Strategic management plays a significant role in the success of business organisations, especially in attaining the set organisational goals and objectives. It is the most effective leadership and management tool that helps in navigating the contemporary business challenges. The business environment is increasingly becoming competitive, mainly due to the entry of rivals in the market as well as sophistication in the management styles that competitors are employing in running and managing their businesses (David & David, 2016; Yaseen et al., 2016). Conducting strategic analysis allows the top management and leadership to evaluate opportunities and challenges within the business environment. For instance, Venus Mobile Inc. has continued to perform dismally over the last few years due to poor management strategies. Aligning business strategy with the organisational goals is one of the hallmarks of effective management. The company’s management conducted a strategic analysis to evaluate barriers hindering the achievement of set goals and objectives. This report will discuss the strategic management of the selected business organisation.
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The Venus Mobile company is one of the largest multinational organisations dealing in a wide range of consumer electronic products, mostly smartphones. The Company employs the Google Android operating system in manufacturing its phones (Venus Mobile, 2020). Venus Mobile Inc.’s overarching mission emphasises the need to put a premium on enhancing accessibility of mobile phones to the adult population and providing gadgets of desired functionality at affordable prices. The firm’s organisational culture is anchored on the need to enhance respect and transparency to the stakeholders through dedication and commitment to the created wealth for the shareholders (Venus Mobile, 2020). However, in the recent past, the organisation has registered poor performance and reduction in profitability due to challenges with its current strategic management.
Venus Mobile Inc. has a hierarchical functional organisational structure (matrix organisation). The company has a leadership and management position with the highest responsibility levels at the top and down are the junior employees (Venus Mobile, 2020). The company has different departments, including the sale, administration to enhance flexibility. The division of labour is based on the expertise and areas of specialisation (Tubtimcharoon, 2019). The management of Venus Mobile Inc. organises employees according to their skills and corresponding function within the organisational settings. Usually, employees take directives and mandates from the company’s management and leadership levels. The middle managers implement the directives down to the rank-and-file employees in the Venus Mobile Stores.
Globally, telecommunication is the most competitive sector due to rapid technological advancement. Conducting strategic analysis allows the organisation’s management to identify potential threats and opportunities, including the changes in the legal environment (Wu et al., 2018). It is important for Venus Mobile Inc. to critically examine its external factors with a view of improving its strategic positioning in the global market to spur the desired success and significant market penetration. This report presents PESTEL, SWOT, and TOWS analysis of the selected business organisation to ascertain the effects of internal factors in the management of the business organisation as described below.
PESTEL Analysis and Macro factors
SWOT and PESTEL analyses examine the impact of internal and external business environments, respectively. Factors within and external to the organisational settings have a profound impact on the performance of business organisations. Usually, the PESTLE provides an overview of the anticipated market changes as far as the future performance of a business organisation is concerned (Matovic, 2020). Many factors are present within the external environment, which may have far-reaching implications for the management of business organisations.
As such, to predict the impacts of such elements within the business milieu, it is critical to perform PESTLE analysis (PESTLE where, P-political factors, E-economic factors S-social factors, and T-technological factors, L-legal factors and E-environmental factor to understand and appreciate the impact of such elements in the management of the business organisation (Çitilci & Akbalık, 2020). The advancement in the levels of technology has continued to create platforms where different mobile companies develop products that address the specific tastes and preferences of the consumers in the market (Çitilci & Akbalık, 2020). The Telecommunication industry is currently experiencing a wave of changes from the management and production of different products in the market (Matovic, 2020). As a result, companies have to understand the impacts of varying marketing strategies based on the social, economic, and legal implications in the industry. The following is a PESTLE analysis for Venus Inc. in the telecommunication industry.
Political and Legal Factors
The legal environment has a direct impact on the operation and management of business organisations. The adoption of various pieces of legislation, as well as political consideration, have a direct influence on the success of a company about product development and marketing strategies. In this context, it is imperative for various components of technological devices of the organisation to remain compliant with the legal and ethical frameworks in areas of operation, including those in foreign countries. Usually, countries have different sets of laws that regulate activities and the general management of business organisations (Venus Mobile, 2020). Noncompliance with such regulations can have negative implications on the growth and profitability of the affected business organisations. According to Venus Mobile (2020), ddifferent bodies are mandated with ensuring electronic products such as smartphones meet minimum standards for the safety of the consumers. The management of the Venus Company should put measures in place to address all the regulatory requirements.
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Evaluating political considerations is crucial in enhancing the attainment of organisational goals. Countries with sound leadership and diplomatic relations tend to be stable and more secure for business activities. The global political climate has a profound impact on the growth of business organisations in different countries (Omsa et al., 2017). Although the businesses have no control over the political environment in local and foreign markets, the management must understand the implications of the interplay of such factors, especially in facilitating effective decision-making associated with the marketing strategies and the prospect of the future growth of the business organisation.
Assessment of economic factors is crucial in determining the possibilities of future growth and prosperity of the firm. The purchasing powers of the targeted customers and the financial strength of the business organisation are some of the enabling factors in the success of the business organisation (Venus Mobile, 2020). Financial recessions, such as the Great Depression, hurt the future of the targeted market. Even though the consumers’ tastes for technological devices have remained relatively stable, the incidents of economic downturns significantly lower customers’ purchasing powers, thus affecting the performance of the business organisation both locally and internationally. The ever-rising interest rates on loans and inflation have adverse impacts on the purchasing power of the targeted customers. With the advancement of technology, many technological products are expected to emerge, thus enhancing competition levels in the global market (Venus Mobile, 2020). However, it is imperative to note that worldwide lending rates have improved significantly over the recent past. The advent of globalisation has significant contributions, especially in expanding new market frontiers in overseas countries.
Strategic management analysis should focus on evaluating the impact of social factors on the performance of the company. The management of Venus Mobile Inc. needs to understand the implications of demographic and cultural factors on the tastes and preferences of the targeted segment in the market. The global trend indicates a decline in the aging population. Thus, it needs to need the company to evaluate such demographic factors in the local and international markets (Matovic, 2020). The young population has been growing tremendously in the last few years, indicating an improvement in the targeted market segment. Over the years, there has been a growing demand for smartphones due to functional features, including access to social media platforms such as Whatsapp, Twitter, and Facebook – such features increase the demand for smartphones among the consumers (Venus Mobile, 2020). The demand for electronic products, especially smartphones, is expected to increase by approximately 12% in the next four years.
Technological factors have a significant impact on the production and sale of electronic products. Strategic analysis should incorporate the assessment of the effects of modern technology in the manufacture of electronic devices. Technological has continued to play critical roles in the growth of the telecommunication sector (Venus Mobile, 2020). The majority of the companies in the industry have continued to leverage new technological applications in developing smartphones. The ever-changing tastes and preferences in the market influence the manufacture to produce smartphones that meet such demand (Venus Mobile, 2020). The continued technological advancement creates a platform for firms in the telecommunication sectors to develop differentiated products as the competition intensifies. Some companies are employing the most recent technologies to differentiate their products from their rivals (Matovic, 2020). The management of the Venus Mobile Company needs to leverage the advanced technology in producing new phones that reflect the face of advanced technology. The dynamic nature of today’s markets coupled with changing consumer needs calls for alternative manufacturing techniques that promise end-users tech-savvy smart devices. As a result, the Venus Mobile Company should invest in research to identify various areas that require improvement in a bid to meet customer requirements.
E-waste is one of the most significant concerns among many stakeholders, including the government and other organisations with a vested interest in the business activities in the telecommunication sector. The environmental factors as aspects of the macro business environment entail ecological sustainability (Wu et al., 2018). The unrestricted damping of e-wastes has far-reaching health impacts on the lives of people across the globe. In this regard, business organisations have to find effective ways of managing electronic wastes to prevent further adverse health effects on people (Matovic, 2020). Venus Company is taking a keen interest in the proper management of e-waste through its affiliate business partners. For instance, the organisation has elaborate internal policies in the production methods of consumer electronic products in tandem with regulation policies to protect the environment from further degradation. However, the company will still need to put up effective measures in addressing carbon and other waste production to minimise the adverse impacts of the production processes.
SWOT-analysis helps in evaluating the internal business environment concerning external factors. The international assessment outcomes allow the management to make radical changes concerning the business organisation’s general operations to enhance profitability and growth (Kumar et al., 2018). The SWOT analysis for Venus Mobile Inc. is discussed below.
- Venus Mobile Inc. has effective marketing strategies based on advanced technology to enhance product differentiation and adaptability in the overseas market.
- The company has a large customer base to sustain the demand for smartphones and other electronic devices.
- The Company leverages modern technology in the production of electronic devices, thus making its products attractive in the global market.
- Venus Mobile Inc. employs effective research and design styles for its products (Venus Mobile, 2020; Denning, 2017). Its smartphones have additional features to meet the tastes and preferences of the customers.
- The Company faces stiff competition from well-established companies such as Apple Inc. and Samsun. The global share of the market for the Company has been reducing by a significant margin.
- Venus Mobile Inc. has not been fully captured the tastes and preferences of the targeted customer in its product design and development.
- Currently, the company relies on the Google Android open-source system, which does not compare with Apple’s iOS – most of the customers regard the Google Android open source system as inferior.
- The market for smartphones and other electronic devices has been steadily growing, particularly in developing countries. Such trends assure the company continued growth and profitability.
- The rapid growth of online marketing platforms presents unique opportunities for enhancing the success of the business organisation, especially in its marketing efforts.
- The rapid technological advancement will enable the company to continue designing and developing superior smartphones that meet the needs of the targeted customers.
- The rapid growth in the middle class in the developing and developed countries will expand the customer base for the business organisation.
- The rise of Apple Inc. as the market leader in the production of smartphones and tablet brands pose a great threat to the continued growth and profitability of Venus Mobile Inc.
- The disposable income for the middle class has remained fairly constant, limiting the company’s profit due to reduced purchasing power among the targeted population.
- The company relies on the Google Android operating system, which is less popular among the average consumer (Venus Mobile, 2020).
Usually, TOWS (Threats, Opportunities, Weaknesses, and Strengths) analyzes useful strategic management tools that help identify the strengths, weaknesses, opportunities, and threats by matching the strengths with opportunities and threats with weaknesses. A TOWS analysis is a variant of SWOT analysis (Kumar et al., 2018; Yaseen et al., 2016). The tool enables the management of Venus Mobile Inc. to match its internal strengths and external opportunities (SO) to create maxi-maxi strategies—it entails identifying factors with the greatest potential for the success of the business organisation.
Table 1: TOWS Analysis.
|Internal Factors |
|Strengths ||Weaknesses |
|Opportunities ||SO ||OW |
|Threats ||ST ||TW |
Therefore, it is imperative to note that strategic management remains one of the competitive advantages that business organisations can leverage in navigating stiff competition in the telecommunication sector. Strategic management entails the analyses, such as SWOT, TOWs, and PESTEL, to determine the impacts of external and internal factors in the business organisation’s success. Venus Mobile Inc. has numerous areas of growth and improvement in profitability, as evident in this report. The organisation’s management can leverage this report’s outcomes in addressing challenges and barriers, limiting its growth. Despite the dismal performance, the company can still employ strategic management in enhancing the attainment of set organisational goals and objectives.
Çitilci, T. and Akbalık, M. (2020) The importance of PESTEL analysis for environmental scanning process. In Handbook of Research on Decision-Making Techniques in Financial Marketing (pp. 336-357). IGI Global.
David, F. and David, F. R. (2016) Strategic management: a competitive advantage approach, concepts, and cases. Florence: Pearson – Prentice Hall.
Denning, S. (2017) ‘The next frontier for Agile: strategic management’, Strategy & Leadership 45(2), pp. 12-18. Web.
Kumar, S. P., Sajid, M. D. and BIST, B. (2018) ‘A project on business development, SWOT analysis and customer retention activities in existing potential within a limited territory at reliance communication, Pune’, International Journal of Pure and Applied Mathematics, 119(12), pp. 5843-5864.
Matovic, I. M., (2020) PESTEL analysis of external environment as a success factor of startup business. ConScienS, p. 96.
Omsa, S., Ridwan, M. and Jayadi, M. (2017) ‘The effect of strategic management practices on SME performances in Makassar, Indonesia’, American Journal of Theoretical and Applied Business, 3(4), pp. 71-80.
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