Strategic Analysis

Strategic analysis generally involves evaluation of the strengths and weaknesses of a company’s place in the market ranking. There are several tools and techniques used as the basis for strategic analysis of a given industry. Out of all, strategic factor analysis strategy is considered to be one of the most frequently used techniques for the reason that not only does it centre on internal strengths and weaknesses but also on the external background the company in conducting its business in. After the company has laid out its objectives, it is always necessary for the company to embark on, with its present state of affairs, formulating a strategic plan to achieve the set objectives. However, alterations in the external surroundings frequently create new opportunities and new approaches of attaining these objectives. An environmental scrutiny is thus conducted to establish the presented opportunities. Safeway must therefore identify its capabilities and inadequacies so as to pick the opportunities that it can chase with a higher possibility of accomplishment. The situation analysis thus entails an analysis of both the external and internal surroundings (Safeway Inc, 2003).

Internal Factors Analysis of the Safeway Inc can be summarised in the table below.

The internal analysis reflects on the state of affairs within the company itself.

External Factors Analysis of the Safeway Inc

The external atmosphere generally has two features. These features include macro-environment that influences each and every one company and a micro-environment that influences only those companies in a specific industry. The macro-environmental analysis incorporates political, economic, social, and technical aspects. These are summarized in the table below.

 Strategic Factor Analysis Summary

Strategic factor analysis strategy investigates 5 features of an industry to establish the position of the company and what is necessary to be done to advance this position. Therefore these features include the company’s product or services, intensity of rivalry in the marketplace, easiness or obscurity of market entry, development and profit prospective and the general atmosphere of conducting business. Thus investigating and analyzing each and every one of these factors is essential for developing strengths into competitive benefits over rivalry and advancing some weaknesses that hamper a company’s competence and expansion. Companies should therefore constitute their marketing approaches to compliment the highest rated groups in the market. A situation analysis can produce a huge amount of information, much of which might not be particularly applicable to strategy formulation. Therefore, to make the information more convenient, it is normally useful to classify the internal strategic factors of the company as strengths and weaknesses, and the external environmental strategic factors as opportunities and threats (Davis & Sisson).

Strategic Alternatives and Recommended Strategy

Safeway should immediately commence encouraging its merge to formulate name acknowledgment strength for the business. For example, it has been profitable by increasing its worth that shareholders obtained for their shares compared to non-members in industry who had not invested in Safeway Inc. Liquidity Ratios, normally known as Inventory to net working capital, has marginally increased over the years. This is an evaluation of how much Safeway’s resources are strapped in inventory. Safeway, along with the major players in the industry, has every one of these economical advantages. For the past few years, their ratio rose by a bigger margin compared to the previous years (Begu, 2002).

This initiative however has its disadvantage since Safeway is entirely integrated, whichever increase in production capacity will definitely necessitate amplification in acquisition of the necessary raw materials so as to remain internally autonomous across all production phases. On the other hand, the most significant subject is that extra capital is required to sustain any capacity increase or trademark merchandise development. As can be noted, Safeway has produced several brands, which has been limited for the reason that the intensification in the individually owned-label business. If the market deteriorates, there will be a drop in sales and thus a drop in the company’s profit. With the merge, Safeway should be capable of reducing by up to five percent of companies’ expenditures. Future market fluctuations will result in encountering a high cost of production (Thomas, 2001).

Safeway’s outstanding growth and profitability for instance projects a picture of a vigorous, presumptuous-moving company. Supplementary alternatives should then as well centre upon the indispensable means of cushioning the company from risks such as counterfeits, illegal copyright practices and other forms of product or brand theft. In terms of the second, Safeway has made a number of premeditated alliances with major players in the industry which will definitely prove to be quite significant in the coming years. An additional recommendation is to manage the company’s overheads by employing responsible managers with an exceptional appreciation not only for the financial plan, but also for the talents, skills and productivity of the other members of the workforce (Thomas, 2001).

The company can for instance seek further corporation with other companies in the same industry, or with particular established businesses on an individual approach. Based on its current position in the market, it seems that the company is completely conscious that it is necessary to maintain good relations not only with its customers, but also with its contract associates. These associates on the other hand will definitely gain from Safeway’s distinction in the industry as well as its connection with the respected players in the market. This association can then be used as a tool for supplementary ground-breaking ideas and affiliated increase in returns.

Clients and other up coming smaller enterprises can then be drawn by guaranteeing the public of the latest in measures and technologies to produce the best products from the company, maximum quality, affordable rates and reliable supply chain. Indeed, this can be one of the strongest selling points of the company together with its products.  The reasoning behind this idea involves a variety of factors, including the fact that Safeway intended to spend a considerable sums of money not only on expansions, but also on company-sponsored retreats for its employees and on corporate social responsibility activities. These are designed to generate shared benefit to the company, its employees, the customers, the public and its affiliates. It can therefore be concluded that Safeway’s future in terms of strategic grouping, financial plan control and pioneering products seems to be bright (Thomas, 2001).

Implementation of the strategies. Strategy functioning is an exploit stage of calculated management. It entails the undertakings that are made to set up new strategy or strengthen the existing ones. The fundamental approach operation manners are formation of yearly objectives, coming up with policies and resource allocation. Strategy execution also involves the creation of paths to be pursued with regard to harmonizing approach and managerial structures. The budgets are developed and a motivational structure is established. The company is a large corporation; for that reason approach at the corporate rank should be worried about coordinating a portfolio of businesses. For instance, management rank approach and strategy should entail decisions on which parts to develop. Other important concerns should be resource allotment among the business units (Plenert, Johannes, & Bill, 2000).

The management should be concerned about taking any available opportunity of synergies among the various business units, mergers and acquisitions. These are the basic tools for diversification. Implementation of the strategies should go hand in hand with the mission of the business. This reason for being of the company and should be expressed as a statement. The mission should give the sense of reason to the workforce and all the stakeholders involved. The management should utilize this approach as an image improvement tool to the customers. In the strategy design process the assertion of the company’s mission should set the path where the company should follow (Thomas, 2001).

The management of the company should consider the objectives that it seeks to reach. The strategies execution and implementation should be in line with these objectives. The objectives should be a clear clarification of the company’s vision. This information should be available to all the stakeholders concerned with handling the customers. The strategies should also be affected in a way that will improve the earnings to meet the development target. The process of effectuating the strategies should be achievable while at the same time very challenging. Another vital aspect is that they should be measurable in the sense that the company can check its advancement and make the necessary corrections as required (Plenert, Johannes, & Bill, 2000).

The company’s strategy for expansion should be expressed in an efficient conceptual stipulations and priorities. For effectual functioning, its requirements are translation into more thorough policies. These policies should be understood at all functional stage of the business. The manifestation of the approach in conditions of well-designed policies also provides a highlight of any sensible issues that might not have been clear at a higher management. The implementation of the strategy should be expressed into definite policies for purposeful sections. These sections include the business product marketing and promotion, product and services research and development, materials procurement process, production process of the company, human resources management and information and database systems of the company (Plenert, Johannes, & Bill, 2000).

On top of functional policies development, the execution process entail coming up with the needed resources. This is the followed by allocating the essential organizational alterations. Of importance, there is need measuring and evaluating the alterations. This aids in keeping up to date with the progress of the strategies applied. Management systems should be developed and accomplished to allow this monitoring. The methods of presentation should be put in place and the definite performance measured, and appropriate action taken to make sure that success is achieved. The strategic administration procedure should be self-motivated and continuous. An alteration in one constituent can cause a change in the complete strategy. The company management should ensure that the process is repeated regularly to adapt the approach to surrounding circumstances. Right the way through the procedure the company requires going back to the preceding stage and make any changes. The chief challenge during the implementation process is that it might not be receptive adequately for speedily changing cut-throat environments. During the alterations some of the more triumphant strategies come out unceremoniously from lower levels of the company.  Another challenge is that strategic implementation may assume moderately precise forecasting without taking into account the unanticipated events (Plenert, Johannes, & Bill, 2000).