ASSIGNMENT COVER SHEET(to be completed by the student)

Student ID number: A 12428

Student name: Magalie Terry

Course name: DISTANT LEARNING MBA

Subject name: STRATEGIC MANAGEMENT

Subject facilitator:

No. of pages: 10

Word count: 1551

DECLARATION

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2

ASSESSMENT SHEET(to be completed by the examiner)

Student name: Magalie Terry

Course name: MBA

Subject name: Strategic Management

Assessor/marker:

COMMENTSPrinciples used (for example, number and understanding of concepts referred to, their influence on the structure of this paper, number and correct citations of references, use of appropriate jargon)   

/4

Application of those principles, that is, the analysis and evaluation of the example problem based on the principles, including the final recommendations and their justification

/8

How well the example problem was described, including the extent and depth of information (including the data) about it that was accessed

/4

Structure and presentation

/2

Style, grammar  and language

/2

Total Less penalties

GRAND TOTAL /20General comments

FOR MODERATOR’S USE ONLY

I agree with the assessor’s assessment I disagree with the assessor’s assessment and the new mark is as follows for the following reasons:

/20

Moderator:

Title: Strategic planning.

Assignment Topic:

Develop a mission statement of values and explain their appropriateness

Undertake an internal analysis of the organisation and an analysis of its external

environment using several appropriate tools like an industry five forces analysis

Craft strategies and explain their appropriateness.

Executive Summary   : The Strategic Planning of a laser distributor. The difficulties it faces

vis a vis subsidiaries and the elaborate market in which it competes at different levels in a

very diversified market. Yet it is possible to use the appropriate tools to craft a strategy and

show how different market have different issues

Introduction:

The existing company does not have a mission statement per say or a vision statement but it

does have some core values and goes by an Ethos that best describes the company. The

mission statement shows the stakeholders and the shareholders what XLASER (Fictitious

Name) does best and why they want to do it. It is focused brief and easy to remember. The

vision statement is to show how passionate this distributor is and both the statement

encapsulate the core values of the company.

MISSION STATEMENT- VISION STATEMENT- CORE VALUE STATEMENT:

Mission Statement:

Our aim is to share our clinical, technical and marketing expertise with all our partners in the

aesthetic industry by providing you with the most innovative Lasers/IPL platforms for the

optimal results in the most the most ethical way. We believe that in growing our market

share by 10% every year we will encourage our suppliers to stay at the forefront in delivering

the best product to your clinic and your patients.

Vision Statement:

We are passionate in helping the aesthetic clinics create the “New You” for their clients and

in doing so we empower our people to deliver our ethos “Products you know from people you

trust” for a many years to come.

Value Statement:

Innovation: Encourage creativity among our people who in turn will share it with our

customers.

Excellence: We are committed at every level of our value chain in delivering the best

Technical, Clinical Support. Training & after sales service are our expertise. We consider the

doctor and patients first.

Integrity: Follow & adhere to our ISO standards – TGA recommendations and act in a fair

and ethical fashion.

Respect: We recognise that we are all different and important to each other both within the

company and with our customers. Let us join forces to unite our strengths.

SWOT ANALYSIS – AESTHETIC MARKET

STRENGHTS

Unique Quality products from renowned suppliers

Small enough to adapt to changes

Strong clinical expertise

Well-resourced clinical data

Directors well respected (12 years in the industry)

Evidence Based devices in product portfolio

Medium size overheads

Good Technical support (three Engineers)

Differentiation in Technology-Clinical support &

technical Support as well as providing ROI to every

buyer and help with marketing material.

Marketing material for support already available

Incredible profit margins do not need to sell a great

quantity.

WEAKNESSES

Immature sales team with few skill sets

Difficult to focus due to wide product range

Weak market presence due to no great products for a

few years.

No clear strategic direction

Lack of follow-up post sales meetings

Poor market intelligence feedback

Sales Presence in New Zealand rare?

No service person in Vic or Qld

Directors lack of presence in market

Too many products / lack of focus

Retainer too high which does not encourage striving

for performance

No real culture in the organisation

High Transfer price from suppliers and no real

negotiating powers

No KOL programme

OPPORTUNITIES

Wider portfolio than competitors

Strength of the Australian dollar / better pricing

Impulse purchase (one decision maker)

Quick buying cycles/fast moving and competitive

industry

Substitute will complement not so much compete

High demand for these procedures

High ROI.

THREATS

Lack of government incentives/TGA ruling

Hard to maintain market share / marketing efforts

Lack of market intelligence i.e. installed base of

competitors

New Substitute

Natural Disasters such as Earthquake in NZ

Potential New Entrants with second-hand market and

cheap imports are on the increase

EXTERNAL ENVIRONMENT: XLASER has been affected by all the above forces and

stands to be threatened in the future.

Demographics: 35 -65 years captive audience for laser treatment as the Australian

population is ageing the end users may decrease.

Social: Invasive/Non-Invasive enhancement may not always be favoured. Doctors

concerned about beautician entering the market with lower cost offering.

Political, Legal and Regulatory Affairs: There is a strong push to bring in legislation to

regulate the industry. Also the TGA has relaxed the requirements for listing of aesthetic

lasers encouraging lower standards to cut prices. Banks are more reluctant to loan such high

risk investments...

Natural Environment: Natural disasters such as Christchurch Earthquake –market not yet

recovered - Insurances for laser procedures are on the rise.

Technological Factors: Fast pace industry for technology early adopters give a very short

window to operate.

Global Forces: While XLASER only exports to New Zealand still affected by exchange rate.

General Economic Conditions: Fortunately GFC or any financial downturn has a positive

response from the market they feel down and want to look better.

COMPETITIVE ENVIRONMENT :

Using Porter’s Five Forces Analysis:

The industry has Four Strategic Groups:

1. Skincare/Dermabraision: Costly to end- user but good ROI for the clinic.

2. Injectables: Again costly to the end-user but good ROI with little outlay to the clinic.

3. Non-Invasive Laser/IPLInterventions: Any age multiple use - longer term results costly to

the end user short term but not long term and large initial capital investment for the clinic

4. Invasive Laser/IPL Interventions: Any age multiple use - longer term results costly to the

end user short term but not long term and large initial capital investment for the clinic.

XLASER occupies the two last categories. While these technologies are in the higher price

bracket they are competitively valuable as they are unique, there are no such innovative

products among our rivals and they are difficult to copy because they have unique features

and hold strong patents. No substitute can replace the treatments they provide.

XLASER also offers a unique 3D Quantitative imaging system as part of the package to

complement our core value Doctors and Patients first.

However XLASERS had not performed well in the last three years prior to one of the bigger

supplier coming on board early last year. The primary stakeholders who are the doctors and

the Buyers don’t have a lot of experience with the company as they had old technology prior

and in some ways have had a poor image in the industry.

MARKET SHARE

CO

ST

&

QU

AL

ITY

The secondary stakeholders and indirectly also the Buyers are the end users; they have little

to no say in what their doctor use. One company such as FRX is a one product company and

has resorted to extensive advertising to the end users which has made the product become a

household name and has therefore increase their market share tremendously.

Suppliers: XLASER does not have a great bargaining power with its biggest supplier as it is

a new partnership and has not yet been successful enough. Prices are set.

New Entrants are a threat and will mostly be (1) cheap copies from Asia with little to no

clinical support (2) The second hand /refurbished market supplied by E-med, where cost has

eroded the ethics of good training and reliability.

At this stage XLASER sits in the very left corner of the Strategic Group Map and the Goal is

to move it towards the middle top quadrant. The reason for its lack of performance is mostly

due to a non-experience sales force.

Strategic Group Map

Adapted from Crafting & Executing Strategy Thompson/Peteraf/Gamble/Strickland

DC

PAL

CAND

HL

CUT

XLASERRR

FRXL

QMED

INJECTABLE FILLERS

BOTOX INJECTABLES

SKINCARE/DERMABRAISIO

NS

ROUND SHAPE = Subsidiaries OVAL SHAPES = Distributors SQUARE SHAPES = Substitutes

CRAFTING THE STRATEGIES:

We need exposure and a KOL programme short term so I would propose:

Blue Ocean Strategy with an Alliance

Differentiation:

We have many unique products so differentiation is our biggest advantage, however we really

need to have the exposure to rebuild our image and showcase what we can offer, hence the

following strategy to help this happen

Alliance: With the Fillers/Botox group. Non contractual people to people at a territory level,

synergistic effect to benefit both by using the imaging system in a quantitative way:

(1) The injectable company benefits as a sales tool to sell more when they demo.

(2) The doctor uses it to sell more procedures.

(3) XLASER increases its exposure by using the existing network that the injectable

representative has. Increase presence

This would also be repeated at conferences with an added non competitor contender “An

interior decorating company that enjoys a solid presence in this industry. What will this

do?

(1) Increase Air Time spent for the inexperienced reps.

(2) Unique value proposition with a vertical Integration for the doctors. One stop shop

(3) Build up our image with follow-up visits accompanied by upper management

(4) This would reduce the avenues for the rivals less air time.

(5) Pooling resources means less cost and attending more conferences.

Will the competitors retaliate? Sure but will lag by a year due to booking system at

conferences and they may need other ideas for Alliances.

To measure this implementation the sales representative will need to show follow-up call

rates and enter the leads on the ERP of the company. This I am sure will give us our 10%

increase by asking each representative to sell 1 system after each on the conferences. To be

or not to be a first mover?

References

(1) Charting your company’s future Harvard Business Review 80 No.6 June 2002

(2) Michael E Porter “How competitive Forces shape Strategy” Harvard Business Review

57, no2 (March April 1979

(3) Barney J.B.(1991) Journal of Management 17 (1) 99-120

(4) Chi. T. (1994) Trading in Strategic Resources Strategic Management Journal 15, 271-

290

(5) Coopers and Lybrand (1997) “Strategic Alliances” Coopers and Lybrand Barometer

Spring.

(6) http//:www.allianceanalyst.com (11th November)