Type: Definition Essays
Sample donated: Jessica Anderson
Last updated: April 18, 2019
A business opportunity has inspired me to start my own business in the home entertainment industry. The business in the industry will be performed by globally selling DVD and CD products, which can be described as physical containers of entertainment elements from film, music and game studios. For acquiring information of the opportunities and possibilities of the business for me, who acts as an entrepreneur, relevant business strategy will be made as the following assignment.
1. Definition of the concept of business strategy.The concept of business strategy will be defined as the points below.
(1) To define the concept of business strategy, initially, the definition of strategy will be given.Strategy is the determination of long term goals and course of action on achieving these goals. (Business Strategy 2004)As it has defined, it is a designation of plans for action to achieve a particular goal. Similarly, for a company, it is a particular business goal.(2) One of the most important elements in the business strategy is their objectives.However, before making the objectives, the mission should firstly be set. From this point, business mission is to provide information on the character of a company and what business a company is doing.
When the setup of the mission is done, there will be an inspection of the objectives. There are three different kinds of objectives: corporate objectives, functional objectives and individual objectives.Corporate objectives are the objectives which are related to factors which determine an organization’s success. There are two kinds of it: financial objectives, which are the objectives on the concentration of financial results, and outcomes that management wants the organization to achieve; and strategic objectives, which aim at results that reflect increased competitiveness and a stronger business position.Functional objectives are the objectives which “relate to a department or section and will include most team objectives as well.” (Business Strategy 2004: 5)Individual objectives are the objectives “relate to particular people and to their work.” (Business Strategy 2004: 5)(3) In order to carry out business strategy management, there are five tasks to be done, as a process.
It can be illustrated as following.At first, the task is for developing vision and mission. When it is done, secondly, objectives will be set. Then, from the set objectives, it is necessary to formulate strategy and achieving objectives, as the third task in the process.
Afterwards, implementation and execution of the strategy will be made. Finally, the last task of the process is to monitor evaluation and task corrective actions.From the complete process described above, there is a complete form-up of business strategy management.
(4) As in the business strategy management, there are four different performers which are called: senior corporate executives, managers of subsidiary units, managers of functional areas and operating managers.(5) The origin of the business strategy is supposed to be searched in order to have better understanding of it.Strategy is originated from military and it consists of a plan of action designed to achieve a particular goal for the victory of battles in the war. Initially, a book from China, made by Sun Tzu, named The Art of War has introduced military strategies in ancient times.
Later, the influence of military strategy spread into business for the purpose of winning business competitions by making plans to complete the objectives.2. Setup of the business mission and objectives.As in the home entertainment industry, we are a firm called “Home Tree”.The mission to the business can be shown in the following mission statement.Mission statement:”We are to provide entertaining experiences to every household by home media.”As a company in the home entertainment industry, the objectives to the business can be shown as:Corporate objectives:- Financial objectives:(1) Quarterly growth of a realistically stable amount to the revenue from the profits of selling the home entertainment products.(2) Increasing dividends to our shareholders in the home entertainment industry.
– Strategic objectives:Increasing customer acknowledgements and reputation on the entertainment products we provided, by measuring market share of home entertainment, annually.- Functional objectives:Permanent qualify of DVD and CD products in manufacturing, both in internal contents, which can be enriched; and external appearances, which can be beautified.- Individual objectives:Reasoned and responded in devoting into providing elements of home entertainment, by happily and heartily serving customer needs.3. Identification of the stakeholders of the home entertainment industry and explanation of the significance of stakeholder analysis.
The stakeholders of the home entertainment industry can be shown as internal stakeholders, which are the managers and employees of Home Tree; connected stakeholders, which are bankers, suppliers who manufacturer DVD and CD product or studios of films, music and games; and external stakeholders, which can be identified as government and interest/pressure groups.The significance of analysis of these stakeholders “is for the development of knowledge and understanding about other organizations in the firm’s environment.” (Business Strategy 2004: 17) Which in our case, it is to develop knowledge and understanding about other organizations in the home entertainment industry.
4. Conduct of an internal and external environmental audit of Home Tree’s business in the home entertainment industry.- Internal environmental audit.It is a position audit which is “the part of the planning process which examines the current state of the entity.” (Business Strategy 2004: 45)(a) Analysis of SWOT.It refers to the analysis of strength, weakness, opportunity and threats in the home entertainment industry for Home Tree.SWOT of the home entertainment industry can be illustrated roughly as the table below:Strength- Cost advantage- Strong advertising- Better product qualityWeakness- Too narrow product lineOpportunity- Serving additional customer groups- Take market share from rivals- Expanding product lineThreats- Reduced buyer needs for productFrom the table above, the explanation can be seen as:Strength:(1) Cost advantage.There will be low cost of raw material as the cost of making DVD and CD products are relatively low than buying the original film strips.
(2) Strong advertising.Advertisements from Home Tree in the home entertainment industry will be influential for matching the needs of owning the films, music or games which are favored by consumers.(3) Better product quality.The quality of a product in the home video industry is not only focused on their appearances, like packaging, more importantly, what the product can bring is the adjustment of the quality of the product. For example, Home Tree has a product of home entertainment which is a DVD “container” of an Oscar winning Hollywood movie, customers who purchase the product is to see the high quality film on a DVD disc, rather than the quality of the disc itself. However, the new discs made must have the quality for stability of watching.
Weakness:It can be too narrow product line. This is because for home entertainment, depending on the ability of customers, there is not much hardware for them commonly. For instance, if Home Tree wants to fulfill the needs for music from its customers, the products can be CDs. However, if Happy House changes the products into the newly invented blu-ray disc, there will be too much cost and customers have nothing to listen to the blu-ray disc. Therefore, there are fewer choices left for product lines.Potential:(1) Serving additional customer groups.
These additional customer groups are not necessarily had to be those consumers who are appeared in retail stores. With the signed contracts, some DVD and CD products can be specifically distributed to some public areas, such as airplanes, day-care centers, and hospitals and so on, fulfilling entertainment requirements for those people in such places.(2) Take market share from rivals.
However, the market share can be taken from the rivals by providing high quality products.(3) Expanding product line.As previously mentioned, the product line in the home entertainment industry is narrowed; therefore, there are needs to expand it to be competitive in the market. The expansion method can be the different editions of the products. For example, a same movie can be made into several editions of DVD products: the original edition which is the original film, the special edition which includes another bonus DVD with special features and the director’s cut edition which expended the time lengths of the original film with the film scenes the director made and never before seen.Threats:It can be the gradually reduced customer needs for product.
For instance, when a new music album has just debut to the public, with promotion methods made, there are high expectations from customers. As a result, the initial price for the product could be high. However, when time flows, more and more people already listened to the album and, therefore, enthusiasm for the product decreases. Accordingly, the price of the product will be lower and lower through time.(b) Analysis of the value chain.
It refers to the analysis of capabilities, costs and resources.In the home entertainment industry, the value chain can be described as following:(1) Inbound logistics.It can be done by signing the contracts with film, music and game studios. The films, music and games they made will be handled and be stored for the next process.(2) Operations.
The films, music and games made is been released to certain manufactures according to the contracts between the film, music and game studio and the factory. Afterwards, it will be made into Film DVDs, CDs and Game DVDs respectively for the next process.(3) Outbound logistics.Distribute the DVDs and CDs made to the wholesaler or agents for their appearance on the shelves in stores.(4) Marketing and sales.Promotion activities will be made. For a DVD films, there will be introductions of the DVDs online to attract attentions.
For music CD albums, there will preview of the music in the stores and singers or composers of CD may perform various activities on spot or on TV to promote the album. For games, there may already be beta demo versions of the game released online free for playing. This is therefore a kind of promotion to have the game experiences for building up the sense of them in order to decide whether to make a purchase for customers.(5) Service.- External environmental audit.(a) Analysis of PESTOL.
It is to analyze social, political, regulatory and community factors.Political:In the political-legal environment, the organization operates with in a broad framework of laws. These laws could affect Home Tree in the following ways:1) The selling and marketing of goods restricted by laws on description of goods. For example, as the film re-released from cinemas to our DVD products, the British Board of Film Classification works to regulate the description on DVDs’ package according to the classification of the films. The film classification scheme by the British Board of Film Classification will be used for the description on the package of our products to be monitored by laws.2) Legislation on financial matters.Economic:As our products are not limited only within domestic areas, the international economic influence has to be considered.International economic influence “include economic growth rates, inflation, interest and wage rates, protectionism and economic agreements.” (Business Strategy 2004: 27)As it defined, for Home Tree, our DVD and CD products will beSocial-cultural:This is the determination of make-up of the population and the lifestyle of society to have understanding of demography, “the study of population and pupation trends” (Business Strategy 2004: 28), which inferences environment in the home entertainment industry.