ASSIGNMENT 1

Assignment 1

Assignment 1

Introduction

Today businesses need to adapt changes so that they can answer to the changes occurring in the environment. It has been able to challenge the traditional strategic management theories. SMECO is a company originated from Brazil and has product variety of 2000. It is selling 2000 different products as an answer to the customer demands and needs that are changing day by day. The product range of SMECO includes manufacturing of industrial pumps, cooling towers and etc. The service sector of the firm provide environmental and internet services. The inclusion of the products increases the revenue of the company and played an important role towards the growth of the firm. The report will critically analyse the success of Semco without a written plan and also without following any school of strategy, mainly prescriptive school model which are Planning, Design and positioning school, yet managed to be successful financially.

Discussion

According to Narayan (2000, pp.9) strategic management is the process that involves free flow of information within the organization and outside the organization so that decisions can be easily made. Information historical, current or forecasted is used by investors and the management of the organization in order to make different kinds of strategies. The strategies either made for the short run or for a longer period of time enable the firm to achieve a competitive position in the market. The owners of the organization are aware of the fact that now old strategies will not work and they will have to apply new strategies in order to respond to the changing environment. Transformation is to bring a change at the highest level and at the same time binging improvement at the highest level. Transformation is different from strategy or a restructuring in an organization. Transformation changes occur within the business organization, structure among the people and the process. SMECO was one of the companies that had no proper management, very less human resource and a wide range of products. In the last ten years the firm has been able to successfully transform the business into several sectors. The company when initially run by Ricardo was designed in a new way and the strategy that was used was the diversification strategy because he wanted to change the way of planning and the way of doing the business. As there were very few human resources therefore the entire burden came on Ricardo. He was then given a suggestion that he should create a production team that will be responsible for the production of the business. They will create their own budgets, try to perform according to the budget and in case of any variances found in the budget they will be accountable before Ricardo. SMECO following the diversification strategy of the owner adopted different businesses this is the reason why as the market for the technological products and services increased SMECO transformed its business from manufacturing towards service sector. The transformation requires change of the structure and the employees thus it is not ...