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Introduction of PESTLE Business Strategy Assignment
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Part A
1. Application of appropriate business frameworks
PESTLE analysis (Information is too limited, please add more discussion and relate it to the scenario
Political - There are no legal political parties in Qatar. Still, Qatar plays a vital role in worldwide politics. It is known as an oil-producing country since it receives oil rent (Chatzoglou, et al 2018). The political rulers have never indulged in damage to the performance of Qatar. Some poor political condition has been identified in this country as UAE and other countries has boycotted this country. The major reasons that the political condition of this country is not enhancing the efficiency of export activities.
Economic - In the past decade before the investigation of oil, Dubai was dependent on the gold and fish business with other countries. The Qatar economy expanded after the exploration of oil, and this decade Dubai was dependent on commerce and tourism. As per the available information is identify that in 2020 the GDP of this country was USD 146 billion. The financial condition of this country has been contemporated as effective to ensure the efficiency of business organisations.
Sociological - The visitor who visits Qatar from a different world country with the main objective to earn money and send back the money to family finds it very difficult to survive. The living conditions propel it very hard with extra working periods and an uncomfortable arrangement of living provides spoiled food. Total population of the countries 2.9 billion and out of them 15% are belongs to this country. It means that the availability of residence of Qatar from other countries are high.
Technology - Qatar continually focuses on innovating and developing technology with the sources of income generated from commerce and tourism. The technology of Dubai helps to attract tourists to visit Dubai and helps to generate income. As per the available information it is identified that 90% of people in this country are using social media. Organisation which are operating in this country will be cable of implemented the marketing strategy with online processes.
Legal- Qatar is known as one of the safest cities in the world with a crime rate of 0%. It shows the rules and regulations are stringent. Western clothing is allowed but no one can move around uncovering excessive body parts in public nor is publicly affection and love allowed to be displayed. Islamic law and civil law has been used in this country and his contemplated as combined. Wins that all few points of the legal processes has been identified in this country as both the civil law in Islamic law has been combined to determine judgement.
Environmental- Qatar has various environment-friendly developments that help in sustainability to encourage a greener economy, Qatar prohibits sea dumping and legislation. Tourism has been contemplated as another business for this country as it is maintaining its environment in effective way.
Customer- zam zam is highly able to satisfy their customer with their product and services. The firm manages its customers much more closely and keeps regularly informed regarding the project process.
Supplier - Zam Zam closely monitors and keeps these people knowledgeable and checks with them regularly to confirm they are not facing difficulties on the project.
Shareholder - The High power and low-interested stakeholders are known as the crowd (Christodoulou, 2019). The several needs some ongoing interaction about the project evolution but probably the slightest of all stakeholders.
2. Critical analysis of the macro environment
Ansoff’s growth matrix model
Market penetration - The idea of growing existing goods and services into existing markets. Market penetration is less risky as a relative term, Zam Zam trying to expand marketing efforts or stimulate distribution processes (Leiber, et al 2018). Reducing the price of goods to attract new consumers within the market segment.
Market development - zam zam targets selling existing goods and services into the new market of Qatar. The market development strategy is not risky because it doesn't need new investment in goods and services improvement.
Product development - Zam Zam trying to focus on launching the new product into the existing market. It looks to enlarge its share of wallets from the consumers, it plays on brand loyalty and it can be achieved by investing in goods and services to improve an altogether new launch of goods and services.
Diversification - Zam Zam follows the concept to enter a new market with a new product and services into the market.
3. Analysis of internal environment and organizational capabilities
SWOT analysis
Strengths - The strengths of zam zam are it has a strong brand name, manages the customer wisely, looks after the demands and difficulties of the consumers which helps to create a loyal customer, and regularly updates the technologies. As per available information it isidentified that more than 95% of the people of Qatar has used the social media. The organisations which year working in this country will be cable of using social media for marketing strategies.
Weakness - Zam Zam has a high level of debt, and it has an inadequate chain of suppliers. Political issues has been identified in this country and this is the only reason for which other countries have boycottef Qatar. Only 20% of the total population and contemporated as the President of Qatar and it reduces the efficiency of this country as the people who came from different countries may not be considered as the sustainable source of revenue.
Opportunities - Zam Zam has favorable external factors and it provides slight advantages, it's expanding its business into the market by launching new products into the market. GDP of Qatar has found to increase in every year this is the only reason for widgets economic condition considered as good for the future sustainable situation.
Treats - Zam Zam has a treat from their several threat factors from the existing competitors in the market (Thomas, et al 2021). The common threats involve things like increasing the cost of raw materials, increasing competitors, tight labor supply can harm the organization. This country will not be capable of developing there politicly shoes and that good reduce the export of that country.
VRIO framework
Value - Zam Zam has a value with high rarity, it keeps the organization in competitive parity. Its value and rarity find the next obstacle unrivaled.
Rarity - Zam Zam has resources of value and rarity, it's affordable or simple to copy (Tsatsoula, 2018). It offers something that'. It helps with value and rarity to recognize the upcoming difficulties in the model.
Imitability - Zam Zam has valuable and rarity it has temporary competitive benefits that are rare and valuable and are difficult to emulate.
Organization - ZamZam has internal organizational support that helps to achieve the target. It helps to recognize all four variants of the ROI.
McKinsey’s 7S model
Structure - Zam Zama has well managed the department and the team is well arranged regarding the managerial reporting. Proper structure will need to be identified and it will help in developing the performance of any organisation. This is only reason for we just we need to be mainted by the Organisational Management in dancing efficiency employees.
Strategy - The company plans for building and maintaining competitive benefits over the competitors. Strategy will need to develop that will help insure in the sustainability of the organisation. Only 40% of the income could be invested at the time of developing the strategies and it will help in improving the business performance.
System - The company has made a separate department for allocating the job and keeping a record of daily work. Different processes we need to permitted by the organisation like all the business processes will need to be mainted by different management.
Shared value - The core value of a company and speculation of its common work moral. Organisation management to improve their business strategies that will be given of enhancing the interest of employees. This will help in handsome the values of this organisation.
Style - It shows the company has espoused the leadership technique.
Staff - The company has quality employees and ethical capability towards achieving the target. Use of the employees will need to identified as it will help in reduce your problems. Employees will be capable of enhancing their performances.
Skills - The company has skilled and ethical employees to complete the target within a period.
Value chain analysis
Primary Activity
It refers to going straight for the production of the goods and implementation of the services of the organization it involves;
- Inflow logistics: It refers to the warehousing of goods, receiving the goods and stocks, managing the presence of original material and the component of an.
- Functioning: The functioning of this is related to converting the raw material into the found goods.
- Services after the sale: The exercise is interconnected with the distribution of the goods along with the shipping of the product, and at the end, it involves advertising and making the strategy for the goods and services.
- Outflow logistics: The outbound logistics of the is related to the packaging of the product, and the sorting of the goods.
- Secondary activities: It boosts the primary movement of the organization to become more effective in the work and effectively generate benefits of a competitive market.
- Land and building: It refer to the organization's administrative and heir key, along with planning for the upcoming events and financing for it.
- Procurement: it indicates the gathering of equipment for the production, raw material, services, and component of an organization.
- Human resources of management: It refers to the organization's department for hiring, recruiting, training for the allocated period, development in work, retention, and the remuneration of the employees.
- Advancement of the technology: The advancement of the technology for the organization refers to research and improvement of the product, the latest collection of goods design, the research and requirement of the market, and the captivity of the development involved in this method.
4. Critical evaluation of the internal environment
The internal environment indicates the situations and resources available inside an organization. It is also referred to as the organizational or resource environment.
The internal environment is monitored by the manager in the business long run. It shows the comparative strengths and weaknesses of the organization (Irfan et al. 2019). The strengths are the positive internal features of an organization that enable it to attain its expected targets and weaknesses are the negative internal features that are responsible for the restriction of the performance of an organization.
The internal strengths of an organization are listed below: -
I)Reliability
Reliability features the responsiveness and loyalty of an employee in the organization. In the working space, a reliable employee serves reliability to its assistants whenever needed and those assistants could always depend on those employees for help or guidance (Sasagawa, 2019). The administrator of those assistants possesses the idea that the assistants could depend on those administrators to increase the assumptions and put effort into an excessive amount of work.
ii)Adaptability
Adaptability explains how an employee could easily adjust to the changes inside an organization. In the workplace, an adaptable employee could easily gain knowledge about fresh techniques and majorly accept these fresh changes in a positive manner (Baierle et al. 2020). The adaptable employee also plays the role of an ideal worker to its assistants to remain positive during changes inside the company. It is being mention that this analysis report is going to demonstrated with the adaptability and compatibility of the employees work and effects of the organization. This is being more effective in this report of organizational analysis.
iii)Self-directed
Self-direction explains an employee who remains disciplined in the absence of an administrator (De Fano et al. 2019). Inside an organization, a self-directed worker is beneficial to the management since those workers do not require continuous guidance or remembrance to finish the obligations provided to those workers by the management.
The internal weakness of the organization is mentioned below:-
I)Absence of honesty
Regarding an efficient internal environment analysis, the workers should be honest in the estimation of the company’s present position and its probability to reach organizational goals (Zhu, 2019). An investigation that is dependent on the assumptions of the workers' thought process regarding the management's opinion instead of the prospects provided by the data and evidence does not accomplish the objective of the analysis.
II)Absence of Input
The internal analysis involves various distinctive outlooks. Due to the possession of tight control on the limits of the procedure, the outlook of the internal analysis results in less comprehensiveness of the output product. The restriction of internal analysis to management by Zam Zam, for instance, the company would miss the inputs which were to be supplied by the managers of the lower level that could provide a much more detailed impression of the feelings of the customers regarding the capability of a product to reach out to the demands of the customers (Gallego-Posada, 2018). A sole proprietorship business also requires to recognize feedback from other customers when executing an internal analysis and promote information from customers, dealers, investors, and other shareholders whenever required.
III)Absence of concentration
Competing companies like Zam Zam possess defects but an internal analysis must not be much accurate to solve little issues with the same force as more serious strategic considerations. The internal analysis should not be minimized or given the task of identifying places that have no direct connection to the business. The company should perform this analysis for focussing on the crucial objectives of the business and the ability of the company to achieve those objectives and then turning the focus of discussion to the goals of the organization. Due to the absence of concentration, the internal analysis could take the shape of a list of insignificant successes and failures that is not enough for proceeding further with the business.
5. Application of Porter’s Five Forces Model
Competitive Rivalry
The competitive rivalry of Zam Zam in Qatar is very high since the number of new companies which have recently entered the market of that country is much more than the existing companies and for this purpose, it has to face stiff competition provided by those new rival companies (Campa and Kedia, 2022).
New Market Entry
The entry of new companies in Qatar has resulted in increasing and tough competition for Zam Zam to sustain itself in the market for a long period due to the launch of new products and efficient services by those companies which were not earlier provided by Zam Zam to customers.
Substitute Products
The launch of fresh substitute products by the management of Zam Zam is responsible for the reduction in demand for the existing products which have been sold to the customers previously since the increase in the price of one product would increase the demand for another product(Tsatsoula, 2018).
Buyers Influence
The presence of a low number of buyers of products compared to the more number of suppliers of products of Zam Zam is the main reason for achieving the advantage by the company to compete with fresh and cheaper competing companies which could finally reduce the price of its products.
Suppliers Influence
The increase in the option to choose more suppliers of products of Zam Zam has forced the company to shift to alternate products (Gnjidi?, 2018). The availability of a few suppliers of products is responsible for the heavy dependence on those products by Zam Zam to improve its position in the market.
6. Improvement of competitive edge and market position using the Five forces model
Zam Zam should introduce fresh products and highly effective services in the market of Qatar as soon as possible to compete with the newly launched products and efficient services provided by the fresh companies which have recently entered the market of Qatar to maintain its longevity in the upcoming period since it is very difficult to sustain for a long time in the market with the old products which are been present from the past as the choice of customers changes over time since those customers move from obsolete and less-efficient products sold by Zam Zam to the fresh and much more profitable and competent products sold by its rival companies in the country of Qatar.
Zam Zam should reduce the launch of substitute products frequently in the market of Qatar and also should reduce its preference for those substitute products and launch the products in very urgent and emergency cases as well as put more concentration on the price level of the available products in the market which are being sold by the company to its customers from a long time such that the demand for the existing products do not decrease to a huge extent due to the presence of the substitute products in the market since the increase in the price of the original products would result in the increment in the demand for the cheaper and substitute products of those original products.
Zam Zam should put its focus on reducing the option of choosing a large number of suppliers of a particular product by the management of the company whenever needed and select the exact number of product suppliers that are required for the supply of the product at that time since this is the main reason for the company to reduce or permanently restrict the supply of that particular product in the market of Qatar due to which the company had to shift to the sell of the substitute products of that product in the Qatar market and the company had to face a huge amount of loss from the sale of the original product due to the decrease or stoppage of supply of the main product.
Part - B
Question 1
1-Porter’s Generic Strategies
Porter's generic strategies include three various kinds of strategy and are usually used by an organization to accomplish and to keep competitive benefits. Strategic power is for providing the aspects and looking after the weakness, power, and ability of the organization (Islami, et al 2020). The firm with a top market share approach with cost leadership strategies helps to reach the target of the firm.
- Cost and price leadership strategy
The Zamzam is projected to move with the cost and price leadership strategy. It will help the organization to improve the economic sector, help to diminish the number of goods, bring down the cost of production, and provide the goods of Zamzam at a cheaper cost. It will help the organization sustain itself in a competitive market. The profit will be put back into the business to improve the land and building facility of a business, the company will be using the latest technology for the production of goods. Employees will be trained with the latest technology, which will help to reduce mistakes and directly reflect on the balance sheet of Zamzam. The warehouses will be assembled in a huge place while ensuring the minimum charges of the warehouse should be repaid to the landlord (Ali, 2021). The organization will limit the facilities provided to the employee to save the fund for future expenses.
Differentiation Strategy
Zamzam will target a large market. It includes the production of the goods and providing services provided to the consumer will be the best quality. The target of the organization will be the minimum cost of the goods to be provided to the market and least prices will be charged for the services provided by the organization. The organization will be collaborating with external functions for the latest technology and to bring the best quality and latest design products into the market. The main focus is to gain the trust of consumers (Lauer, 2019). It will directly help impact the images of the brand, to sell the goods at lower cost with innovative and quality latest design products to gain the faith of a customer at a lower price for survival into the competitive market. It will help to create added value of goods, expand the brand fidelity towards the consumer, and provide the organization to sustain and compete in various procedures with the competitors.
Focus Strategy
The Zamzam will be setting various internal goals within the organization and focusing on the target to fulfill the goal. The organization's target will be to concentrate on three to four small market divisions and adapt the market blend to a particularized market and it will help to complete the target of a market. The organization is looking to acquire competitive benefits across effectiveness instead of efficiency in the market. It will be a vital strategy for the organization to provide the goods and generate profit in return, the focus strategy has two branches (Snyman, 2020). Focusing on the cost of the organization will provide cost benefits in the target division, and the distinction focus of the organization will help to reach the target differentiation division.
ii)Bowman’s Strategy Clock
The organization will proceed with Bowman's strategy it will be uncomplicated to use the method tools and it gives choice to situate inside a market price of the goods and perceived worth. It has several positions inside the strategies that are less amount and less worth tooting. The organization has methods to sell the goods on a large scale, less the amount this strategy the organization will target to sell the goods at low cost it will be the vital strategy to cover the market and to be successful around the competitors (Pérez-Lara, 2020). The organization is targeting quantity levels to avoid low sales.
iii) Hybrid Strategy
The organization will be trying to move with a hybrid method. It will help to sit within less price of the goods and distinction, it maintains the price throughout in a competitive market, providing the goods at the low price for the buyer and it directly helps to advertise the brand. It is targeted to provide the goods at low cost without compromising on quality and maintaining the average margin for the organization. It will end up achieving higher performance than the competitors. It will benefit cheerful and busy employees within the organization, it will reduce operating cost, helps to create better organization sophistication, will create much more effective work within the organization.
4-Diversification
Zamzam will be approaching a diversification method. It will help to concentrate and improve the product and services in the competitive market by evolving high perceived worth in goods and services of the organization. The organization will be targeting high frequency from overall goods and services manifoldness through to best quality with the latest design product between the bottom of goods. the organization's main object will begin to involve many various kinds of objects. It diminishes the concussion of market changeability, diminishes the time consumed in observing the portfolio, and provides benefits in targeting the long-term investment plan of the organization,
5-Vertical/ Horizontal Integration
The organization will be adopting the extension method. It includes the addition of various competitors in the same field. It indicates the enlargement of methods that helps the organization to overrule several stages of producing the goods, and supplying the goods. Both methods are ruled by the organization in span to sustain their place around the competitors. The horizontal method is the usual which helps to merge the competitors around the competitive market along with their working assets and operations (Campa, 2022). It brings benefits with huge efficiency in working of the employee, diminishes the cost of the production, brings huge dominion around the manufacturing of the goods, helps to expand the market value of the brand, diminishes the competition in the market, and at the end with the providing the best services in the distribution of the goods into the markets.
Question 2
Criticization and interpretation of information and data using
An environmental analysis in strategic administration plays a vital role in businesses by identifying current and probable opportunities or challenges in the external environment of Zam Zam. The external environment comprises political, environmental, technological, and sociological events or movements that could have an impact on the business directly or indirectly. An environmental analysis is naturally executed as a portion of an analysis of strengths, weaknesses, opportunities, and threats collectively referred to as SWOT analysis when a strategic scheme is being prepared. The managers who practice strategic management should perform an environmental analysis periodically, semi-annually, or annually based on the type of the business's industry (Rebelo et al. 2021). Businesses that can recognize events or situations in the external environment achieve a competitive benefit and diminish the risk of being unprepared when faced with further threats. The purpose of an environmental analysis is to enable strategy formulation by keeping decision-takers inside an organization mentioned in the external environment. This process involves changing political parties, expanding pollution reduction regulations, etc.
Environmental analysis includes the examination of every internal and external component that has an impact on the performance of the organization of Zam Zam. The internal factors identify the strengths and weaknesses of the business organization and the external factors serve the opportunities and threats outside the organization. Regarding the execution of environmental analysis, a continuous flow of significant information is needed to identify the best policy of action. Strategic executives utilize the information collected from the environmental analysis for predicting trends for the future beforehand. The information could also be utilized to determine the functional environment and establish the organizational objectives of Zam Zam. The information determines the ability of the goals provided by the organization whether achievable or not achievable including the current strategies. The impossibility to reach those goals with the available strategies by the strategic planners makes those planners formulate fresh strategies or modify the existing strategies respectively. The environmental analysis enables the detection of threats very early that provides support to the organization.
i)Pricing Tactics
The pricing action is a model or technique used to set up the perfect price for a product or service. It enables Zam Zam to select prices to increase the profits and the value of investors during the consideration of customer and market demand. The pricing actions are responsible for the maximum business components such as income goals, marketing objectives, target customers, brand installation, and product qualities. It is also affected by external components such as the demand of customers, etc.
ii)Promotional Tactics
a)Advertising
Advertising involves the preparation of an object known to the public mainly through some type of compensation medium such as advertising in newspapers, etc.
b)Public Relations
Public relations involves managing and distributing information from an individual or other organizations to the customers for persuading the attention of those individuals or organizations.
c)Sales Promotion
Sales promotional offers like discounts, free samples, etc. are used for increasing the interest and demand of customers for the products or services.
A competitive analysis is a procedure of detecting competitors by Zam Zam in the market and performing research on the various marketing strategies of those competitors. In the process of examining how the competitors of Zam Zam are recognized, the company could provide conclusions regarding the strengths and weaknesses of its brand. The stable condition of the company in the market could guide its positioning in the market or the view of its products or services that Zam Zam desires the members of its target customers to possess in the minds of those customers. It is very much necessary to interact with the probable customers regarding the best selection of products or services of the company among the prevailing products or services in the market. The awareness of the weaknesses of Zam Zam is also necessary for the development of the business. The areas where more time and resources are required are to be put under focus by the company.
The gradual growth of the business results in increasing the importance of competitive analysis by Zam Zam. The majority of companies perform competitive analysis at the product level, strategic business entity level, or company level. The very swift nature of the competitive analysis is the main reason for the application by the company to all the various components which are required to construct the organization. Therefore, it could be mentioned that the objectives of competitive analysis are elaborate but those are very much useful for a new organization or a huge organization. The competitive analysis is done with the motive of attaining a few objectives such as the determination of the advantages of comparing of products and services of Zam Zam with its competitors, realizing the strategies of the market competitors currently available, selection of the appropriate business strategy that is required to survive in the market against its competitors. The attainment of these competitive objectives helps the company to defeat its competitors.
i)Pricing Tactics
a)Pricing Skimming
Price skimming is a type of pricing tactic in which the business of a particular company initially charges a huge price for the products and services of that company before constantly decreasing the price to get the attention of a price-conscious market segment.
b)Price Penetration
The goal of the price penetration strategy by Zam Zam is to draw the customers’ attention and attract those customers away from its competitors. This strategy is used in highly competitive markets.
ii)Promotional Tactics
a)Direct Marketing
Direct marketing is a type of connecting a promotional offer by Zam Zam where the other organizations connect directly to a customer selected beforehand and supply a procedure for a direct response from the customers.
b)Sponsorships
Zam Zam assures advice and assistance in the form of sponsorship. The sponsorship practice includes a business relationship between two parties in the market where the sponsorship party assists by financing, and providing resources or services to the recipient party.
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