Strategic Management Of Linea Aqua - Myassignmenthelp.Com

Question: Discuss about the Strategic Management Of Linea Aqua. Answer: Introduction MAS Linea Aqua Pvt. Ltd. is a privately owned garment company that came into existence in 2001. The company was formed after a joint venture of Speedo International, MAS Holdings and Brandot International. The company came to the market with the aim of becoming the most valuable and demanded swimwear supplier throughout the globe. With some of the most advance technology and materials, the company has able to become the most valuable brand of swimwear supplying its products in huge events such as Olympics (Unglobalcompact 2017). Sri Lanka has been a fast growing economy throughout decades. However, the country has experienced a decline in its growth from 5.6 percent in 2015 to 3.8 percent in 2017. This decline was mainly due to the bad weather and environment conditions. The change in the environment condition directly effects the growth of a company and its demand. This has also led to some geographic imbalance in the economy (Tradingeconomics 2017). The paper has highlighted the recent environmental changes in Sri Lanka and the effect of these changes on the demand of the existing organisations. The report has further analyzed the effect of these changes on the demand and growth of Linea Aqua Pvt. Ltd. It has reviewed the effect of organisations culture on the change management process. The paper concludes with some recommendations on some better change management program the company can take and a critical review on strategic management. Environmental change to Demand Change The change in the environment of the country puts a direct effect on the operation and existence of an organization. Various factors affect the environment of a nation such as political, economic, social and technological. A disruption in these factors negatively/ positively affects the demand for the products produced by the company (Hosseinzadeh, et. al. 2016). Environmental condition is one of the most important factors considered by any economy. A change in the countrys environment puts a direct impact on the daily life of the people and on the economic growth. It is further noticed that any action taken due to environmental effect puts a direct impact on the productivity of a company. The externalities associated with the degradation of the economic scenario also lead to market failure (Johnson 2015). The environmental scenario of a Sri Lanka is analyzed below. PEST Analysis Factor Implication Impact Political Sri Lanka ranks 110 out of 19- countries in ease of doing business (Doingbusiness 2017) Easy growth of expansion and growth in the home market High The companies need to navigate the risk existing in that economy in order to gain from business (Gov 2017) Gives new ways to explore the business for successful expansion High Political stability Help business expand easily in their internal as well as in international market High A literacy rate of 92 percent that shows that the people of the country are highly educated (User 2017) The people of the country are modern and open to modern wears and designs Social The consumer spending in these items has also increases Indicates that the demand for swimwear and privation has increased Decrease in unemployment rate and better living standards (Worldbank 2017) Purchasing power of the people has increased considerably The economy has recently experienced a reduction in its GDP from 4.8 percent in 2015 to 4.4 percent in 2016 (Asian Development Bank 2017) High demand and supply for the product compared to the competitors High Economical The unemployment rate on the other hand is as high as 4.7% in the country (Forbes 2017) Increased opportunity to earn and increase the demand for product High government is putting continuous effort for the development of the economy will have a positive effect on the country High opportunities to business Medium Known as the most diversity rich country in Asia because of its rich forest content Supportive for increasing the supply of the company Medium Environmental Facing threats on its diversity due to high population trend and commercialization (Cens 2017) Threat on the supply and failure to meet the demand High Green manufacturing technique Positive move for organisation success Low The technology growing continuously Technology is a key to development High Technological Developing new techniques to form a sustainable environment Supportive to the environmental needs Medium Exports only 1 percent of technology to other nations (Costi 2017) Mostly used by home country for increasing the supply High Legal Strict environmental laws and rules Eco friendly movement of the company Medium Various labour laws and regulations (Heritage 2017) Maintain over production and disruption in business High Figure 1: Pestle analysis Source: (Authors creation) Identify early signs of demand change Changes in the environment of the country put its effect on the consumer demand of Linea Aqua Pvt. Ltd. The changes in the demand is caused due to various factors such as changes in consumers taste and preferences, income and employment, prices of goods, number of buyers and many more (Mankiw 2014). The changes in these factors are directly due to changes in the environmental conditions of the nation. Thus, the company itself should deal any negative impact of environment change on the demand of the companys product. The early signs of demand change is mainly noticeable with the change in the culture and norms of the society, the preference of the individual, the rate of unemployment in the country and the level of income earned by the people. Changes in any of these factors have a positive or negative effect on amount of swimwear demanded in the country. What is demand change? Demand change is the change in the demand for a quantity of goods that the consumers desire to buy. The change in the demand can be attributed to a number of factors such as price of the product, the change in the social thinking of the people that affects consumers preference for the product. The change in the level of income of the people and a change in the number of buyers of the product also effects demand. For example, if there is an increase in the level of income of the people then there the purchasing power of the consumers will increase. This will result in an increase in demand for the product. How Linea Aqua Pvt. Ltd. performing at Europe market Linea Aqua Pvt. Ltd. has expanded itself in 10 countries worldwide with its main center in Sri Lanka. The company is working very well with its partner countries such as Europe and US. The most important partners and customers of Linea Aqua Pvt. Ltd. are the European brands such as Marks Spencer, Adidas, Nike, Victoria Secret and Reebok. The companys export to these European brands has recently estimated to increase more than 500 percent. According to the recent updates, the brand has become the most important and biggest supplier of garments of Victoria Secret. The company has also been able to become the close strategic partner of Nike due to the sustainable environment effort put up by the company (Holden, Linnerud and Banister 2017). The company shares its customer base all over the world with a 25 percent of customers in Europe (Unglobalcompact 2017). Geographic Customer Base in 2011 Percent UK 10 EUROPE 25 USA 60 ASIA 5 Figure 1: Geographic customer base of MAS Linea Aqua Pvt. Ltd. Source: (Masholdings 2017) Internal Organizational changes and demand change The internal organizational change in the company depends on the type of management system followed internally. The management system involves operations, leadership style, the employees and the structure of the business. Further, it also depends on the companys mission and the culture that the organization follows. These factors have a direct effect on the organization as it influence the decision and attitude of the employees. Any change in the leadership style and mission statement of the organization will impact the company positively or negatively (Benn, Dunphy and Griffiths 2014). SWOT analysis is a type of environmental canning The environment and cultural change-taking place in a company can be analyzed using the SWOT analysis. The analysis helps to know the internal environment of the company that could prove to be its strength and weakness. It also analyses the threat and opportunity the company holds in its external environment (Bull, et. al. 2016). Strength Weakness Opportunity Threat Strong Financial base of $700 million. Innovative management team. Market coverage to 13 countries. Global presence. Dependent on outside market. Works on contract basis. Newly invented organisation. Easily fights competition with its unique designs. Expanding to Asian market. Product development through sustainability techniques. Tough competition from other well developed companies. Figure 2: SWOT Analysis of Linea Aqua Pvt. Ltd. Source: (Created by Author) Marketing Business Strategies at Linea Aqua Pvt. Ltd. using Ansoffs matrix Ansoff Matrix helps the company to analyze the number of growth strategies available to them and choose the most appropriate strategy it can use to enter the future market. The matrix firstly constitutes the available market of the company and the kind of future development the organization can take depending on that (Yin 2016). Product Development strategy Product development The innovation DNA of the company has always allowed them to take up continuous innovation over the period. Linea Aqua Pvt. Ltd. have always been in the top with innovative introduction of apparels that is unique from the market. The innovation in Linea Aqua Pvt. Ltd. takes pace with the help of integrated business framework. The company was the first to introduce silicon technology in the market. The technology was first used in simple swimwear and was then extended to fashionable ones. The company also launched products like the Speedo FastSkin FS-Pro swimsuit that was used in the Olympics. The company offers high quality products that have the power to safeguard from sun, rash free, diaper guards and quick dry features. These high quality swimwear is manufactured by the company in the name of Victoria Secret, Michael Kors, Calvin Klein and many more. The company has recently introduced a carbon neutral bra and swimwear that is one of a kind in the world market (Unglobalcompact 201 7). Product Penetration strategy Product Penetration Linea Aqua Pvt. Ltd. has entered the market with unique lines of product developed by its designing and development team located in Honk Kong, USA, Sri Lanka and UK. This enabled the company to create exclusive fashionable Lingerie and swimwear for the customers. The company has entered into the market with innovation every time. This is visible from the previous launches by Linea Aqua Pvt. Ltd. such as No Show Sexy, Lavender Grey and many more. Linea Aqua Pvt. Ltd. have used digital technology from time to time to enter the market much faster than its competitors have. It has done this by meeting the requirements of the customers each time along with environment need. Recent initiative by the firm to enter the market is through lean management system that is known as MAS Operating System (Masholdings 2017). Market Development strategy Market Development The company aims to meet the requirement of each of its customers by offering wide range of products. The company was involved in offering wide varieties of swimwear to Nike, Victoria Secret and many other brands. Recently Linea Aqua Pvt. Ltd. is planning to develop cotton apparels for the market. The firm is thus planning to enter into a different market segment. The company has also introduced eco friendly operation technology to check the pollution problem of Sri Lanka. By doing this, it is entering the sustainable enabled market segment. The Sri Lankan company has spread its business to some of the niche market of UK, USA and Europe. Recently it has expanded its products into the niche Asian market such as India (Masholdings 2017). Diversification strategy Diversification The company has teamed up Nylon Dentelles de Calais recently and introduced a range of lace such as Raschel lace and Jacquardtronic lace. The Speedo FastSkin suit is another big product diversification taken u by the company. This suit was used in Olympics. A control panel to slenderize the body features the swimwear manufactured by the company (Masholdings 2017). Identify of the organization culture and change management The company follows Lean management practices that focus on the 5s and seven waste models (Martnez-Jurado 2014). The division that carries out lean management operations is known as MAS Operation system. The company follows this technique to maximize its production needs and meet the demand of the customers. Linea Aqua Pvt. Ltd. has adopted a new waste management technique in its Hanwella Factory. Neutrality of water is its main concept that focuses on recycling the wastewater in the manufacturing unit. Culture is one of the most important factor in an organization as it helps in structuring the personality of the firm. The culture of an organization consists of its staffs, techniques, values, policies and management behavior (Alshaher 2013). Linea Aqua Pvt. Ltd. is focused in maintaining a healthy culture with its people and drives team spirit. The culture of the company is focused on continuous learning and innovations to keep pace with the growing environment of Sri Lanka. Such positive culture and motive of the firm has helped the company to maintain good relationship with its partners. Thus, this shows culture is important in the organization along its lifespan. Identify of the organization leadership and change management The company believes in participative style of leadership in its management system. According to participative leadership style, all the employees in the organization work in collaboration with one another is the product is the result of their total action (Ghaffari 2017). This has helped the company to expand rapidly in the global market. The firm has able to form collaboration with its international partners as well in order to deliver their products smoothly. It has also taken initiative in organizing work to the women employees as well that has positively affected the total productivity. Change is courage is the most famous slogan carried out by the company that is similar to the Kurt Lewin model. The model focused on organizational change through three stages such as Unfreezing continued by implementation and again freezing the changes (Cummings and Worley 2014). Effectiveness of Linea Aqua Pvt. Ltd. change management With a strong technical strength with different partners throughout the globe has helped the company to be one of the best in supplying swimwear in Sri Lanka and abroad. Reviewing the environment change of the country that could affect the demand for the product, there was an urgent need for taking up strategic management plan. The strategic management plan that involved innovation, product development, market segmentation and diversification of unique products has helped the company to fight competition. The Recommendation for better change management plan The company is one of the leading swimwear-manufacturing units in Sri Lanka and is continuously involved in the innovation and new technology development over the years. This has given the firm a unique place in the apparel manufacturing division of the country. It has also set its place in the international market with its strong partnership connections and market image. However, the organization still needs to work in some places to deliver faster and more effective products. It should focus on the expanding its business in other Asian markets such as India, Bangladesh and Vietnam. These markets will offer a huge customer base to the country because of its high population. It should plan to penetrate in these markets with a much reasonable price and aim at serving the mass market instead of niche market. This is because maximum population in these markets falls under low-income group. Expansion in the Asian market will also be profitable for the company because of low labour cost and manufacturing cost in these countries. The company should take up better training and motivational facilities to improve the quality of labour. These steps will allow the firm to maintain its growth even in the disruptive situation of Sri Lankan economy. Schools of thought Strategic Management The basis of strategic management depends on ten schools of thoughts. The ten school of thought depends on design, planning, positioning, enterprise, cognitive, learning, power, culture, environment and configuration (Ferlie and Ongaro 2015). Design school of thought This school of thought involves analysing the situation and creating an idea for future development of the company. This involves analysing the internal environment of the company using SWOT analysis. Further, the strength of the company is match by the market scenario to implement the new ideas. Planning school of thought This case come after the design has been chosen. It involves rigorous planning of the process with the help of strategy to help the firm develop further. This school of thought gives way to a lot of problem is the action is taken without a proper planning. However, the planning school of thought might not work effectively if the plan is made for a long term and changes arises in the external and internal environment of the company over the years. Positioning school of thought This school of thought is used by the organisation when it wants to decide the type of positioning it chooses itself to be placed in the market. For this, it has to carry out analysis of its competitors and five forces analysis. Enterprise school of thought This thought focuses on the CEO or entrepreneur of the organisation. The authority of the organisation should be visionary and strong to carry out the operations effectively. Cognitive school of thought In this school, the perception of the people and their thought process is studied. It is a process through which a business can increase their value by reading the need of the customers. However, this model fails on practicality ground in some places. Learning school of thought In this school of thought the management of the company analyses the past performances of the company and forms a new strategic plan for future development. It is a future road map that is drawn from the previous experiences. Power school of thought The powerful people of the organisation or in the external environment take all the important decision of the company. These powerful people can even be the customers of the company who influence the decision making body of the organisation. Culture school of thought This school shows the capital content of the company and its position in the market. It shows the importance of internal culture on the positive growth fi the company. 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