Executive summary
Strategic planning involves the analysis of changes in the environment, formulating objectives of the organization. It also involves establishing activities to allocate resources. The strategic planning framework includes an organizing team of management, planning staff, and auditing the environment or situation. Brand names used by companies place them above their competitors in the global markets.
A unique brand name is very influential especially in expansion of businesses both locally and internationally. Focusing on strategies that put the organization in a competitive position is a key to success for all organizations. Organizations that employ strategic planning in their operations are ever in a better position to do or perform well.
It is easy for them to introduce new products to the market as well as to expand their business both locally and globally. Setting strong goals, vision and mission that direct them in achieving the set goals is critical for all organizations’ performance. Consequently the value statements are crucial in motivating the workforce and the organization at large.
Environmental scanning provides analyses of the internal and external environment. It involves owning and using information about occurrences within the environment. Environmental scan aids managers in making decisions regarding their company. In the internal environment, the scanning lingers the trends to be followed to make the internal operations a success.
It also determines how the trends should affect the work and the workforce. In the external environment, the scanning is done in the immediate, national and broad socioeconomic environment. It can be also done on the macro environment. In cases of economic recession, companies should implement plans to stay in the market. In such a scenario, it is also preferable that they seek new markets for their products.
Setting strong objectives is very critical in implementing plans. Companies should employ functional tactics to ensure good performance. The tactics include the adoption of lean administration concept and proper market segmentation. In this case, they are instrumental in ensuring effective management of resources, product design, and development of new business units.
Success factors for implementation are essential elements that aid execution of tasks. They ensure that key activities within the implementation process are executed with limited complications. Action plans are critical to strategic planning. They break strategic plans into noticeable steps. Each step is given to performers, and it is suggested when each step should be accomplished.
With the implementation plan, a timeline for implementation is determined, service providers are trained and educated, their roles and responsibilities are defined, written protocols for referrals are developed, as well as policies and procedures. The company has an obligation to implement key action items that hold the ability of sustaining its performance capacity.
Managers in any institution should adopt effective techniques of resource management and allocation as these are key drivers for strategic planning. Risk management plans are important for companies when they are faced with severe risks that are caused by hostile environmental conditions.
A reliable and effective management plan is vital for an organization to overcome workplace resistance at a time when changes or adjustments take place. Change of a management strategy helps in presenting a new way of doing business. In this context, the analysis is focused on how Tiffany & Co has developed and implemented a strategic plan. Companies must design key tasks and operating guidelines promptly to facilitate the implementing of the strategic controls and contingency plans.
Organization background
The company was founded in 1837 by Charles Lewis Tiffany and John F. Young. They opened a store in New York that was intended to sell stationery and costume jewelry. In 1845, the store began dealing with high-quality silver pieces which remained as its specialty. Later in 1853, the company was named for what it is now Tiffany & Co.
Over the years, the company was strategically tied to the political leadership in the country, which contributed to its immense growth and success. After a fall in profits during the Great Economic Depression, the new management changed tact by getting rid of goods it deemed unworthy. They cleared goods such as diamond rings for men, leather goods, silver plates, and antiques (Haines, 2010).
The products were of high quality but of a lower price. The change of tact was immensely successful stretching to 1978 when it was sold to Avon products Inc, a world leading manufacturer of cosmetics. Later in 1984, the company was sold again. The new management embarked on regaining the high image.
Tiffany & Co became a public corporation in 1987. That strategy helped the management to introduce new products, which included fragrances, silk scarves, handbags, and briefcases among others. They also opened new stores in London, Zurich and Munich. Tiffany & Co continue to enjoy a strong brand name and customer loyalty, which accounts for its large growth and strength even facing an economic downturn (Haines, 2010). Currently, the company has a strong brand name, and is famous all over the world for its luxury goods.
Organization’s mission
The company’s mission is to provide quality rings, bracelets and other luxury brand items that are associated with romance, quality and style.
Vision
The organization is a symbol of American design with the theme of Love, Beauty, Romance and Dream.
Value statements
They believe that jewelry from their company cannot expire and be discarded.
Environmental scans
The analysis of both internal and external environments is developed through environmental scanning. While being conducted, the scanners in Tiffany & Co identifies the important trends inside and outside the company. The human resource department determines how they want those trends to affect the work and the workforce.
The department also describes the expected gaps between what is most likely to happen in the future and what is ideally to happen (New York (State) 1991).
Review of the best strategies from Week Four and a recommendation to the organization
Tiffany & Co may also adapt generic strategies to achieve maximum growth. These strategies include: differentiation, low-cost leadership. They should also focus on their cost or differentiation strategies (Pearce & Robinson 2006). With the threat of fake products and imitations, Tiffany & Co should adopt the strategy of differentiation. It must be such a recognizable brand that no imitator can pose any challenge.
In 2005, research shows that 90% of the items sold under Tiffany & Co label on eBay were counterfeit (Damassa, Hyder and Wilcox 2007). It is prudent to boost efforts to strengthen product name and authenticity. Another generic strategy could be low-cost leadership.
The company should consider opening stores that deal exclusively with affordable, but high quality items. To avoid confusion and loss, the company may open stores under a different name. The company may also consider the focus strategy, which is the most suitable for Tiffany & Co. It is better to focus on a narrow market and serve it perfectly than to target the broad market (Botten and McManus, 1999).
However, this strategy has its own disadvantages. In addition, the target audience may no longer be different from the rest of the market during hard economic times.
Implementation plan
The witnessed economic recession and diminishing prioritization of jewelry items by customers is threatening to impede the company’s performance. The strategic issues are set to facilitate its growth both in established and emerging markets. Firstly, the company has strategies for expanding its market by venturing into new markets such as India. The company also has strategies on how to mitigate the possible risks that the economic complications may present.
Objectives
- To identify potential change management strategies that would enhance successful implementation of contingency plans.
- To identify key success factors for implementation and functional tactics.
- To provide credible information relating to budget, action items and forecasted financial prospects.
- To provide reliable information pertaining to risk management plan and key success factors in the implementation process.
Functional tactics for change management
Functional tactics are operating guidelines and production systems that aid performance in institutions. They are also strategic measures and plan of activities that facilitate execution of duties (Barney, 2007). Imperatively, Tiffany Corporation should adopt new tactical approaches to production, sales, marketing, and distribution of products.
This will lead to realization of its contingency plans. In this case, they are instrumental in ensuring effective management of resources, product design and development of new business units.
Action items, milestones and a deadline
As noted, the company has an obligation to implement key action items that hold the ability of sustaining its performance capacity. The action items would ensure that the company is operated under conventional management techniques (Barney, 2007). They will also facilitate the implementation of the strategic plans.
Its major plans and strategic missions are being executed within specified timelines (Pearce & Robinson, 2011). This shows that current tasks will receive appropriate implementation. The strategic plans will be executed within the set timelines and the company’s capacity in terms of resources.
Tasks and task ownership
The management of Tiffany & Co should design key tasks and operating guidelines promptly to facilitate the implementing of the strategic controls and contingency plans (Mintzberg, Ghoshal, Lampel & Quinn, 2003). This is essential in ensuring elimination of wastages that will enable the company to maximize its resources. The main tasks that are vital in ensuring complete actualization of the strategic plans include:
Resource allocation
Managers in any institution must adopt effective techniques of resource management and allocation. This is vital since resources such as money and infrastructure are key drivers of any strategic plan. Therefore, managers in Tiffany & Co are obligated to develop a viable work plan. They also have to develop a budget on how the expansion process will be executed (Pearce & Robinson, 2011). The work plan should be arranged in order of priority.
Key success factors for implementation
Success factors for implementation are essential elements that aid execution of tasks. They ensure that key activities within the implementation process are executed with limited complications. Barney (2007) noted that, key success factors that managers should adopt are an effective performance and feasibility of the tasks, favorable allocations of resources and designing of activities in the order of priority.
Innovation, acquisition of quality raw materials, development of strong brands and effective marketing also form key success factors. The factors would enable Tiffany & Co to implement its strategic plans and achieve best results.
Budget and forecasted financial prospects, including a break-even chart
The Tiffany & Co’s budget that covers the cost of implementing its strategic plans and projected return on investment is provided below. As noted, the cost of implementation of the plans is lower than the projected revenue by $ 600,000. This shows that the company would break even effectively.
Risk management plan, including contingency plans for the identified risks
Superior risk management is one of the main strategic plans that Tiffany & Co seeks to implement. In this case, the company is facing severe risks that are caused by hostile environmental conditions. The risks that seek to impede its profitability, expansion plans include diminishing of raw materials that threaten to affect the quality of its products, and price variations that seek to dampen customer loyalty.
These risk factors have forced the company’s top management to embark on high-powered deliberations. The deliberations are to institute proper contingency plans to counter the risks as they occur. These contingency measures include identification of new sources of raw materials, alternative materials, and adoption of low switching costs for consumers.
Other contingency measures include the introduction of new brands, saving money in a reserve account and continuous innovation. These plans would help in cushioning the company from recording dismal performance in both worst- and best-case scenarios if implemented appropriately.
Change management strategies that would enhance successful implementation
Tiffany & Co should adopt conventional techniques of change management. This is crucial in facilitating holistic implementation of its strategic and contingency plans. Particularly, the company should advance its technological set ups, execute on-line sales, marketing, embrace innovation and develop favorable guidelines to aid resource allocation.
Development of effective communication systems, acquisition of high quality raw materials, research and development of effective pricing strategies are also essential elements that facilitate change management. These elements hold the capacity of ensuring that the company that has a strategic plan of expanding its network and eradication of pricing risks achieve its targets.
References
Barney, J. B. (2007). Gaining and Sustaining Competitive Advantage. Upper Saddle River, NJ: Pearson: Prentice Hall.
Botten, N. & McManus, J. (1999). Competitive strategies for service organizations. West Lafayette, Ind: Ichor Business Books.
Damassa, S., Hyder, Z. & Wilcox, J. (2007). Strategic Report for Tiffany & Company. Web.
Haines, R. (2010). Vintage wristwatches. Iola, WI: Krause.
Mintzberg, H., Ghoshal, S., Lampel, J., & Quinn, J. B. (2003). The Strategy Process: Concepts, Contexts, Cases. Upper Saddle River, NJ: Prentice Hall.
New York (State). (1991). Environmental scan: Health care policy trends and strategic issues. Albany, N.Y.?: The Board.
Pearce, J. A., & Robinson, R. B. (2011). Strategic Management: Formulation, implementation, and control. Boston, MA: McGraw-Hill/Irwin.