tradition.

Marketing strategy is a mechanism through which Firm X expects to gain a competitive. Through employing and retaining competitive employees, the firm is expected to have provided more efficient services to its guests and minimize wastage of both time and other resources. The above action will not only improve the quality of the services offered but will also save the costs that are associated with recruitment. The resources that the human resource team would have spent on recruitment will be channeled to other processes that will add more value to the firm, for instance, in motivating the employees. Lower costs in the human resource department will lead to lower total organizational costs which will, in turn, enable the firm to provide quality services at lower prices, as compared to its competitors, hence earning a competitive advantage. A competent team will also be more innovative and creative in providing services to the guests.

Companies develop marketing strategy at different levels, (Rust et al. 2004, p. 115). For instance, Firm X developed its marketing strategy at a corporate level, with a clear focus on developing the corporate culture. Hence, having a direct influence on the products and services quality, innovation as well its corporate image. The strategies are directed towards the breadth and the scope of organizations diversification. One of the most evident methods of diversification is the different geographical location of the firm’s hotels.

An Assessment of the Extent to Which People within the Organization Are Engaged with and Contribute to the Change in Corporate Culture Strategy in Firm X

In the rapidly growing hospitality industry, professionals are highly connected and more mobile, (Pearce 2000, p. 17). Their contribution to the organization’s strategies is therefore expected to be high. Also, the employees are more focused on values such as reliability, respect as well as mutual esteem. The future of Firm X’s business, therefore, lies in its ability to unite the employees. One of the methods in which the firm was able to unite them was through holding discussions on the issue of corporate culture change. It is evident that employees at all levels were given a chance to participate in deciding on whether to change the company’s culture or not. For many decades the employees were against the idea. However, with time, they developed teamwork and unity and were able to get to an agreement on changing the corporate culture.

The employees also understand their responsibilities in achieving corporate culture change. Organizational culture refers to an organization’s way of life, (Poister 2010, p. 22). The way of life refers to the beliefs and behaviors adopted by the employees. This confirms the need for the total cooperation of the employees in achieving the strategy. The employees are expected to go through series of training and developments with the aim of improving their skills as well as their understanding of the strategy. Their participation is therefore likely to be useful since they will have adequate knowledge and skills of what is expected of them. Also, their participation will also be enhanced by the fact that awards motivate them. Motivation makes employees work with more dedication since each one of them will be looking forward towards winning the awards.

Firm X is an intentionally growing organization that based on upholding its tradition. The new strategy represents the employees’ commitment to corporate values. The strategy is based on ensuring that the employees adopt a lifestyle that will lead to the overall improvement in service provision in all the hotels. Its values have helped the firm to position itself as an international, dynamic brand where guests feel at home, and the fraternity treats one another as a family. The employees display remarkable traits while offering their services, for instance, passion, caring, perfection as well as vision. For the guests to be in a position to enjoy the characteristics, the employees must have achieved, acquired and displayed them internally. They, therefore, support each other through teamwork and sufficient vertical and horizontal communication.

Recommendations on How Strategic Processes in Firm X Can Be Improved

Treat Every Guest Like a VIP

Everyone cannot be a celebrity, a leader or royalty, but it is vital for all the guests to be given a memorable experience that will make them yearn for a repeat. All the guests may not book for the VIP services, but it would be wise to the extent some of such services to every guest. The employees should be trained on having a sense of urgency in serving every guest, show them undivided attention and response. By so doing, the guests will reward the firm with necessary referrals, loyalty, and even patronage.

Make Training an Everyday Activity

It is important to make training a daily activity for the staff, rather than being a one-time ev