BUSINESS STRATEGY

HNC\D Business Strategy Assignment (2012/13)

HNC\D Business Strategy Assignment (2012/13)

Task 1 (With reference to the Electrolux Case Study (Appendix 1))

The first step in stakeholder analysis is to identify all relevant parties (person, group of persons, organizations, legal entities, and governmental bodies) that are likely to be affected by company's decisions or actions or are likely to affect the decisions or actions of the organizations (Thompson). In the case of Electrolux, the stakeholders are shareholders, competitors, suppliers, lenders, stock/debt market and financial analysts, employees, customers, government, special interest and pressure groups, general public and the community in which the company operates. The next step is to arrange the stakeholders in order of their power/influence over actions of Electrolux and their interest in the actions of Electrolux (Thompson). As depicted by Figure 1 Government has high power/influence over the action of Electrolux, however, it don't have any substantial interest in this particular organization except taxes, therefore, the best strategy is to keep government satisfied by providing relevant information and complying with laws and regulation. Customers, employees, lenders and shareholders, on the other hand, will not only have a special interest in organization's actions but also have substantial power influence over the actions of Electrolux, therefore, the best strategy would be to manage them closely which is evident in current and future strategies of the organization for e.g. customer-oriented focus, competence based employment and reducing costs for improving profitability which will ultimately benefit shareholders. Then are the stock/debt market analysts which may have high interest in organization actions but little power on the actions of the organization since they can only recommend the organization share/debt to others. Likewise organization like Green Peace will have a lot of interest in the activities of the organization but not so much power, therefore. in such a case, the best strategy would be to keep them well informed of organization's action and their impacts like by issuing annual statements. Finally, are the general public and local community which might have little interest in organization's activities as well as low power. In such a case when making strategy it is best to keep monitoring these groups. If these groups do start to have some concern over the organization activities it is organization must respond quickly before the event spills over.

Figure 1

Task 2 (With reference to the Electrolux Case Study (Appendix 1))

Porters Value Chain Analysis for Electrolux:

Figure 2

Since porter value chain describes set of activities that an organization performs in order to convert inputs into outputs, generating value from customers starting from inbound logistics till after sale services it helps us to determine value added at each step by the organization and how will it contribute to margins or eventual profitability of the organization. It also analyses the effects of support function into the value generating activities such as firm infrastructure, HRM, technological development and procurement (Sekhar, 2009, pp. 115-116). Now let's analyse the impacts of recent strategies of Electrolux on its value chain ...