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Strategic management and business insurance plan module

1 There were a number of concurrent changes in the VSM Group in the period 1997-2003, is the VSM Group still the same company?

No the business has altered a great deal with the introduction of the new CEO, new things has been launched as:

  • More people were involved in strategic sessions
  • New mission statement
  • Associate strategy
  • High engagement of employees on different level
  • Purchase of competition added development capacity to the firm
  • Procedures have been aimed towards strengthening the linkages between efficient areas in the worthiness chain.
  • The physical relocation of the R&D and marketing departments to the same building
  • New programs for educating the suppliers and customers on sewing and using the machines.
  • Integrating technology (mainly online) with the development of the new machines.

2 How could you describe the proper capability of Viking Sewing Machines in 1997? In 2003?

In 1997:

  • THE BUSINESS brought their professionals of these major nationwide sales companies as well as the marketing vice leader into the top management; also there have been changes in their operating systems
  • New mission and documents brought different level together which added a broader perception
  • Bringing the specialized know-how and marketers mutually to create new improvements that meet customers' needs.

In 2003:

  • New and exclusive retailers had been added.
  • Two strong brands, Pfaff as a high quality brand, and Husqvarna as the family and progressive brand.
  • Brno added add capacity of production to the company, which was cost efficient and added capacity to the creation.
  • They have expertise in the product development of the sewing machines industry

3 Are the core competences in 2003 more robust than in 1997?

Definitely yes; there were more focus in the strategy and route in 2003

  • They may have better product development capabilities.
  • Two strong brands.
  • An IT company to build up their own technology work, thus controlling the adornments market.
  • Building linkages within the worthiness chain.

4 What exactly are the important factors in the macro-environment that influence VSM and its own industry?

Political

The politics situation might be affected by the trade arrangement between the State governments and the Western origin products. Also, processing in china and taiwan may have some regulations and further taxations since these market segments are flooding the planet with more affordable products.

Economic

The financial situation is influenced by the difference in money of the several origin or creation and consumer markets. To improve quality they could need to change the factors from ASIA to some other location with higher pays. Also, Sales of inexpensive simple machines have increased, while more advanced machines showed continuous sales.

Social

Clothes became cheaper so no dependence on sewing at home. More communal activities surfaced and led to less time afforded to sewing hobbies

Technological

This acquired the major contribution here as a consequence to:

  • The high development of the internet usages and its spread; The power and reach of the new software.
  • Enlargement of the senses and computerized motors to provide better functionality to the machines.
  • People (Customers) are definitely more technologically driven and are up to date with improvements thus ask the new and complicated models.

Environmental

Natural turmoil as Tsunamis are intimidating the Far East which might cause a slice of production and disruption to the developing flow.

Legal

It will depend on new regulation for this industry or in the professional market as a whole

5 What exactly are the causes of competition in the sewing machine industry?

Five Pushes analysis

Competitive rivalry

  • Medium since there are average product innovation, no real competition on the market through prices and handling resellers.
  • Low range of competitors within the same segment
  • There are some product differentiations in the entire products that depend on innovation

Entry barrier

Low, with some matter about the reach to the circulation stations that work specifically with the other companies. There are a few capital investment and know-how but it isn't a significant one.

Buyer power

Buyers have high bargaining power credited to low switching costs between brands because the industry is older and there aren't a whole lot of product differentiations for the overall products.

Supplier Power

There aren't any attentiveness in the company area, and the natural material are mainly standard materials and the creation and the R&D at the VMS are within the other parts, thus we see this as fragile

Substitutes

Mostly the forex market have good quality machines and a lesser cost ones from east Asia, thus they fluctuate in price and quality, and turning cost is low, thus it will increase the threats for the normal machines, while intricate computerized machines are limited in the market.

From the above we don't see the market as attractive for new entrant since people tent more to buy cloths outside the house and also have very attractive and affordable prices of clothes alternatively than creating their own.

6 What are the next proper issues Viking must address? What tactical options might be looked at?

They need to maintain their technical command and managing the worthiness chain. Also they have to control their brands and their recent acquisitions. For their next steps it should be to safeguard and build on the current successful position.

They should focus on increasing their customer orientation, R&D, development, marketing, distribution in every parts of their value chain. Where the vendors have a major role in reaching their customer, which needs concentration and follow up on their training and assisting them, this will also place a good area of the attention on marketing and customers relationship management and VSM has changed by making use of the new CEO from a product orientated company to market oriented one. In addition they started to concentrate on selected customer segment to pay their needs; this is shown with the different targeting technique using their VMS and Pfaff type of machines, were they need to focus on the advancement of products and services.

The company has good focus on the acquisition of Emnet and software designers processing companies. Where they need to build on their traditional strength and benefit from their product development, and the utilization of the new technology to include an edge to them in this industry m where the production have to be satisfied with an intense and smart sales force.

7 How exactly does the strategy of the VSM Group match its proper capability with its environment? How achieved it differ from 1997 to 2003?

They need to focus on their existing source of information positions and building on their new resources to capture a position on their selected market.

VSM acquired many important recourses and competences that help them with the preliminary strategy building on their R&D process and progressive production that have highlighted their brand, here they missed the value of marketing and its power to play with the environmental factors to bring more success to the firm. And since the market was declining the best way to make it through was to focus on differentiation products that are high computerized. And mainly concentrate differentiation and top grade models, which had a need to reach the customer with exclusive sellers and at primary locations, and needed keep the stream of the experience that they had trained the merchants to an even that stand for them and keep a good romance with the clients. Here they also created training programs because of their customers of the machines and coach them on professional ways and habits of using these machines.

Problem with their earlier value string and not being able to have the power reach their clients due to the lack of the marketing control over stores thus the new strategy was to fix this cut in the hyperlink in the worthiness chain, another concern these were facing is having less communication between their R&N and their marketing department, that your new CEO helped bring these section physical near one another to improve this channels.

Their new acquisition of their competition Pfaff added new resources and a strong top quality brand to the group, finished. now is how to manage their two brands since they compete in the same markets realizing that the perceived value and prices aren't the only real player in the market, here they benefited from other technological edge and their high quality products in a clear market communication process to reach their desired customers segments each one by its without affecting the flow and the strategy of the other brand.

8 The situation starts with the entrance of the new CEO. What role have Mr. Runnquist play in the transformation of the business? How important is he for the future of the company?

The New CEO defiantly added too much to the organization and did a paradigm transfer to their working culture, such as collaboration of your bigger audience in major decisions of the organization, educating employees, stores and end users. He was under press since the company was newly sold to a fresh owner that expected income to jump, which made him transfer the organization from production focused to market focused one to take all aspects and respond on them.

Here the need for a fresh mission, perspective and strategic report of the business surfaced, where he have going the causes from different departments to get involved and build them, this of course included different degrees of the organization to hop in these activity that have added some sense of commitment and ownership among all levels.

Another major issue he worked on is the tranquility and good degree of communication in their value chain, working from the R&D, production, marketing, Sales, shop to the end customers. This helped in having all these level at the same level of professionalism and kept up to date knowledge to better understand the products to have the ability to sell or buy them.

He is vital for the continuity and the near future obstacles that will face VMS, he need to continually have an eyeball available for new channels and treats and benefit from this firm's resources and capabilities building on the experiences to capture opportunity and change weakness and snacks to bring more success to the company, this of course means that he might have another paradigm change if it's needed.

9 At two items in time, the CEO of the VSM Group opens up a wide discussion on the strategic issues. What issues are reviewed and why does indeed he involve a larger group of the management on these issues?

The first one is at 1997, when he became a member of the business and need all level to be part of the new paradigm switch and attitude of the firm and be a part in creating their new mission.

The second one was in 2000, after the acquisition of other organizations team from beyond your higher management was brought again to go over the continuing future of the firm and to gain legitimacy for the strategy ahead. The importance of this part was also to create all thoughts to a targeted set of activities to cope with the two competing rand so as not to confuse the marketplace and employees so rather than to reduce their corporate id.

It is important to take part a good audience to produce commitment to the new strategic steps and create some sense of ownership among different level in the firm and press hard for the future and targets.

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