Strategic Management - Dick Smith Case Study

Only available on StudyMode
  • Download(s) : 237
  • Published : May 5, 2012
Open Document
Text Preview
Dick Smith Foods is an Australian known organisation that appeals to the Australian

population to buy its products over cheap international imports. Strategic management and

strategy is a key factor when trying to compete and the external and internal environment

needs to be analysed to do it effectively. By using business level strategy Dick Smith can

compete with its competitors and achieve its goal of being one of the main brands that

Australians prefer to buy.

Strategic management is defined as dealing with the major intended and emergent initiatives

taken by general managers on behalf of owners involving utilization of resources to enhance

the performance of firms in their external environment (Harrington and Ottenbacher, 2010).

By using strategic management firms can gain a competitive advantage over other firms

and compete with them. Blumentritt (2006) explains that strategic management is a process

of beginning with a mission and vision. After its goals are set analysis and planning begins

followed by implementation. An evaluation takes place at the conclusion. The nature of

competition in many world industries is changing; there is a new landscape in the 21st

century. There is hyper competition like never before, technological advancements are at

a high and investments are becoming enormous. Technology is constantly changing so

businesses must adapt to stay up to date and use their resources wisely. Fleck (2008) talks

about disruptive technologies and how they caused problems. He explained that disruptive

technologies bring a new value proposition to the market and offer different features. The

rate of technological improvements tends to be faster than the improvement demanded

by customers. Ngamkroeckjoti and Johri (2003) describe hyper competition as rapidly

escalating competition arising from strategic decisions made by global and innovative

competitors. Dick Smith foods is in a difficult position as it is not selling its product as

cheaply as international competitors, hoping that its Australian made product will appeal

to Australians for them not to buy from overseas. With technology being so advanced to

produce so much so cheaply, Dick Smith will struggle to appeal to a market who simply

wants the cheapest product.

Kefalas (2007) states that there are six sectors in the general business external environment

which must be considered when implementing strategy. He talked about the demographic,

economic, socio-cultural, legal, technological and global sectors. As Dick Smith is concerned

about products being bought from overseas instead of within the country, he is focusing

on the socio-cultural aspect of the general environment. Another segment he would be

researching would be global markets as he has to compete with all the cheaper alternatives.

Mason (2007) talks about the five sources model of competition which includes threat of new

entrants, power of suppliers, power of buyers, threat of product substitutes and intensity of

rivalry among competitors. Mason talks about products needing to be differentiated; products

must be at competitive prices and must be unique in order to attract customer loyalty. Smith

appeals to customers with its unique Australian branding but prices are not as competitive

as cheaper alternatives from overseas. Customer loyalty would be crucial for Smith to stay

competitive as this is why he created the brand, to appeal to Australians. He must also be

aware of the rivalry among competitors, it is a popular industry but with his iconic brand

name he can be unique from the rest. The external environment is very important to all

businesses as they must know what they are up against, especially one that must compete

with the world. Not only does the external environment need to be analysed but also the

internal environment which relates to processes inside the...
tracking img