Strategic Business Management in the Globalized Era

Introduction

Business management is necessary for the organisations in the recent era of globalisation, where the firms try to conduct the internal and external environmental analysis to understand the circumstances of doing the business international and identify the risk factors in the market (Trigeorgis and Reuer, 2017). The analysis is also effective for acknowledging the future market opportunities and develops effective organisational strategic planning in order to fulfil the purpose of the brand. The study aims at conducting the environmental analysis in the electronics products and analyse he strategic planning or the organisation Bang & Olufsen to review the tactics of running their business in the global market. The study also provides a scope to analyse the strategic planning of the business and the market opportunities so that Bang & Olufsen can expand their business strategically across the globe.

Company background

Bang & Olufsen was established in 1925 in Denmark and it is considered as one of the effective organisation for Danish industrial legacy. It is a well known brand, which focuses on designing and manufacturing the latest high tech solutions including television, multimedia, music system and speakers. In the recent years, the company mainly focuses on high tech audio system to attract the customers across the globe. The company is known as luxurious brand in the market, where the customers expect high technology products, creative design and quality of the products. However, the company faced difficulties to generate profitability and in the year of 2007 and 2009, it lost their profitability volume by 20% due to reduction in sales volume mainly in the markets like Germany, Denmark and Great Britain. It is necessary for the brand to reshape their business and develop appropriate strategic planning to establish the firm in the global market.

Organisational position

As per the market share, the company fails to gain competitive advantage due to presence f other electronics companies such as Sonos, Sony, Bose Corporations, Apple, Studio Technology and Konka group company, which are paying efficiently in the global market and the competitors are also efficient to serve the customers with high quality and high tech products. In this regard, the company Bang & Olufsen faced difficulties to gain market share and establish the business sustainably. Due to lack of strategic planning and the positioning strategy, it also becomes difficult for the organisation to manage their operations and generate high profit volume. Hereby, the company Bang & Olufsen faces high competitive threats in the international market, where the company has small markets share and it is difficult to run their business efficiently without having proper strategic planning. As per the market segmentation, the organisation Bang & Olufsen focuses on medium and high economic class, as it is a luxury brand and the price of the products are high. On the other hand, the company also segment the customers in the market according to their choice and preferences and in this regard, Bang & Olufse also targets the music lovers and the consumers who prefer high tech electronics products, mainly the music system and speakers. For successful positioning strategy, the company focuses on developing its online website, where the customers can make effective purchase decision for their products and services. The company also develops the strategy to serve the customers efficiently and fulfil their queries over online activities where the staff members are efficient to deliver 24*7 services to each customer. On the other hand, the supply chain and distribution network of the company b Bang & Olufsen is also strong which further helps the firm to strengthen their position in the electronics market across the globe. However, due to presence of other efficient competitor, the firm lacks to gain high competitive advantage (Bang & Olufsen, 2020).

Strategic direction

The organisation aim at establishing the business efficiently, by developing proper strategy and in this regard both the corporate level strategy and the business strategy are required to make the operations successfully.

Business strategy:

The business level strategy is important for the organisation to stabilise the business and fulfil the objective. In this regard, the organisation Bang & Olufsen focuses on adjusting the cost structure according to the market condition. During the recession, it was very difficult for the organisation to capture the market and retain the audiences for their products. In the recent years, the market condition is stable and it is necessary for the firm to reshape their business strategy and manage the cost structure for producing the products. The cost leadership strategy in this regard is appropriate for the firm to manage their cost structure and improve their economies of scaled by enhancing the efficiency of manufacturing the high tech products in the market (Chaffey, Hemphill and Edmundson-Bird, 2019). It is also important to develop different production site to manage the cost and arrange the raw materials effectively for better production of the products. For better management of the customers, it is necessary to set the price level for the products which is affordable so that the customers across the globe can afford the products. The company also focuses on global sales organisation to support the 800 authorised concept stores worldwide and the 400 shop-in-shop. These are the major business strategic planning through which the company aims at running their operations and serving the customers efficiently with high quality products (Bang & Olufsen, 2020).

Corporate level strategy:

The corporate level strategy is also mandatory to be developed in the company in order to expand their business efficiently. In this regard, the company focuses on product diversification to manage the different customer segment and attract the diversify customers for the products and services of the organisation. In his regard, the company Bang & Olufsen mainly focuses on two product categories which are audio and video products. The high tech speakers and music systems are produced to attract the customer as well as there will other video products which are also available in the market (Chalaby, 2019). Product portfolio management is hereby another major strategic planning of the firm to manage their operations and expand the business efficiently across the international countries. In addition to this, there is another strategy which is related to positioning the brand in the market and in this regard the company Bang & Olufsen focuses on one technological digital platform for launching the products and it further helps the company to reduce the time and cost of launching the products in the market (Bang & Olufsen, 2020).

These are the major strategic planning of the company, through which it aims to establish the business in the market. Product diversification and the cost leadership strategy are effective which provides a scope to Bang & Olufsen for reducing the cost of the production of high tech products and services and offer different products with creative design to the customer which in turn helps to gain high competitive advantage over the competitive brands in the market. In addition to this, cost leadership strategy is also beneficial for Bang & Olufsen, where the company can set lower price for their products and target more customers and this further helps to create value for the customers, where Bang & Olufsen becomes efficient to deliver high tech quality products at affordable price. This business strategy is useful for Bang & Olufsen to establish the brand in the market and attract more audiences or future market expansion and organisational growth.

External analysis

It is necessary to conduct the external analysis of the business, through utilising the models of PESTLE framework and Porter’s five forces, which are helpful to analyse the marketing competition, and external circumstances where the firm can develop their operational activities in the market.

PESTLE analysis:

Porter’s five forces analysis:

Internal analysis

Internal analysis can be conducted through value chain analysis and SWOT analysis for the organisation, which helps to identify the internal structure and organisational capabilities.

Value chain analysis:

The value chain analysis is effective to identify the internal analysis, where the primary activities are inbound and outbound logistics, operations, marketing and sales and services. The secondary activities are technology development, firm infrastructure, human resource management and procurement (Rothaermel, 2016). The company Bang & Olufsen is efficient to manage their human resources and procurement through developing effective strategic planning.

The technological development and firm infrastructure are also effective factor to boost the performance of Bang & Olufsen, where the company aims at developing the firm infrastructure and implement latest IT system for developing high tech audio video products. The organisation Bang & Olufsen is also efficient to manage the outbound and inbound logistics, where warehouse management and presence of efficient suppliers and strong distribution network are effective for the business to manage stock of the product safely and distribute it efficiently.

SWOT analysis:

Conclusion

The firm Bang & Olufsen is efficient to develop their organisational infrastructure and invest adequate capital for better management of the manufacturing the products and services. Financial stability and brand management strategy as well as corporate strategy of Bang & Olufsen are effective to establish the organisation in future. There are market opportunities due to high technological advancement, introduction of creative and high tech audio video products, e-commerce service growth and the chance to expand the business internationally which further gives the chance to Bang & Olufsen to secure future sustainable development by creating high tech audio video products and managing cost leadership strategy so that the production cost would be minimised and the company would be able to set affordable price for strengthening their customers base and generating profitability in long run.

Reference List

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