Business strategy

Assignment 1: The Red Dragon Restaurant

Group
Year 1, Semester 2

WIN KO KO AUNG
Submitted to; Nguyen Thi Tung Uyen, PhD

Contents
Introduction .................................................................................................................................................. 3
Task 1 ............................................................................................................................................................ 3
Strategic planning ......................................................................................................................................... 3
Mission ...................................................................................................................................................... 3
Vision......................................................................................................................................................... 3
Goals ......................................................................................................................................................... 3
Objectives.................................................................................................................................................. 4
Core competencies ................................................................................................................................... 4
Factor that have to be considered when formulating strategic plans ......................................................... 4
Leadership ................................................................................................................................................. 4
Project Management ................................................................................................................................ 5
Human Resource ....................................................................................................................................... 5
Communication ......................................................................................................................................... 5
Culture....................................................................................................................................................... 5
evaluating of the effectiveness of techniques used when developing strategic business plans ................. 6
SWOT analysis ........................................................................................................................................... 6
BOSTON CONSULTING GROUP MATRIX .................................................................................................... 6
PESTEL Analysis ......................................................................................................................................... 6
SPACE Analysis .......................................................................................................................................... 6
Task 2 Formulating a new strategy ............................................................................................................... 7
The organizational audit for Red Dragon Restaurant Group .................................................................... 7
Environmental audit for Red Dragon Restaurant Group .......................................................................... 8
Significance of stakeholder analysis ............................................................................................................. 9
strategy evaluation and selection ............................................................................................................. 9
Alternative strategies relating to substantive growth, limited growth or retrenchment ...................... 10
Appropriate future strategy for the Red Dragon Company .................................................................... 10
Reference .................................................................................................................................................... 11

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Introduction
Business strategy is very important for an organization as it help to attain a specific goals
and objectives. It shows the way to achieve goals and without this it is really tough to complete
in the market with other competitors. Producing a business strategy is one of the major activities
of management. But there is no guarantee of success if any organization has good business
strategy and execution of this. Sometimes organization faces very tough situations but they are
not responsible for those. Organizational activities and performance depend on some internal and
external factors. For that reason reviewing the business strategy is very important otherwise it is
very usual to lose its momentum. Most of the expertise think that business strategy facilitates the
competitive advantage to the organization.

Task 1
Strategic planning
strategic planning is a process which determines the organizational strategy, direction, and
resource allocation for achieving the desire goals. For determining the direction of the
organization, it is needed to know the current situation of the organization and what will be the
future of the organization. Strategic planning has some major components and without those it is
not possible to prepare a complete strategic planning.

Mission
It is the basic aim of a business or an enterprise or an organization. It describes why it exists and
what it does to attain its vision. Mission statement is very important for an organization and it
inspires employees to work together as a team and achieve the companys vision. Mission
statement must be in harmony with company operation. Mission statement is a function or
commitment that an organization desires to meet expectations of stakeholders. It describes how
organizations run their business; identify their customer, identify range of their products/services
and how businesses serve their customer.

Vision
It is the outline of an organization what it wants to be in future, or where it wants to operate, or
what it wants to achieve within a time frame. Normally vision statements are created on basis of
long time organizational goals and future operations. Vision statement is very emotive and
inspirational for an organization.

Goals
Goal is something that man desires, and it is an end result and a specific target. It is the main step
to achieve the targets of an organization. Goal is the destination of an organization and it is the
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contextual planning to achieve a target. Top managements decide the goals of a company and
every others persons will follow the contextual planning to attain the goals. For an example a
company has 50 employees and top 5 officials. 5 officials decide their goals and set the planning
how to achieve the goal; rest of the team members are acting according to the plan. So they
working together and everyone is very much concern about their achievement and goals. If
personal goals are achieved by the employees then it is easy to achieve the organizational goals.

Objectives
Sometimes most of the people are confused about goals and objectives and they treat them both
of them are equal but they are quite different. An objective is the measure of progress which is
needed to reach the target whereas a goal is the details of the destination. Objectives are the steps
to attain goals that means objectives are the part of a goals but goals are not a part of objectives.

Core competencies
It is one of the core components of business success. Core competencies give competitiveness
over other companies. If any company have competitiveness it is sure they are able to penetrate
their desire market. For an insurance company, core competencies are customer service, claim
processing and underwriting of the customers acquisition. For manufacturing sector the core
competencies are distribution, manufacturing process, procurement of raw materials and product
development. It is very essential element to attain success as it acts as cross functional business
process. Cross functional business process must measure cost, time, quality and results. The
objective of strategic planning process is to assess the core competencies of a company. Core
competencies are a set of unique internal skills processes and system provide competitive
advantage in the market.

Factor that have to be considered when formulating strategic plans

A strategic plan is a set of processes undertaken in order to develop a range of strategies that
will contribute to achieving the organizational direction. Therefore, this clearly indicates that
companies have to arise to the occasion that they have to develop strategies that will drive the
organization in achieving the set goals and objectives as per the vision and mission of the
organization. By doing so then the organization will have to formulate strategies that will guide
to the direction and the future of where they want to be as an organization. in this process there
are some factor that that have to be considered when formulating strategic plans. they are
Leadership, Project Management, Human Resource, Communication and Culture.

Leadership
Leadership is a process by which a person influences others to accomplish an objective and
directs the organization in a way that makes it more cohesive and coherent. Leaders carry out
this process by applying their leadership attributes, such as beliefs, values, ethics, character,
knowledge, and skills in order to guide and drives the organization. It's important to note that
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leaders are expected to be mentors who can be dependent on by the people that one is leading.
This means that the leader should be able to exercise skills so that the people will be able to
appreciate his leadership skills.

Project Management
Once the strategic plan is together, there are two critical elements related to project management.
One is to identify the projects that are required to ensure success in the execution of each
strategy. Another is to develop a prioritization of all these projects to ensure the high priority
ones have the proper resourcing to ensure success. This requires a high involvement and
commitment on the part of employees to spend the time required on the projects.
The high level of involvement of employees ensures that they understand the strategic plan. It
increases their level of commitment to ensure the strategy is successfully executed because they
understand how their work and the work theyre completing on the project helps the organization
to realize some or all of one of their key strategies.

Human Resource
Most organizations view the department of human resources as an administrative function
within the organization but they forget that the department has a big opportunity to align it with
its strategic plans. In the corporate world, the essence of human resources strategic and when
properly aligned, it contributes to a successful strategy and the financial bottom line. This
means that human resource needs to maintain a strong administrative foundation and use this
respect in championing for participating in strategic planning meeting. Such move will
ultimately propel human resources to the position whereby it can actually facilitate strategic
planning in organization hence giving value to the organization.

Communication
Strategic Planning processes are successful when a bottom up and top down communication
approach is taken. It starts off with a communication to all levels of employees informing them
that a Strategic Planning process will be undertaken. It includes how they will be involved in this
process. This is the bottom up communication. Employees will provide input to the strategic
planning process through feedback surveys, focus groups, meetings, etc. regarding their ideas for
organizational direction, etc.
It is followed by the top down communication. Senior management will share the strategic plan
with employees. They will communicate to all employees how their engagement will help ensure
success in the execution of these strategies.

Culture
Organizational Culture is the commonly held attitudes, values, beliefs and behaviors of its
employees. The culture of an organization is as unique and diverse as an individual's personality.
If the employees of an organization believe that change is something to be feared and avoided,
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then change implementation is often reactive and haphazard. If the employees believe that all
change should be aggressively implemented "from above", then change is seldom supported.
However, if the employees of an organization believe that change is worthwhile and everyone's
responsibility; then change and growth occur with relative ease.

evaluating of the effectiveness of techniques used when developing

strategic business plans
Various kinds of planning tools can be used at each stage of the corporate strategic planning
process for gathering and interpreting required data and information. They may also be used in
structuring conversations involved in deliberating on the data, and generating options to address
issues surfaced. They also may used as aids in deciding strategies to address the most important
strategic issues likely to impact performance of the organization as a whole.

SWOT analysis
Businesses use SWOT analyses all the time. SWOT stands for Strengths, Weaknesses,
Opportunities and Threats its a proven way to identify internal and external factors that impact
business productivity and profitability. Careful determination and classification of a company's
strengths, weaknesses, opportunities, and threats provides an excellent way for a company to
analyze its current and future situation. It is not necessary for a company to take advantage of all
opportunities, nor is it necessary for a company to develop methods to deal with all threats.
Additionally, a company need not strengthen all of its weaknesses or be too smug about all its
strengths. All of these factors should be evaluated in the context of each other in order to provide
the company with the most useful planning information.

BOSTON CONSULTING GROUP MATRIX

A planning tool that uses graphical representations of a companys products and services in an
effort to help the company decide what it should keep, sell or invest more in. The BCG growth
share matrix plots a companys offerings in a four square matrix, with the y-axis representing
rate of market growth and the x-axis representing market share. The BCG growth share matrix
was developed by the Boston Consulting Group (BCG) in the 1970s.

PESTEL Analysis
A PESTEL analysis is a tool or framework for marketers. it can be use to analyze and screen the
external marketing environment of you company. The strategic management tool gauges the
macro environmental factors. The results make decision taking much easier. So, it is vital to
follow the PESTEL framework. The aim is to assess how exactly the factors influence business
performance.

SPACE Analysis
The SPACE matrix is a management tool used to analyze a company. It is used to determine
what type of a strategy a company should undertake. SPACE matrix is a strategic management
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tool that focuses on strategy formulation especially as related to the competitive position of an
organization. The SPACE matrix can be used as a basis for other analyses, such as the SWOT
analysis, BCG matrix model, industry analysis, or assessing strategic alternatives. SPACE
analysis framework is a very to develop and review a companys strategy. It can be used at the
beginning of the exercise to predict the overall key themes, As a check at the end of the process
It can also be used to evaluate individual strategic options generated by using a tool like the
Ansoff Growth Matrix.

Task 2
Formulating a new strategy
In order to formulate new strategies for an organization, a clear understanding of the micro and
macro environment of the organization is necessary. In order to get an idea about these two
environments, SWOT analysis and a PESTEL analysis can be used. Further, Michael Porters
five-force analysis is another tool that can be used to analyze an organizations macro
environment.

The organizational audit for Red Dragon Restaurant Group

As mentioned below a SWOT analysis can be used to analyze an organizations
microenvironment.
Strengths

Weaknesses

Operates four restaurants

no clear business strategy

Has total workforce of 45 employee

No specific role for employee

Company has grow over last 25 years

Company is stop growing

Unbroken profitability since company was

founded

Company is losing its customer due to

growing competitor

Opportunities
it has opportunities to expand its operations
in global market
Some traditional business seen level off

Threat

Competitor business are growing rapidly

Some competitor already own international
branches
Changing customer preference and tastes

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Environmental audit for Red Dragon Restaurant Group

An environmental audit gives an idea about the environment that one organization operates.
PESTEL factors include political, economical, social, technological, environmental and legal
factors.
political factors; the Red Dragon company operates within various political boundaries.
sometimes certain political boundaries will facilitate organizations like Red Dragon company and
sometimes some will not.
Economical factors; are crucial for an organization like Red Dragon group. Global economical
situations such as recessions and economical situations peculiar to countries such as exchange
rates are important when operate globally.
Social factors; Society changes from country to country, region to region and town to town.
Hence, Red Dragon company should take into various societal factors when it comes to its
promotional, communication, and even delivery services. The workforce should be trained in
ways to meet these different social factors. This makes it clear that social factors are important
for any organization.
Technological factors; are important for organizations like Red Dragon company, which depends
on communication and transportation. Newest inventions and innovations in communication and
transportation sectors can be exploited by the company to deliver its services to the customers in
the most effective way.
Environmental factors; are important in todays business world, since the focus is on
sustainable development. Therefore, as a globally responsible organization, Red Dragon company
should address various environmental factors that have an effect on its organizational survival.
Legal factors; vary from country to country. This makes it clear that an organization has to face
various legal systems that may affect the organization in different ways.
Hence, it is clear that a clear understanding about the macro environment of the organization is
important when it comes to all the aspects of the organization.

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Significance of stakeholder analysis

Stakeholders are important for any organization. Stakeholder can be defined as a party that
affects or can be affected by the actions of the business. Stakeholders can be government,
employees, customers, suppliers, creditors, community, trade unions, etc. Stakeholder includes a
whole array of parties, which are crucial for an organization. Hence, when new strategies are to
be developed for an organization, a clear understanding of its stakeholders is necessary. In order
to gain knowledge on an organizations stakeholders, a stakeholder analysis can be done.
Stakeholder analysis can be defined as a technique that can be used to identify and assess the
importance of key people, groups of people, or institutions that may significantly influence the
success of an organization. There are various reasons as to why an organization should conduct a
stakeholder analysis. They are;
To identify people, groups, and institutions that will influence the actions of the
organization
To anticipate the kind of influence, positive or negative, these groups will have on the
organization
To develop strategies to get the most effective support possible for the organization and
to reduce any obstacles for the successful operations of the organization.
Many scholars have pointed out the importance of doing a stakeholder analysis.
Advantages of doing a stakeholder analysis can be shown as follows:
The organization can use the opinions of the most powerful stakeholders to shape
the organization and its initiatives at an early stage. This ensures support as well
as quality the organization.
Gaining support from powerful stakeholders can help the organization to win
more resources
One can anticipate what people's reaction to the organizations actions

This makes it clear that a stakeholder analysis is important for an organization to operate
successfully.

strategy evaluation and selection

An organization should expand its business whenever possible. Various ways and methods can
be used to expand an organization. In this section of the assignment, possible methods for
expansion of Red Dragon Company are taken into discussion. Further, an appropriate future
strategy for Red Dragon company is proposed.

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Alternative strategies relating to substantive growth, limited growth or

retrenchment
the substantive growth; strategies are implemented through two main factors. Those are merger
and acquisition. Merger is the combination of two previously separate organizations, typically as
more or less equal partners. The Red Dragon Company has more potential to implement merger
as a substantive growth strategy because of its market strength. The acquisition involves one firm
taking over the ownership of another. This substantive strategy also can be implemented by The
Red Dragon Company since it has more market power in the industry.
joint venture as limited growth: At the joint venture, two or more organizations are shared the
ownership. In the joint venture, usually the competitive advantage is narrow. Since The Red
Dragon Company has more market share in the industry, it is not advisable for limited growth
strategy.
Retrenchment: is always a remedial action. These remedial actions are taken at the stage of the
inefficiency, economic recession, or strong competition. In case of inefficiency, the organization
has to take three retrenchment strategies namely assets reduction strategy, cost reduction strategy
and revenue generation strategy.

Appropriate future strategy for the Red Dragon Company

As Red Dragon is restaurant business the human resource is one of the critical resources, which
pave the way for achieving competitive advantage. However, Red Dragon Company has
identified that there is a need for further developing of strategy for its employees to compete in
the turbulent market place. Competitor business are growing rapidly and these skill
developments of employees will lead for quality service and finally it will hold to gain the
competitive advantage thorough available resources. The aim of the Red Dragon Company is to
make superior profit and clear strategy. Red Dragon Company has identified those areas as
strategy gaps of the organization.
Considering the above strategic situation, interactive strategies for the Red Dragon
Company is recommended. These interactive strategies will be the future strategic directions of
the Red Dragon Company. The rationale behind the interactive strategies is gaining the
competitive advantage by looking at the competitors strategies. In this connection, the Red
Dragon Company will have to pay their attention to interactive price and quality, strategies the
Red Dragon Company will have to provide best price and quality for their customers. The
interactive strategies in hyperactive- competition will say how Red Dragon Company can face to
the hyper-completion and gain competitive advantage. Collaboration between some
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organizations in the same market will lead to achieve competitive advantage. Cooperative
strategies will help this collaboration for Red Dragon Company.

Reference
How to Develop Strategy Mission, Vision & Values | On Strategy. [ONLINE] Available at:
http://onstrategyhq.com/resources/developing-your-strategy/.
The Basics of Strategic Planning, Strategic Management and Strategy Execution . 2015. [ONLINE]
Available at: http://balancedscorecard.org/Resources/Strategic-Planning-Basics.
Organizational Audit. 2015. Organizational Audit. [ONLINE] Available at:
http://www.theclci.com/products_organizational_audit.htm.
Environmental audit - Wikipedia, the free encyclopedia. [ONLINE] Available at:
http://en.wikipedia.org/wiki/Environmental_audit.
Business strategy textbook , BPP learning Media, first Indian edition,2009

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