Ansoff And Sfa Evaluation Management Essay

Ansoff And Sfa Evaluation wariness EssayGM could use result development to improve r stock-stillue on a number of brands. nevertheless GM essential pasture to drive down cost. Using Porters (1984) cost based generic outline. It shows reducing cost poop also name a competitive advantage. If be are lowered and price is kept relatively similar this antedate improve profits (Hines, 2004). This could be seen as a fitted and satisfying extract. However how could the costs be come downd? M whatever suppliers are slimy similar problems from the recession. One dodging would be too merge or acquire active suppliers, a method of external development (White, 2004), which would reduce costs, improve kernel competencies and could even lead to technological development. However is this operable? The outline has venture, as this may non necessarily reduce costs or improve profits thus it is not totally acceptable.GM should take place operating in europium for the foreseea ble future. They have throwd the blood line scheme to focus on becoming leaner and evolution core brands, while investing considerably in diversification (Sunderland, 2009). This is the best strategic option open to GM however it must be managed well. Applying it to the main success criteria discount highlight how this is the best action (Johnson, Scholes and Whittington, 2007)SuitabilityThis system addresses the position of GM. Outlined within the SWOT analysis was the need for product development and the introduction of smaller car ranges. GM have already committed to investing if it gets parvenu products into the marketplace faster (Vlasic, 2009). Additionally McAlister (2009), states that GM are already working on new products that they back tooth continue building within the UK plants beyond 2013. An identified strength was its large deliver and distri simplyion network in that respectfore using this core competency it quarter implement new product ranges. If a com petitive advantage is scoreed because it can use the europiuman market as an additional gross gross revenue environment. Although Yip (2003) states globular strategies can have different driving forces, competencies can still be applied if GM understands the local cultures (Lynch, 2003). Staying in Europe is a logical step. To withdraw now could lead to larger costs in the future, such as re-entry into the market as sales in this area cannot be ignored. Economies of scale exist such as an extensive knowledge by suppliers etc so risk would be low for the capital punishment of either new strategies.FeasibilityGM are a global organisation, they have an existing network of both tangible and intangible resources. However significant investment is needed in RD, which could be attained through selling underperforming brands, although as mentioned GM are imparting to commit to this aspect. in that respect are no significant issues of time scale but change is not always immediate . For this strategy to work the rate of change must be quick (Johnson et al, 2007) and adopting a new culture is the priority so the management and workforce must show commitment. This could be difficult as the previous culture was slow to react and very bureaucratic (Maynard, 2009). In the future resources may be needed within Europe and by opting to stay GM will have greater door, making the option more than feasible.AcceptabilityA number of stakeholders benefit from this strategy. They government carry GM to keep sales high in order to endure back their debts and this can be achieved more efficiently by existing in a larger market. GM advised there will be a number of job losses, championing towards their restructure and decline of wages (BBC, 2009). Additionally GM has made the correct decision ethically. This business enterprise is vital for a number of industries and therefore helps towards employment so withdrawing from Europe could have a huge effect on suppliers, dis tributors etc. in the long run GM has also made the best decision for their owners. Staying in this market will increase sales and further product development could help sustain a competitive advantage. Although diversification failed in 2004 (Vlasic, 2009) with the mass produced but under marketed EV1 range (Vlasic, 2009), it is possible with the correct investment and understanding it can be a success.Although as outlined above this is the best strategy available to GM, focus must be placed on developing new technology. Bowmans strategy clock (appendix 12) shows that offering differentiated products at a market average price can lead to increased sales through high perceived renovation benefits (Wheelen and Hunger, 2008). If GM were to market any new technology at a high price it could lead to strategy failure as these products may already exist. In similitude if GM introduces similar products at a lower price it could create an immediate and sustainable competitive advantage.E xample 2Ansoff Matrix, proposed by Igor ansoff, utilise to classify and explain 4 strategies for business growth. For the case studied, GM opted for desegregation and market penetration.GM uses consolidation strategy (Ansoff) to increase sales without afloat(p) from its original product, we speak of market strategy. GM wants to penetrate this market by improving product quality and provide a real service to these customers. To achieve its goal, GM spends large sums of money in marketing and communication, identical advertising for example. This strategy is most-valuable for GM because retaining existing customers is cheaper than attracting new customers. It therefore decided to keep five brands already in its possession.Yet, GM is touching beyond its customer base to attract new customers for its existing products. This strategy often involves the sale of existing products into new international markets. For example, the new GM wants to expand its market share thanks to the de mand emerging countries selfsame(prenominal) Brazil, China, and India. Indeed, these countries are expanding and it is a growing market for years in the beat back industry.Evaluation of the strategiesTo evaluate the effectiveness of the strategy of the new GM, the SFA (Suitability, Feasibility and acceptability) is an important tool. This theory presented by Johnson, Scholes and Whittington (seventh edition, p. 371, 2005) may help us to analyze the probable of the strategy.The suitability of this strategy is well. The old GM was producing big cars and consumed a lot. They were not economic and do not respect the environment. Thus, the American manufacturer has seen its sales fall in recent years.In addition, the feasibility of this option is good. The new GM has a lot of knowledge and an impressive physical capital. GM already knows the brands it represents. In addition, engineers are working continuously to develop more economical cars. There is a university in the company to p rovide access to information. that, GM today focuses on 5 brands instead of 11 it can devote a largest share of investment in the RD sector. To finish, GM has reliable some aids.To finish, the acceptability of this strategy is good. GM is supported by many another(prenominal) governments and organizations (for the development of new energy) for its restructuring. It receives fiscal aid. The US government spends money for GM restructuration, in return GM has to develop clean cars.Personally, I chose the same option as it is obvious that the Old GM had a liberal range of products. But they do not come up to consumers expectations. In addition, I took the risk to launch the company into emerging market because there is great potential in sales. Thus, I proposed new models for this market and even open factories, specifically to come up to consumers expectation.Example 3 realisation and Evaluation of StrategyProduct development and related diversification (Ansoff, 1988)Mc Afees soft ware will provide Intels chips with hardware-enhancing security (Takahashi, 2010) which leads to a competitive advantage. This strategy is classified as product development since Intel delivers a technologically circumscribed product to its existing market (Johnson, Scholes Whittington, 2008).As Mc Afee remains an singly run security company which stays in its market (BBC News, 2010) it is regarded as one key player in the emerging market of mottle figure (Takahashi, 2010). This vertical integration modifys Intel to expand to new markets, diversify the risk through a broader product portfolio and provoke its growth perspectives. Therefore Intel follows the strategy of a related diversification (Johnson et al, 2008).SuitabilityThe strategic directions are suitable as long as they address the key issues identified previously (Johnson et al, 2008). As Intels current market is almost stagnating, the strategic direction should enable long-term growth. Moreover it should incorpora te the knowledge of consumer and technological trends in mobile computing.With the encyclopedism of McAfee, Intel addresses the trend for security and energy efficiency in chips. Moreover they react to the saturated market of PCs as McAfee is expected to be a key player in the growing market of cloud computing (Takahashi, 2010). Another issue arises from anti-trust regulations which prevent Intel from acquiring competitors. A vertical integration does not violate any laws while it enables Intel to enhance its growth perspectives in new markets (diversification).FeasibilityIntels strength to finance their investments from their operating profit supports the financial feasibility of the acquisition strategy. Intels healthy financial position allows the company to work out RD to integrate McAfees security software in their chips. Moreover they gained much contract with MA initiatives from the past (Intel, 2010). This implies that they have strong resources and competences in place which enhance the strategys effectiveness.AcceptabilityThe acquisition was decided unanimously by the both boards. However, go stock prices of Intel (Appendix 6) reflect suspicious shareholders (Hardawar, 2010). A possible reason for suspicion is seen in a lack of understanding of the gains in comparison to the abundant acquisition costs. Intel argues that the financial position justifies the $7.68bn acquisition (BBC News, 2010) which is supported by the confidence to regenerate the $5 billion cash spend for the acquisition in less than a year (Hardawar, 2010).However, the deal may help Intel to gain wider long-term profit margins which reflects a higher shareholder value (King, 2010). Since the acquisition enhanced Intels vertical integration focus and does not place any threat towards anti-trust violations, there is no risk incorporated with governmental disturbance (Hardawar, 2010).