The Strategy Audit was the central assignment of the Diploma in Management qualification from the Irish Management Institute, and the final diploma required for the Master's in Business Practice qualification.
This assignment called for a full audit of a company's, in this case Brandon Global IT, practices in terms of business strategy, marketing, organizational behaviour, finance, strategic human resource management and organizational communications.
This section formed the foundations of the document and feeds into every section that comes after. It is broken into three key elements.
The first step involved looking at the current external and internal situation of the business. External analysis was performed using PEST analysis, Porter's 5 Industry Forces and strategic group mapping. Internal analysis involved looking at the resources and capabilities of the business through the VRIO framework. Finally, a SWOT analysis summarised the key findings.
From there, the next step involves formulating a number of different strategic options. This approach means that all characteristics of the situation are considered, minimising the bias of any pre-conceived notions.
Strategic options were developed using Porter's Generic Strategies model, the Ansoff matrix, incorporating Porter's Value Chain and Blue Ocean Strategy. Three potential options were developed and from this a strategy was chosen.
In this section the new strategic vision is set out and the 8 components of strategic execution are considered (Thompson et al 2008).
A balanced scorecard is used to articulate the objectives of the new strategy, including KPIs (Key Performance Indicators) and targets. Also discussed at this stage are the likely challenges this strategy will face.
Building upon the strategy analysis, this section focuses on how the business discovers, creates, captures and sustains value for customers in terms of the Harvard Business School framework (Dolan 1997).
The 5 C's of the marketing environment are Customers, Company, Competitors, Collaborators and Context. While competitors have likely been outlined in detail in the strategy section, this is a good section to delve deeper into customer analysis, in terms of the decision making unit, and the company in terms of marketing organization, systems and productivity.
Again, the balanced scorecard is used here specifically in a marketing context. This helps to focus marketing strategy on marketing objectives, that feed into the overall business strategy.
Segmentation, targeting and positioning (STP) strategy is outlined at this stage. First the overall market is segmented into logical groups, based on factors such as industry, company size, requirements, location etc. Then the most favourable segments are chosen as the target market(s) for the company. Depending on the targets selected, one or more value propositions are developed in order to position the businesses offerings for the market, taken into account the value offered by competitors.
A perceptual map can be used to compare the company with various competitors in the market on the key characteristics in the industry. This helps to visualize where the business needs to move to in the market to improve their competitive positioning. This section is tightly connected with the section strategy.
The marketing mix for a B2B services company can be analysed in terms of the extended 7 P's. It's worth noting that the the first six concern how value is created while the seventh, price, deals with how that value is captured.
- Product (/Service)
- Physical Evidence
Customer Relationship Management
After discovering, creating and capturing value through marketing strategy, the key activity becomes sustaining that value to maximise the customer lifetime value (CLV). This shouldn't be overlooked as the cost of acquiring a new customer is often many times the cost of satisfying existing accounts.
Customer loyalty can be thought of in terms of the 'Loyalty Ladder' where clients are systematically moved up each rung of the ladder until they are willing to partner with, or advocate on behalf of the business. The Loyalty Loop construct shows how it is important to avoid having clients reconsider their supplier, instead setting them on a loop of service and satisfaction.
Moving on to organizational behaviour, and specifically how the culture of the business and teamwork between different functions and levels enables or hinders business objectives.
To analyse culture, I used the Organisational Culture Assessment Tool (OCAI) (Cameron & Quinn 1999) to identify the current and preferred cultures in the company.
This section sought to identify which of Belbin's (1981) team roles were missing from the sales team. In doing so it was possible to relate the team's strengths to individual members, and find the skill gaps that could be filled through future hires.
A review of the financial performance of the business was undertaken to ensure the financial situation was congruent with strategic priorities. This review was broken into a number of subheadings:
- Revenue Structure
- Corporate Structure
- Cash Flow
- Environmental Factors
The Harvard Framework of HRM (Beer et al 1984) underpinned my analysis of the HR function in Brandon. This section was heavily linked with the Organizational Behaviour section, and builds uon the conclusion and recommendations from there.
HR Planning & Staff Flow
Bramham's (1994) HR Planning Model was used to analyse current resourcing requirements in the organization and plan for future needs. Following this the HC BRidge Framework (Boudreau and Ramstad 2007) helped to tie strategy to HRM.
Levels of engagement in the business were analysed using the Employee Engagement Value Chain (Macy et al 2009) and tactics set out in order to drive greater engagement.
Practical Communications Strategy
As the new and improved strategy had been set out for all facets of the business, the final step was to implement a practical communications strategy to communicate the new direction to all personnel. This included objectives, channels, messaging and challenges.
Conclusion & Recommendations
The strategy audit culminated in three recommendations and personal reflection on the audit process. Each of these recommendations were borne out of the research carried out across the business and so had mutual benefits for each function.
Finally the practice of reflective writing is promoted in the IMI and a reflection is included at the end of the audit.