Strategic Management In Small and Medium Enterprises

Question: Discuss about the Strategic Management in Small Medium Enterprises. Answer: Introduction: There has been a recent growth in the industry that is expected to be sustainable for half a decade. The brewers in the industry have been boosted by the growth that has been seen in the emerging markets in china, India and Brazil that has been fueling their capital investments. The consumption of beer is expected to rise in the coming years. However, there are threats facing the market that has displayed a risk to the projected growth (Ledovskikh, 2016). There has been a financial crisis that has been promoted by the fall in demand, increased competition in the market, and the fact that the some governments are focused on reducing the consumption of alcohol. Thus, the traditional global brewers have been driven by the threats to look into invigorating the supply chain, create umbrella brands and also drive a strategic innovation to build the market share. Research has critic the market implying that the consumption in the markets in the United States and Western Europe have been sta gnant because of the demographic transformations strict regulations and tax rules connected to the universal financial crisis (MarketLine 2015). America has always been seen as the original home for craft beer and it has consider its craft beer to use traditional ingredients. The Australian beer market comes in the history with iconic brands that appears to have deep connection with the state, the origin of manufacturing and where growth opportunities were aimed at developing distributions networks between states. The distribution of beer in the Australian market is guided by licensing the liquor and also the link between the traditional brewers and the consolidated Australian supermarket industry. The role the Australian government is playing is also important for the smaller operations. The tax system for the government has been favoring the draught beer that is sold through kegs. The traditional brewer has on the other hand been looking to maintaining the status quo through well entrenched arrangements with hoteliers (Rutishauser, Rickert Sanger, 2015). PESTLE analysis, is a concept in marketing principles that is usually used by organizations as a tool to track the environment they are operating in and to plan a launch of new products in the market (Dransfield, 2004). PESTLE is a mnemonic that stands for Political, Economic, Social, Technological, Legal and Environmental. The tool can give the beer industry a birds eye view of the entire operational environment from various angles to check and track while developing new ideas (Rao Sivaramakrishna, 2008). The industry is surrounded by different stakeholders. The suppliers are the ones supplying the industry with the raw materials to make the brew. The competitors are the companies that have similar products as Chester Kent Craft Beer. The customers are the target markets that the industry intends to sell the brew. (Gorgenla?nder, 2010). The political factors involve the strict legislation set by the government regarding alcohol consumption that may hinder clients from buy the product. Such actions by government to limit alcohol consumption might prevent many people from taking the brew and thus, low customer demand. The environment in this case may be the premises around the company that may raise issues concerning the pollution effects of the company. Such may raise issues that could make the company lose focus while dealing with concerned authorities. For the legal aspects, it may include the taxations that the authorities have imposed on the alcohol that may force the company to raise its prices that may then be followed by few consumer consumption. The socio cultural factors as the religious beliefs may force the people to stop consuming alcohol. Also, there are certain cultural values that do not allow alcohol consumption. Economic elements includes the financial crisis that can affect the brewing companies. Also, there is the competition in the global market that may make the company incur more costs than expected to be able to become sustainable in the market. Technology is also an important aspect in the industry. The use of technology can imply in terms of online marketing and transactions and also, Chester Kent Craft Beer can use digital machinery in its production. Industry environments The industry is revolving around the stakeholders for the company. The customers, suppliers, employees, and other stakeholders needs to be considered for the success of the business. Porters five forces is a tool for analysis that is usually used to analyze the competition levels within an industry and business strategies development. The tool draws upon the economics of the industrial organizations to derive the forces that defines the competitive levels and as such the attractiveness of the industry. The forces were developed to help companies to be able to assess and evaluate the competitive strength and position of a business corporation (Kossowski, 2007). The forces discovered by porter can help the beer industry globally to identify where the power lies in the business situation considering there are expected growth and also financial crisis is affecting the business (Day Wharton School, 2004). Forces narrative Industry Rival- beer industry if facing a lot of competition and rivalry as there are many companies in the field that offer similar products. The companies all aim at securing a huge market share and to hold a higher position in the market segment. In the international market, there are many rivals and this causes the industry to become highly competitive. Bargaining power of suppliers-considering there a government regulations controlling the company operations, it is easier for the supplier to take advantage of the situation and hike the prices of their raw materials. With this, Chester Kent Tap House and Brewer will have no word but to comply with its suppliers to be able to remain in the market (Roy, 2009). Threat of new entry- Chester Kent Tap House and Brewer has no major threats of new entry. Entering the industry is not quite easy considering the different forces that places barriers in the market. The partnership has already set its roots and new entries will have to work out and use more resources to compete with the company in the domestic market. Threat of substitutes- there are no threats of substitution in the market and the company has no fatigue on this as the regulations in the industry has made it difficult for other parties to think venturing into the business. Bargaining power of buyers- following the regulations posed the government on the consumption of liquor, the company is at the verge of losing a lot of customers who fear falling victims of the laws. As such, they can force Chester Kent Tap House and Brewer to lower the prices of the beer so that they can be driven into drinking. Even though the company might be running loses, it will have no otherwise as it will have no customers it does not set up strategies. Complements complementors may cause the customers get confused and buy their products as they are more or less the same as with what Chester Kent Tap House and Brewer might be offering. Complementors manufacture products that are similar to the rivals in the market causing an intense competition. Key success factors are the functions and activities involving business practices, and are defined by the market and viewed by the customers and are termed critical to the customer relationships. The success factors are defined by the market and by the customers and are never defined by the company. Such factors always revolve around the skills, processes and systems. KFS are normally three to five areas where a company may place a lot of focus to be able to attain its vision. These success factors may also be major flaws that will need to be addressed before the goals can be completed or the strengths that has to be preserved. Key Success Factors External forces Industry responses Success factors v Excellent skills v Good customer service v Reliable distribution channels v Good promotion techniques v Chester Kent Tap House and Brewery should seek a superior workforce talent, quality control and design expertise among other skills relevant to the beer industry. v Chester Kent Tap House and Brewery has to find the latest technology applications and innovations and incorporate then in the business. There can be use of internet to make purchases and supplies. v Should have the best skilled personnel in the manufacturing of the brew v Ability to reach customers at the convenient time possible v Ability to create brand awareness to target customers v Adhering to the law and regulations governing the industry v Use of latest technology to improve the production process. KSF narrative For a company to be successful, there has to be the application of the most modern ways of conducting business that will increase the chances of becoming the top positions in the market. Applying the latest appropriate technology can save the company costs and manpower and also increase efficiency. The manufacturing of the Chester Kent Tap House and Brewery has to be focused ion the best quality products to remain competitive in the market. The distribution channels has to be more than anyone can expect (McLoughlin Aaker, 2010). The customers should get the products easily and not to hustle to access them. To make the products become known in the market, Chester Kent Tap House and Brewery has to select the best marketing tools to enhance its products awareness. There is also need to have the best skills that will offer the best services aimed at customer and entire stakeholder satisfaction. Top most is that the company has to be able to make the business flourish in the best moder n ways than ever (Analoui Karami, 2003). Chester Kent Tap House and Brewery has to find the latest technology applications and innovations and incorporate then in the business. There can be use of internet to make purchases and supplies. The brewer can opt to make the best quality drinks and find means to reduce the production costs. The management can as well decide to be flexible to make a range of products. The brewing company should be able to identify the best marketing strategies. This may be advertising, customer service, and attractive styling among others. Chester Kent Tap House and Brewery should consider having strong networks for wholesale distributors and suppliers, and also figure ways to reduce the costs of distribution. Chester Kent Tap House and Brewery should have superior information systems, ability to respond rapidly to the changing environments and the ability to conduct the business in more modern ways. Discuss the value of the rational models (such as PESTEL, Five Forces and KSFs) in contemporary strategic planning PESTLE is a mnemonic that stands for Political, Economic, Social, Technological, Legal and Environmental. The tool can give the beer industry a birds eye view of the entire operational environment from various angles to check and track while developing new ideas. The beer industry can use this tool to research the market to find alternatives of the legal and economic challenges that has been seen to be a persistent issue to the industry. All the aspects of the technique are critical for the beer industry as it gives more than just the understanding of the market. It is also at point to represent the hub of the backbone of the strategic management that defined what the company should do as well as accounting for the industrys goals and stringed strategies. Porters five forces is a tool for analysis that is usually used to analyze the competition levels within an industry and business strategies development (Bulcke, Verbeke Yuan, 2009). The tool draws upon the economics of the industrial organizations to derive the forces that defines the competitive levels and as such the attractiveness of the industry. The forces were developed to help companies to be able to assess and evaluate the competitive strength and position of a business corporation. The industry can use the porters five forces to understand whether the new products in the market are profitable. At the point of understanding the area where the power lies, the theory can also help the companies to identify the strong areas and also improve the weaknesses aside from avoiding mistakes. Key success factors are the functions and activities involving business practices, and are defined by the market and viewed by the customers and are termed critical to the customer relationships. The success factors are defined by the market and by the customers and are never defined by the company. Such factors always revolve around the skills, processes and systems (Sadgrove , 2005). KFS are normally three to five areas where a company may place a lot of focus to be able to attain its vision. These success factors may also be major flaws that will need to be addressed before the goals can be completed or the strengths that has to be preserved. References Analoui, F., Karami, A. 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