QUESTION 1 Investopedia defines strategic management as the management of an organization’s resources to achieve its goals and objectives. The process involves setting objectives, analysing the competitive environment, analysing the internal organization, evaluating strategies, and ensuring that management rolls out the strategies across the organization. Strategic management can also be defined as a bundle of decisions and acts which a manager undertakes and which decides the result of the firm’s performance (Strategic Management Meaning and Important Concepts (managementstudyguide.com). Managers must have a thorough knowledge and analysis of the general and competitive organizational environment so as to take right decisions. According to Strategic management - Wikipedia, strategic management provides overall direction to an enterprise and involves specifying the organization's objectives, developing policies and plans to achieve those objectives, and then allocating resources to implement the plans. Strategy formulation, strategy analysis and strategy implementation are the three pillars of strategic management which are designed to provide a strong foundation for any organization, being the three key areas of focus that can help drive and achieve long-time success. When management in a business addresses all the three pillars in a balanced way, they can create sustainable frameworks for growth and profitability for their organizations as well as competitive advantage while remaining agile in an ever-changing marketplace. Strategic management is a continuous process that requires a careful balance of these three pillars. It is not enough to just formulate good strategies; they must also be effectively implemented. And to do this, a thorough strategic analysis is necessary. It is therefore undeniable that all three pillars of strategic management are of equal importance to the longtime success of organizations, as they complement each other. Strategy formulation is an integral part of strategic management, as it helps in framing effective strategies for the organization, to survive and grow in the dynamic business environment. It is on this pillar of the strategic management process that long-term organizational goals and objectives are established. Strategic decisions can then be taken once the organizational objectives are determined. The process involves using available knowledge to document the intended direction of a business and the actionable steps to reach its goals. Formulation of strategy ends with a series of goals or objectives and measures for the organization to pursue. Managers who formulate effective strategies allow their organizations to share one clear vision, catch biases by examining the reasoning behind goals, and track performance with measurable key performance indicators. The formulation of strategy forces organizations to examine the prospect of change in the foreseeable future and to prepare for change rather than to wait passively until market forces compel it. Strategic formulation allows the firm to plan its capital budgeting. Companies have limited funds to invest and must allocate capital funds where they will be most effective and derive the highest returns on their investments (Strategy Formulation - benefits (referenceforbusiness.com)). On the other hand, a firm without a clear strategic plan gives its decision makers no direction other than the maintenance of the status quo. The firm becomes purely reactive to external pressures and less effective at dealing with change. In highly competitive markets, a firm without a coherent strategy is likely to be outmaneuvered by its rivals and face declining market share or even declining sales. For a business, there are different crucial steps to walk through when deciding on a strategy so that it takes everything into consideration. For example, a business may conduct a strategic formulation for the coming business year with the goal of increasing profit and lowering costs. In this case, it will be important for the business to consider what action will likely lead the business in the right direction. For certain organizations, strategy formulation isn’t just about doing well, it’s also about doing good for the community. In one of the best examples of strategy formulation and how it can shape a brand’s identity, Unilever’s Lipton brand decided to reorient its strategy around manufacturing sustainable tea. Not only did this decision to become more environment-friendly make Lipton a popular choice with environmentally conscious consumers but it also gave the brand an edge in a way its competitors couldn’t have anticipated (Ionescu-Somers, 2013). Sports manufacturing giant Nike provides a different example of strategy formulation. In the early 2010s, Nike was beginning to lose its lead in endorsements among footballers, with competitors like Adidas and Puma catching up. To ensure that Nike retained its appeal, the organization decided to cross-endorse, that is use an athlete from one sport to promote merchandise for another sport. Their first choice was legendary basketball player Michael Jordan, with whom Nike launched the Air Jordan line of football kits and apparel. French football club Paris Saint-Germain (PSG) were the first to join the Air Jordan bandwagon, which not only steered NIke clear of its rivals but also provoked interest among millions of Jordan fans about football and PSG (Strategy Formulation Process - Harappa). Strategic analysis is a critical component of strategic management in that it helps identify strategic issues and provides insights for developing effective strategies that align with the organization's goals and the business environment. This effectively helps to make informed decisions. Strategic Analysis pillar focuses on understanding the internal and external factors that affect an organization's performance and its ability to achieve its goals. It involves conducting a thorough analysis of the organization's environment, both internal and external. The aim is to identify strengths, weaknesses, opportunities, and threats (SWOT analysis). Internal analysis involves analyzing the organization's resources, capabilities, and core competencies. It helps to identify the strengths and weaknesses of the organization while External analysis involves analyzing the organization's macro-environment (political, economic, social, technological, environmental, and legal factors) and industry environment (competitors, customers, suppliers, market trends) and other external factors that may impact the organization's strategy (Sammut, et.al, 2014) For example, undertaking a strategic analysis on Apple Inc, using the SWOT analysis we realize that the organization’s strength lies in the fact that it is one of the most recognized and valuable brands in the world well known for its innovative products such as the iPhone, iPad and Mac. Apple’s products command high prices, which leads to the organization earning high profit margins. Even though the brand calls for the strong pockets in terms of disposable income, the organization has a very loyal customer base which contributes to consistent sales (Khan, et.al, 2015). The weaknesses lie in the brand’s products which are often more expensive than competitors, which can deter price-sensitive customers. Apple’s significant portion of revenue comes from the iPhone, leading to dependence on a single product which can be risky. The brand has significant potential for growth in emerging markets such as India and China, while diversifying its product portfolio to reduce dependence on the iPhone (Yie, et.al, 2021). Intense competition from other brands such as Samsung can reduce Apple’s market share leading to reduced revenue. Economic downturns can also impact consumer spending thereby reducing sales. Strategic analysis can also be used to evaluate the performance of current strategies, informing necessary adjustments or changes. By identifying potential threats and weaknesses, strategic analysis aids in risk management, helping organizations to prepare for and mitigate potential risks. Strategic implementation involves putting the formulated strategies into action. This includes designing the organization's structure and control systems, developing the organization's culture and leadership, and managing the organization's resources and processes. The aim is to ensure that the strategies are effectively executed, and the strategic objectives are achieved. Implementation aids in the effective allocation of resources. When the strategies are implemented, organizations can ensure that resources are used efficiently and effectively by aligning the organization's structure, processes, and resources to support the strategy. The importance of strategic implementation is also seen to aid with change management as it helps in the smooth transition from the current state to the desired state. Effective communication, leadership, and coordination are crucial in this pillar to ensure that the strategy is effectively executed throughout the organization. When strategies are implemented, organizations attain a competitive advantage which can help them stay ahead of their competitors. Another importance of strategic implementation is facilitation for performance measurement; organizations can track their progress and measure their performance against the set goals. Coca Cola, one of the world's leading beverage companies, has a robust strategy implementation process. The organization’s strategy implementation is a continuous process that requires constant monitoring and adjustment. It is a key factor in the company's success and its ability to maintain its position as a leader in the beverage industry. In 2004 and 2005, Coca-Cola Enterprises(CCE) implemented ORTEC's vehicle-routing software. This software is imperative to CCE, as the growth and competitive nature of the beverage industry requires companies to optimize product delivery. As part of this implementation, over 300 CCE dispatchers use the software daily to plan the routes of about 10,000 trucks. The ORTEC software has helped CCE with its daily vehicle-routing problems.ORTEC’s objective is to help CCE assign all the delivery orders in the correct trip sequence, so that they are carried out by available vehicles at the lowest possible cost. CCE has been very successful with the new implementation. They have met the objectives of the project and recognize an average annual cost savings of $45 million per year as well as improved their customer service(Elijah.,2018). In conclusion, these three pillars of strategic management are interconnected and iterative. Strategic analysis provides the foundation for strategy formulation, and strategy implementation is guided by the formulated strategy. Regular evaluation and feedback loops are essential to assess the effectiveness of the strategy and make necessary adjustments. Strategic management is an ongoing process that requires continuous monitoring, learning, and adaptation to ensure the organization remains competitive and achieves its longterm objectives. Sources: 1. Ionescu-Somers, A., 2013. Embedding sustainable entrepreneurship in companies: The eternal internal challenge. In Sustainable Entrepreneurship: Business Success through Sustainability (pp. 177-189). Berlin, Heidelberg: Springer Berlin Heidelberg. 2. Strategy: Formulation, implementation, and control JM Higgins - 1985 - Dryden Press 3. Khan, U.A., Alam, M.N. and Alam, S., 2015. A critical analysis of internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), pp.955-961. 4. Yie, C.E., Zhi, C.E. and Ping, N.T.S., 2021. A Critical Analysis of Internal and External Environment: Case Study of Apple Inc. Journal of International Business and Management, 4(10), pp.01-14. 5. Tilak Naik G, Vaikunth Pai T. A Study on Products and Services of Apple Inc. 6. Pickton, D.W. and Wright, S., 1998. What's swot in strategic analysis?. Strategic change, 7(2), pp.101-109. 7. Sammut-Bonnici, T. and Galea, D., 2014. SWOT analysis. 8. Banutu-Gomez, Michael Ba. "Coca-Cola: International business strategy for globalization." The Business & Management Review 3, no. 1 (2012): 155. 9. Guo, Xueyao, and Manyu Wen. "Research on Competitive Strategy of Coca-Cola Company." 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021). Atlantis Press, 2021. 10. Elijah, A.B. and Millicent, A.D., 2018. The impact of a sustainable competitive advantage on a firm’s performance: Empirical evidence from Coca-Cola Ghana limited. Global Journal of Human Resource Management, 6(5), pp.30-46. QUESTION 2 Porter's Diamond Model is a framework that helps understand the competitive advantage some nations or industries possess due to certain factors available to them. The model was created by Michael Porter who identified four mutually reinforcing factors that shape the competitive advantage which are factor conditions, demand conditions, related and supporting industries, firm strategy, structure, and rivalry. If these conditions are favourable, domestic companies will continuously innovate and as a result, they will remain competitive internationally. On the other hand, unfavourable conditions will result in the inability of these companies to compete globally. Factor conditions relate to the nation’s position in factors of production, such as labour, land, natural resources, capital or infrastructure required to compete in any industry. Countries can have an advantage because they are richly endowed with a particular natural resource. For example, countries with plentiful oil resources can generally produce oil inexpensively. Saudi Arabia is one of the world’s wealthiest nations per capita and, through possession of a large share of the world’s oil resources, an economic power. Because Saudi Arabia produces oil very cheaply, it holds a comparative advantage in oil. The country is the largest oilexporting country in the world and one of the twenty largest economies in the world. The money from trading in oil has increased government revenues, ownership of foreign assets and provided the kingdom with the financial capital to invest in industrial plant and information and communication technology (ICT) infrastructure and to attract skilled people to help develop a modern infrastructure (Shirazi et al., 2018). The largest industry sector in Germany is the automotive industry, with the country being the primary location for innovative car manufacturers and suppliers such as BMW, Audi, Volkswagen and Mercedes. The German automotive industry benefits from a strong industrial core, first-class infrastructure, a highly-skilled workforce and cutting edge research and development. According to the Porter Diamond Model, having a general workforce that is high school or even college educated does not constitute a competitive advantage. A nation’s workforce must be highly specialized in an industry’s particular needs in order to become competitive in the industry. One of the factors underlying the German success is that the workforce is created. German students benefit from the country’s dual system of education where they combine vocational education with apprenticeships. This type of education supplies the country with a steady flow of highly skilled workers (Achieve competitive advantage with the Porter Diamond Model - BRAND MINDS). Other countries, such as Singapore, are rich in their human resources. With no natural resources to rely on, Singapore has embraced people as its most important asset. Over decades, it has invested heavily in education, skills and training, topping the World Bank’s 2018 Human Capital Index. Its students consistently perform the best globally in numeracy and literacy skills, and its teaching models are the envy of the world (What makes Singapore the most competitive country in the world? (asialinkbusiness.com.au)). Being rich in human capital means that the country has created factor conditions that foster the establishment of a skilled labor force. The nation has created excellent infrastructure and a solid scientific knowledge base. These created factors are much more important than naturally occurring factors as they ensure the country’s competitive advantage over the long term (Singapore's competitive advantage | Singapore Business Review (sbr.com.sg)). Countries can invest in improving their factor conditions such as infrastructure, skilled labor, resources, and technology. For example, a country with a large pool of skilled labor can attract businesses that require such skills. Demand conditions consider the nature of home demand for the industry’s product or service. Local demand has a sizeable effect on how well industries within a certain country do. While a larger market can present more challenges, it also creates opportunities for businesses within that industry to grow and flourish. The constant demand from local customers will push companies to grow, innovate, and improve quality. This can also lead companies to venture beyond their borders and compete internationally. Amazon is leading the eCommerce industry in the US and worldwide. According to recent industry figures, Amazon is the leading eCommerce retailer in the United States with 38,7% share of retail eCommerce sales (Top 10 US Companies, Ranked by Retail Ecommerce Sales Share, 2020 (% of US retail ecommerce sales) | Insider Intelligence). The company’s focus on customer satisfaction makes it successful on both domestic and international markets. Every product and service developed by Amazon is designed to delight customers and build a system around true customer obsession. Average annual spending of Amazon Prime members is estimated at $1,400 (Jeff Bezos: 8 business lessons from his letters to shareholders - BRAND MINDS). Denmark leads the field in cleantech innovation drivers and evidence of commercialized cleantech innovation, and also scores highly in fostering emerging cleantech companies (Denmark Tops Global Cleantech Innovation Index 2017 (stateofgreen.com)). The country’s energy transformation started in the 1970s when the country faced a severe energy crisis which left Denmark crippled. In just a few decades, the country veered from fossil fuels to clean energy. According to Wikipedia, in 2015, Denmark produced 42% of electricity from wind, up from the 2014 record of 39% of total power consumption. For the month of January 2014, that share was over 61%. Countries can stimulate local demand through various means such as encouraging innovation, improving consumer awareness, and implementing favorable policies. A sophisticated domestic market is a powerful driver for improving product quality and innovation. Related and supporting industries refer to the presence or absence in the nation of supplier industries and related industries that are internationally competitive. The presence of related and supporting industries provides the foundation on which the focal industry can excel. An industry cannot grow without a supporting ecosystem that can provide technology and spare parts. As the industry grows more complex, this support is paramount. The supporting industries offer innovations and motivations for upgrading of components, materials, and processes (Brosnan, Doyle & O’Connor, 2016). Companies are often dependent on alliances and partnerships with other companies in order to create additional value for customers and become more competitive. Especially suppliers are crucial to enhancing innovation through more efficient and higher-quality inputs, timely feedback and short lines of communication. A nation’s companies benefit most when these suppliers themselves are, in fact, global competitors. For example, the way in which Apple selects and manages its suppliers is an important factor in the company's success. According to their website Apple has 334 suppliers in China, 131 in Japan, 73 in the USA, 36 in Taiwan, 34 in South Korea, including notable first tier suppliers such as Samsung, Toshiba and Foxconn, the latter which gained recognition as an assembler of iPhones. Among these suppliers are hundreds of second-and third-tier companies that supply to the big names on behalf of Apple. Apple controls nearly every part of this complex network, leveraging its scale and clout to get the best product at the best price in time to the consumer. Apple benefited widely from the existence of highly capable suppliers who not only manufactured parts, but also supplied the company with innovative products that spurred growth. Therefore, a supporting ecosystem is critical to any industry’s success, for without it, other companies in other countries will surely steal the show (Sadashiv, 2022). Firm strategy, structure and rivalry refer to the conditions in the nation governing how companies are created, organized, and managed and the nature of domestic rivalry. Porter suggests that the strategy of firms, the structure of industry and the rivalry have effects on the competitiveness of the sector. Firm strategy, structure and rivalry get hold of the hardiness of home competition. Whether a sector is extremely competitive domestically will affect the rise in productivity required to compete internationally. The effects of global economic integration have shifted the competition between companies from pricing to branding, which refers not only to the economic strength and market reputation of the companies but also to the whole industry’s international competitiveness. Therefore, the level of investment in research and development activities, independent product design, and strengthening the talent pool have an effect on building a company’s brand and strategy (Guan, Xu, Jiang & Jiang, 2018). In France, the luxury goods industry is highly competitive. With pressure from competitors, online sales increase and technology disruption, Louis Vuitton’s business strategy is to grow through acquisitions. The brand is part of the LVMH, the world’s largest conglomerate which came to be in 1987 when Louis Vuitton merged with champagne and cognac producer Moët Hennessy. The LVMH group contributed €24 billion to France's global trade in 2021 and hired 15,000 people in the country in 2022, becoming the top recruiter nationally (Record results for the French luxury industry | La French Fab, the Fabulous French Industry! (lafrench-fab.com)). Countries can encourage competition and the formation of effective business strategies through regulations and policies. 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