Description
Critical Thinking: Strategic Recommendations (105 points)
In developing this assignment, you have an opportunity to synthesize and apply the concepts, principles, and theories. You will be writing a paper in response to the following hypothetical situation.
Scenario:
You work in strategy planning for a KSA organization. You’ve been in the organization in a variety of roles for five years. Recently, the senior leadership team determined that your organization needs a more effective strategy planning process, and you’ve gladly stepped into a role to help determine what the improved process or activities might be.
You’ve been asked by your manager to put together specific strategic recommendations to help the executive team better understand the concepts and principles of a well-designed strategy process. Further, these recommendations will include a set of examples of strategy planning activities specific to your organization.
Instructions:
- The choice of organization is up to you. Describe your organization in terms of its industry, type (private or public sector), headquarters and other locations, and size.
- Present the strategy concepts, theories, and principles that you believe are important for the senior executive leadership team to understand. If there are contradicting opinions from strategy experts, you may want to present both sides in an objective discussion.
- Present four examples of strategy planning activities from four different modules that are designed specifically for your hypothetical organization. For each of your strategy planning activities, include a clear and understandable title along with a brief overview description of one or two sentences for each.
Example: In MGT510, the focus of Modules 2 and 3 is on Industry Analysis. One example of an activity that would be relevant to content from those modules is AnalyzingIndustry, Key Success Factors, and Profitability.
- Include the titles of the example activities, with more complete descriptions for each. Explain the benefits and value of each activity specific to your organization.
Your well-written paper should meet the following requirements:
- Use Saudi Electronic University academic writing standards and APA style guidelines.
Explanation & Answer
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Running head: STRATEGIC RECOMMENDATIONS
Critical Thinking: Strategic Recommendations
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STRATEGIC RECOMMENDATIONS
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Introduction
Kingdom Holding Company (KHC) is a Saudi multinational holding organization with
headquarters in Riyadh, Saudi Arabia. KHC is a diversified private investment company with
interests in high performing global brands and strategic regional interests. Prince Alwaleed Bin
Talal, one of the distinguished investors in the world, heads the organization. KHC is the owner
of Fairmont hotel groups and has stakes in the Four Seasons hotel chains, Newscorp, and Rupert
Murdoch Media Company. Other corporations in KHC’s portfolio are Hewlett-Packard, Walt
Disney, Time Warner, and PepsiCo. The organization is among the world’s largest
multinationals in the diversified investments conglomerate industry with regional and
international holdings in various key sectors. KHC is recognized as one of the largest foreign
investors in the U.S. and other emerging markets like Africa. KHC is operating in an
environment of uncertainty, and the firm is likely to be rocked by unexpected threats and the
emergence of new opportunities. In such a turbulent environment, the organization needs a
strategy that will give it direction in the pursuit of its goals. This paper explores the strategic
recommendations by outlining various concepts and principles of strategic planning that are
important for the organization to maintain a favorable position in the market.
Strategic Planning
Strategy refers to a plan for using resources to create a competitive position while
strategic planning is the process used by businesses, organizations, and other groups to establish
a blueprint for a tactic for change within the business or organization (Jordan & Grant, 2015). At
the organizational level, strategic planning is based on a realistic evaluation of resources,
methods to assess the plan’s success, and result in the long-term commitment. In the face of
relentless competition and continuous change, KHC requires business strategy. A business
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strategy will allow KHC to establish a competitive advantage over its competitors. This is also
known as a competitive strategy. Within KHC, a strategy will perform the role of decision
support. A strategy will simplify the decision-making process by allowing the knowledge of
different employees to be collective and incorporated. Second, strategy will act as a target since
it will not only determine how KHC will compete, but also who the organization will be in
future. This will not only develop a direction for the organization but also create aspirations that
will motivate and inspire employees.
Strategy Concepts, Theories, and Principles
The business environment of an organization involves the internal factors and the
industry factors that influence its decisions and operations. The internal and external factors
work together to influence the performance of a business. In this case, KHC needs to analyze its
internal environment and determine if its resources and capabilities are significant in conferring a
sustainable business strategy (Jordan & Grant, 2015). The organization is also required to
conduct an industry analysis to establish the determinants of the industry profit, i.e., the demand
and competition.
Resources and Capabilities
Resources refer to the productive assets owned by an organization while capabilities are
what an organization can achieve. There are two types of resources in an organization, tangible
resources, and intangible resources. Tangible resources are the physical assets owned by an
organization while the intangible resources are the long-term resource of an organization that
lacks physical existence. The significance of analyzing a KHC’ resources is to understand its
potential for creating a competitive environment. In the last ten years, KHC has seen its fixed
asset value rise to $531.3M. To evaluate the capability of the organization to compete effectively
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on the global market, the executive team needs to understand the composition of these assets to
explore how these resources can create additional value for the company (Hitt, Ireland &
Hoskisson, 2017). Therefore, KHC needs to determine the possibility of utilizing the present
assets to develop a competitive strategy. KHC’s major intangible resources are the financial
strength and the human resources. The financial strength will allow the organization to
implement marketing strategies that will allow it compete aggressively with competitors such as
The Olayan Group Al Muhaidib and Four Seasons.
KHC’s human resource consists of a set of expertise and efforts provided by the
employees. The organization evaluates its workforce during hiring when prospective staffs are
apprised in relation to job requirements. An evaluation framework that should be used is
competency modeling that entails recognizing content knowledge, attitudes, a set of skills, and
values that are associated with high players (Jordan & Grant, 2015). The key characteristics that
an employee should possess are the social and psychologic aptitudes since emotional intelligence
is important in developing emotional awareness and interpersonal skills. However, these
resources are not productive on their own, and they need organization capabilities to realize a
strategic relevance. When it comes to tangible resources, the organization should effectively
manage the company’s worldwide assets to ensure that they achieve a strategic relevance
(Emerald Group Publishing., 2005). Intangible resources are important in maintaining the brand
image of the organization while human resources should achieve a strategic relevance by being
able to recruit and retain talented employees.
Industry Analysis
The creation of value for customers is a major prerequisite for profit in any industry.
However, this creation of value does not imply that the products and service offered by an
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organization will translate into profits. The value earned by KHC in the industry is determined
by a combination of factors that include the level of competition and the producer’s bargaining
power relative to the dealers. The major business segments for KHC are hotels, equity, real
estate and domestic. The equity segment entails investment in quoted the Saudi, private, and
international securities. The hotels’ segments entail investment in holdings and associates
operating in the business of managing and owning hotel properties (Jordan & Grant, 2015).
Lastly, the real estate and domestic segments entail investment in the development of land
properties and local entities. Therefore, KHC needs to determine the industry attractiveness since
these segments vary in profitability. Some of the industries such as tourism have high rates of
profitability than others such as the airlines have failed to cover the cost of capital.
Strategic Planning Activities
Strategic planning activities involve the response of an organization’s to a competitive
environment. KHC needs to evaluate the attractiveness of any industry ...