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ASSIGNMENT COVER SHEET

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Student ID number: Student name: Course name: Subject name: Subject facilitator: No. of pages: Word count:

A 12428 Magalie Terry DISTANT LEARNING MBA STRATEGIC MANAGEMENT

10 1551
DECLARATION

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ASSESSMENT SHEET
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Student name: Course name: Subject name: Assessor/marker:

Magalie Terry MBA Strategic Management

COMMENTS
Principles used (for example, number and understanding of concepts referred to, their influence on the structure of this paper, number and correct citations of references, use of appropriate jargon)

/4
Application of those principles, that is, the analysis and evaluation of the example problem based on the principles, including the final recommendations and their justification

/8
How well the example problem was described, including the extent and depth of information (including the data) about it that was accessed

/4
Structure and presentation

/2
Style, grammar and language

/2 Total Less penalties GRAND TOTAL General comments

/20

FOR MODERATORS USE ONLY I agree with the assessors assessment I disagree with the assessors assessment and the new mark is as follows for the following reasons:

/20

Moderator:

Title: Strategic planning. Assignment Topic: Develop a mission statement of values and explain their appropriateness Undertake an internal analysis of the organisation and an analysis of its external environment using several appropriate tools like an industry five forces analysis Craft strategies and explain their appropriateness.

Executive Summary : The Strategic Planning of a laser distributor. The difficulties it faces vis a vis subsidiaries and the elaborate market in which it competes at different levels in a very diversified market. Yet it is possible to use the appropriate tools to craft a strategy and show how different market have different issues

Introduction: The existing company does not have a mission statement per say or a vision statement but it does have some core values and goes by an Ethos that best describes the company. The mission statement shows the stakeholders and the shareholders what XLASER (Fictitious Name) does best and why they want to do it. It is focused brief and easy to remember. The vision statement is to show how passionate this distributor is and both the statement encapsulate the core values of the company. MISSION STATEMENT- VISION STATEMENT- CORE VALUE STATEMENT: Mission Statement: Our aim is to share our clinical, technical and marketing expertise with all our partners in the aesthetic industry by providing you with the most innovative Lasers/IPL platforms for the optimal results in the most the most ethical way. We believe that in growing our market share by 10% every year we will encourage our suppliers to stay at the forefront in delivering the best product to your clinic and your patients. Vision Statement: We are passionate in helping the aesthetic clinics create the New You for their clients and in doing so we empower our people to deliver our ethos Products you know from people you trust for a many years to come. Value Statement: Innovation: Encourage creativity among our people who in turn will share it with our customers. Excellence: We are committed at every level of our value chain in delivering the best Technical, Clinical Support. Training & after sales service are our expertise. We consider the doctor and patients first. Integrity: Follow & adhere to our ISO standards TGA recommendations and act in a fair and ethical fashion. Respect: We recognise that we are all different and important to each other both within the company and with our customers. Let us join forces to unite our strengths.

SWOT ANALYSIS AESTHETIC MARKET STRENGHTS Unique Quality products from renowned suppliers Small enough to adapt to changes Strong clinical expertise Well-resourced clinical data Directors well respected (12 years in the industry) Evidence Based devices in product portfolio Medium size overheads Good Technical support (three Engineers) Differentiation in Technology-Clinical support & technical Support as well as providing ROI to every buyer and help with marketing material. Marketing material for support already available Incredible profit margins do not need to sell a great quantity. OPPORTUNITIES Wider portfolio than competitors Strength of the Australian dollar / better pricing Impulse purchase (one decision maker) Quick buying cycles/fast moving and competitive industry Substitute will complement not so much compete High demand for these procedures High ROI. WEAKNESSES Immature sales team with few skill sets Difficult to focus due to wide product range Weak market presence due to no great products for a few years. No clear strategic direction Lack of follow-up post sales meetings Poor market intelligence feedback Sales Presence in New Zealand rare? No service person in Vic or Qld Directors lack of presence in market Too many products / lack of focus Retainer too high which does not encourage striving for performance No real culture in the organisation High Transfer price from suppliers and no real negotiating powers No KOL programme

THREATS Lack of government incentives/TGA ruling Hard to maintain market share / marketing efforts Lack of market intelligence i.e. installed base of competitors New Substitute Natural Disasters such as Earthquake in NZ Potential New Entrants with second-hand market and cheap imports are on the increase

EXTERNAL ENVIRONMENT: XLASER has been affected by all the above forces and stands to be threatened in the future. Demographics: 35 -65 years captive audience for laser treatment as the Australian population is ageing the end users may decrease. Social: Invasive/Non-Invasive enhancement may not always be favoured. Doctors concerned about beautician entering the market with lower cost offering. Political, Legal and Regulatory Affairs: There is a strong push to bring in legislation to regulate the industry. Also the TGA has relaxed the requirements for listing of aesthetic lasers encouraging lower standards to cut prices. Banks are more reluctant to loan such high risk investments...

Natural Environment: Natural disasters such as Christchurch Earthquake market not yet recovered - Insurances for laser procedures are on the rise. Technological Factors: Fast pace industry for technology early adopters give a very short window to operate. Global Forces: While XLASER only exports to New Zealand still affected by exchange rate. General Economic Conditions: Fortunately GFC or any financial downturn has a positive response from the market they feel down and want to look better. COMPETITIVE ENVIRONMENT: Using Porters Five Forces Analysis: The industry has Four Strategic Groups: 1. Skincare/Dermabraision: Costly to end- user but good ROI for the clinic.

2. Injectables: Again costly to the end-user but good ROI with little outlay to the clinic. 3. Non-Invasive Laser/IPLInterventions: Any age multiple use - longer term results costly to the end user short term but not long term and large initial capital investment for the clinic 4. Invasive Laser/IPL Interventions: Any age multiple use - longer term results costly to the end user short term but not long term and large initial capital investment for the clinic. XLASER occupies the two last categories. While these technologies are in the higher price bracket they are competitively valuable as they are unique, there are no such innovative products among our rivals and they are difficult to copy because they have unique features and hold strong patents. No substitute can replace the treatments they provide. XLASER also offers a unique 3D Quantitative imaging system as part of the package to complement our core value Doctors and Patients first. However XLASERS had not performed well in the last three years prior to one of the bigger supplier coming on board early last year. The primary stakeholders who are the doctors and the Buyers dont have a lot of experience with the company as they had old technology prior and in some ways have had a poor image in the industry.

The secondary stakeholders and indirectly also the Buyers are the end users; they have little to no say in what their doctor use. One company such as FRX is a one product company and has resorted to extensive advertising to the end users which has made the product become a household name and has therefore increase their market share tremendously. Suppliers: XLASER does not have a great bargaining power with its biggest supplier as it is a new partnership and has not yet been successful enough. Prices are set. New Entrants are a threat and will mostly be (1) cheap copies from Asia with little to no clinical support (2) The second hand /refurbished market supplied by E-med, where cost has eroded the ethics of good training and reliability. At this stage XLASER sits in the very left corner of the Strategic Group Map and the Goal is to move it towards the middle top quadrant. The reason for its lack of performance is mostly due to a non-experience sales force.

Strategic Group Map


XLAS FR ERRR XL INJECTABLE FILLERS DC CAND COST & QUALITY BOTOX INJECTABLES PAL
HL

SKINCARE/ DERMABRAISIO NS CUT


QMED

Adapted from Crafting & Executing Strategy Thompson/Peteraf/Gamble/Strickland

MARKET SHARE
ROUND SHAPE = Subsidiaries OVAL SHAPES = Distributors SQUARE SHAPES = Substitutes

CRAFTING THE STRATEGIES: We need exposure and a KOL programme short term so I would propose: Blue Ocean Strategy with an Alliance Differentiation: We have many unique products so differentiation is our biggest advantage, however we really need to have the exposure to rebuild our image and showcase what we can offer, hence the following strategy to help this happen Alliance: With the Fillers/Botox group. Non contractual people to people at a territory level, synergistic effect to benefit both by using the imaging system in a quantitative way: (1) The injectable company benefits as a sales tool to sell more when they demo. (2) The doctor uses it to sell more procedures. (3) XLASER increases its exposure by using the existing network that the injectable representative has. Increase presence This would also be repeated at conferences with an added non competitor contender An interior decorating company that enjoys a solid presence in this industry. What will this do? (1) Increase Air Time spent for the inexperienced reps. (2) Unique value proposition with a vertical Integration for the doctors. One stop shop (3) Build up our image with follow-up visits accompanied by upper management (4) This would reduce the avenues for the rivals less air time. (5) Pooling resources means less cost and attending more conferences. Will the competitors retaliate? Sure but will lag by a year due to booking system at conferences and they may need other ideas for Alliances. To measure this implementation the sales representative will need to show follow-up call rates and enter the leads on the ERP of the company. This I am sure will give us our 10% increase

by asking each representative to sell 1 system after each on the conferences. To be or not to be a first mover?

References (1) Charting your companys future Harvard Business Review 80 No.6 June 2002 (2) Michael E Porter How competitive Forces shape Strategy Harvard Business Review 57, no2 (March April 1979 (3) Barney J.B.(1991) Journal of Management 17 (1) 99-120 (4) Chi. T. (1994) Trading in Strategic Resources Strategic Management Journal 15, 271290 (5) Coopers and Lybrand (1997) Strategic Alliances Coopers and Lybrand Barometer Spring. (6) http//:www.allianceanalyst.com (11th November)

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