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Title: Strategic planning: Roadmap to best-in-class MES solution
Assignment topic
You are required to perform strategic planning for your organisation or one you are
familiar with in your country or region and:
You do not need to develop implementation processes. But you should mention the
critical importance of implementation, execution and evaluation of the strategies you
come up with for this assignment.
Executive summary
This paper outlines the strategic planning roadmap for WWA in restructuring its
current business model, taking advantage of its existing internal resource and
capability, thereby positioning WWA to be the best-in-class in MES project
implementations. Prior to this a concise market force analysis is drafted using proven
strategic management tools and methodology.
Strategies are then crafted and selected to place WWA in a competitive advantage
against business rivals in the same market segment. Implementation, evaluation and
control are glanced briefly highlighting issues to consider in sustaining and meeting
WWA’s business objectives.
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Table of contents
1 Introduction ............................................................................................................ 6
6 Strategic crafting................................................................................................... 17
References .................................................................................................................... 20
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Index of figures
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1 Introduction
In recent years, the market demand for MES solution has escalated in Australia
(source: http://www.frost.com, 12/3/2014). Riding this growing wave is MES project
implementations, predominantly carried out by system integrators (SI). WWA has
identified this lucrative revenue from MES projects and has initiated a strategic plan
to endeavour opportunities through reorganisation of its business model (Cravens,
Piercy & Baldauf 2009) thus, gaining new customers and market segments (Kanti
2012). This paper has been put together to elucidate this plan.
This paper has seven main sections. First, the guiding cornerstones for WWA will be
defined followed by a scan of the market landscape that includes an internal and
external assessment. Outcomes of these assessments will be strategically synthesised
using the SWOT-TOWS analysis. The strategic crafting will then be discussed
followed succinctly by implementation, execution and evaluation considerations.
2 Guiding cornerstones
WWA
‘WWA was formed as a new entity to service WW in the Australian market, continuing
a relationship established more than 15 years ago. As your local WW presence, we
are here to deliver to you the best experience when you are in need of advice for the
best product selection, certified training, technical support and consulting services’.
(Source: http://www.wonderware.com.au/)
2.3 Vision
A company needs a direction, where it wants to take the business to survive, what
markets to serve and products and/or service to develop and offer to the target
customer (Box 2011). Due to a lack of vision statement currently at WWA, the
following is suggested:
‘Making Australia the number one manufacturing hub in the world with our solution’
The vision above emphasises our drive to make our target customer, Australia,
predominantly in the manufacturing, the top destination with our innovative product
and services. This is in line with becoming customer centric as postulated by
(Cravens, Piercy & Baldauf 2009).
2.4 Values
It's not hard to make decisions when you know what your values are – Roy Disney.
Values are an emotional creed, which provided a sense of belonging towards the
company, mission and vision (Williams 2008). Following are five core values
proposed for WWA. The prefix of each statement with a ‘first-person-plural pronoun
is intended, as it instils a sense of group affiliation with the audience (Williams 2008)
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We will exceed customer satisfaction, while empowering their operational
excellence.
Note that last two values are customer centric. This is intended as the company must
also consider the value proposition of the customer (Box 2011) to provide their
importance to the company.
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Banham (2010) identified that tools and models bring clarity to complex issues, by
providing a useful roadmap for enabling planning, implementation and tracking. The
following roadmap is defined for WWA, referring to Figure 2.
(SWOT &
Opportunity & Threats (OT) Strength & Weakness (SW)
TOWS)
Five competitive
Vertical integration Strategic alliance
strategy
Implement
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3 External environment analysis
Let us begin with the external environment, as we can better anticipate and plan for
any business impact (Banham 2010).The business is constantly bombarded with
changed from the environment in a very broad context (Cravens, Piercy & Baldauf
2009) and we will look at this in detail in the next sections.
Australia’s political landscape has seen the changes to the carbon tax policies,
affecting the economic climate by increasing the cost of manufacturing, perpetuating
to the exodus of the car industry and high unemployment. These sociocultural
changes have prompted the government to shift focus to other manufacturing sectors
such as F&B. More attention has been given enhance the technological breakthrough
in optimising F&B manufacturing thru automation due to environmental factors such
as draught whist is arguable caused by green-house effects bringing us back to where
we started i.e. reducing the carbon footprint, thru the means of legal and regulatory
policies mandated by the government.
Thus, we can conclude that these macro environmental factors favour WWA
investment into the F&B beverage industry, whilst increasing food integrity and
safety, along with reducing operating cost. These are opportunities along with threats
identified in Table 3. However, changes in the government have seen the relaxation
of the carbon tax and this impact would need to be continuously re-evaluated.
Ormanidhi & Stringa (2008) have mention that this model’s popularity, well-defined
structure, feasibility, clarity, simplicity, generality lends itself to be an ideal tool to
analyse a company’s competitive advantage and strategy. Ormanidhi & Stringa (2008)
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also mentions how the model is complementarity to other approaches, one of which is
Resource-Based Perspective, which we will cover later.
WWA focus will be on industry rivals who are involved in the F&B area and this will
be covered in the next section as it has the most strongest downwards pressure. New
entrants and substitutes pose some weak threats and do not contribute to any major
downward pressure in the near future as the MES product is an integrated system not
easily replaced.
The next forces are the suppliers and buyers. WWA, being a distributer and a major
customer of the Invensys Group, experiences weak supplier bargaining power. The
buyers are the manufacturing industries, business buyers that inherently have weak
bargaining power. The cost of switching is also expensive, so this would deter new
entrants and substitution.
Based on the data compiled by Gartner in Figure 3, we can posit four key rivals in the
global market across various industries. Focusing on the F&B industry, Invensys,
represented by WWA, Siemens, Rockwell Automation (RA) and GE Intelligent
Platform (GEIP) are identified. These vendors are all scrambling for market share as
MES is in the starting growth phase as depicted by Figure 4.
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3.4 Key success factors
The following have been identified and compared to the key rivals to create a
competitive strength assessment in Table 2 for analysis (Weihrich 1982). We can
access WWA’s dominance here from the total score below.
4.1 VRIN
Box (2011, p.116) stated that ‘Core competencies that lead to significant competitive
advantage are valuable, rare, difficult to imitate and essentially non substitutable’
Empirical analysis (Talaja, 2012) has also shown that companies achieve higher levels
of sustainable competitive advantage and performance owning valuable and rare
resources.
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WWA has a strong staff technical capability, whereby engineers are able to multitask
on the core business. This is both rare and valuable in other industries, where
engineers focus is in only one area. WWA enjoys a large install base and history in
Australia, refer Figure 5 below.
Source: http://www.techvalidate.com
Figure 5 – WW is everywhere
WW is a leader in the industry, being the first to embrace Microsoft technology while
the rest was catching up (http://www.controldesign.com , 2005). WW provides value
to customers allowing operational excellence (http://www.processonline.com.au,
2012). These traits of value and rareness provide WWA with a competitive advantage
(Talaja 2012). These traits also make WWA inimitable and non-substitutable thus
giving it a sustainable advantage (Talaja 2012). For example, WWA high penetration
and long-time relationship with the customer gives it the advantage as the cost of
switching can be high. The integrated nature of the product into the manufacturing
system requires retraining, testing and new technical support infrastructure if
substituted.
Finally (Talaja 2012) has concluded that the VRIN framework supports the
importance of these resources, thus supporting the strategic management concepts to
allow companies to compete in different markets. This paper agrees with the
hypothesis.
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4.2 Value chain
Value chain management ensures that the value provided is in line with building a
long term sustainable relationship with the customer (Kanti 2012). WWA value chain
is captured in Figure 6.
Project
Management
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4.3 Strength and weakness
Assessment from the previous internal environment is tabulated in Table 4 below
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Internal Strength: Internal Weakness
1. Diversified product offering 1. Small workforce
2. Multi-disciplined workforce 2. limited sales & marketing
3. Regional presence 3. New to Project implementation
Noted observation from Table 6, weakness of small workforce with threat of low cost
providers can be offset with Lean management philosophy (Box 2011) as well as
focusing on short project lifecycle using ‘off-the-shelf’ software. Thus providing a
competitive advantage in terms of time dimension (Box 2011)
New Business model has been formulated (Cravens, Piercy & Baldauf 2009) to
combat the changing market landscape emphasising on project management, here
cross-referencing ST2 to SO1 in Table 6. Relationship and hence added strategy can
be identified, for example between SO3 and WT1. To elaborate, refer to the following
excerpt from ARC insight, which correlates to Lean philosophy (Box 2011), figure 7.
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6 Strategic crafting
WWA has the advantage of speed due to its size and capability. Time dimension
(Box 2011), in which speed of performing an operation has a competitive advantage is
supported with processes that WWA possess in other words, templates of project
management methodology and technical documentations that can be reused. In
addition to small multidisciplinary project team and WW software that is out-of-the
box. The software and the team structure also allow tasks within the projects to be
carried out in parallel. All these increases speed of execution
SME’s, which is the category WWA falls into, should always be focused on
differentiation (Box 2011) due to the limited staff resources compared to large
organisation. WWA differentiates itself with its product strength and an understanding
of how to fulfil the need, wants and desire of the customer (Box 2011) as evident in
Figure 8. Hence, supporting both (Ormanidhi & Stringa 2008) and (Box 2011)
opinions.
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Source: http://www.techvalidate.com
Figure 8 – WW customer value proposition
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Source: http://www.techvalidate.com
Figure 9 – Microsoft WW Alliance
WWA
PROJECT
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8 Conclusion and recommendations
From the analysis conducted and taking into consideration, the external and internal
environmental forces and the tools utilised within this framework, we have identified
some key strengths of WWA that can be capitalised to exploit opportunities and
deflect threats in a dynamic market, thus positioning WWA in a sustainable
competitive advantage against business rivals.
It is recommended that WWA uses all the experience gained from its core business to
funnel into MES projects, which would span the entire customer value chain from
inbound warehouse to process to packaging and to outbound warehouse. WWA is
then able to provide a comprehensive packaged solution differentiated from other
vendors. Venturing into projects is also bi-directional to the business as more of the
core business offerings will be required by the customer. Finally, alliances with SI
would ensure additional engineers are available to support the project.
References
Banham, HC 2010, 'External Environmental Analysis for Small and Medium
Enterprises (SMEs)', Journal of Business & Economics Research, 8, 10, pp. 19-26
Burt, G, Wright, G, Bradfield, R, Cairns, G, & Van der Heijden, K 2006, 'The Role of
Scenario Planning in Exploring the Environment in View of the Limitations of PEST
and Its Derivatives', International Studies of Management & Organization, 36, 3, pp.
50-76
Grundy, T 2006, 'Rethinking and reinventing Michael Porter's five forces model',
Strategic Change, 15, 5, pp. 213-229
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Kale, P, & Singh, H 2009, 'Managing Strategic Alliances: What Do We Know Now,
and Where Do We Go From Here?’ Academy of Management Perspectives, 3, 3, pp.
45-62
Kanti, T 2012, 'Market Segmentation and Customer Focus Strategies and Their
Contribution towards Effective Value Chain Management', International Journal of
Marketing Studies, 4, 3, pp. 113-121
Weihrich, H 1982, 'The TOWS Matrix -- A Tool for Situational Analysis', Long
Range Planning, 15, 2, pp. 54-66, Business Source Complete, EBSCOhost, viewed 11
August 2014, http://www.usfca.edu/fac_staff/weihrichh/docs/tows.pdf
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