processes of Strategic Management

<General Instructions/information for the students for completing the assignment>

Answer all questions.
Deadline of submission: 08/06/2020
The marks received on the assignment will be scaled down to the actual weightage of the
assignment which is <50> marks
Formative feedback on the complete assignment draft will be provided if the draft is
submitted at least 10 days before the final submission date.
Feedback after final evaluation will be provided by 21/06/2020

Module Learning Outcomes
The following LOs are achieved by the student by completing the assignment successfully
1) Explain the differing perspectives and theories that contribute to the processes of Strategic
2) Understand and integrate a range of contemporary issues within the strategic management field
and their influence on the strategic decision making process.
3) Apply critical analytical processes, both qualitative and quantitative, within complex business
environments to develop cogent perspectives/ arguments.
Assignment Tasks
Case Study – This question is compulsory and MUST be attempted
The following information should be used when answering the provided questions below:-
1 Introduction
Belaria Shoes was formed by two brothers who were passionate about diversity in cultures existing in Italy in
early 1970s. At this time, the country was undergoing a period of rapid industrial growth and many companies
were established that paid low wages and expected employees to work long hours in dangerous and dirty
conditions. Workers lived in poor housing, were largely illiterate and had a life expectancy of less
than forty years.
The Belaria brothers held a set of beliefs that stressed the social obligations of employers. Their beliefs guided
their employment principles – education and housing for employees, secure jobs and good working conditions.
Belaria Shoes expanded quickly, but it still retained its principles. Today, the company is a private limited
company whose shares are wholly owned by the Belaria family. Belaria Shoes still produce footwear in
Petatown, but they now also own almost one hundred retail shops throughout Italy selling their shoes and

Module Code: BUSS 1009Module Name: Strategic Management
Level: 3Max. Marks: 100 Scaled down to 50

boots. The factory (and surrounding land) in Petatown is owned by the company and so are the shops, which
is unusual in a country where most commercial properties are leased. In many respects this policy reflects the
principles of the family. They are keen to promote ownership and are averse to risk and borrowing. They
believe that all stakeholders should be treated fairly. Reflecting this, the company aims to pay all suppliers
within 30 days of the invoice date. These are the standard terms of supply in Italy, although many companies
do, in reality, take much longer to pay their creditors.
The current Belaria family are still passionate about the beliefs and principles that inspired the founders of the
Recent history
Although the Belaria family still own the company, it is now totally run by professional managers. The last
Belaria to have operational responsibility was Jock Belaria, who commissioned and implemented the last
upgrade of the production facilities in 1991. In the past five years the Belaria family has taken substantial
dividends from the company, whilst leaving the running of the company to the professional managers that
they had appointed. During this period the company has been under increased competitive pressure from
overseas suppliers who have much lower labour rates and more efficient production facilities. The financial
performance of the company has declined rapidly and as a result the Belaria family has recently commissioned
a firm of business analysts to undertake a SWOT analysis to help them understand the
strategic position of the company.
SWOT analysis: Here is the summary SWOT analysis from the business analysts’ report.
Significant retail expertise: Belaria Shoes is recognized as a successful retailer with excellent supply systems,
bright and welcoming shops and shop employees who are regularly recognized, in independent surveys, for
their excellent customer care and extensive product knowledge.
Excellent computer systems/software expertise: Some of the success of Belaria Shoes as a retailer is due to its
innovative computer systems developed in-house by the company’s information systems department. These
systems not only concern the distribution of footwear, but also its design and development. Belaria is
acknowledged, by the rest of the industry, as a leader in computer-aided footwear design and distribution.
Significant property portfolio: The factory in Petatown is owned by the company and so is a significant amount
of the surrounding land. All the retail shops are owned by the company. The company also owns a disused
factory in the north of Italy. This was originally bought as a potential production site, but increasingly
competitive imports made its development unviable. The Petatown factory site incorporates a retail shop, but
none of the remaining retail shops are near to this factory, or indeed to the disused factory site in the
north of the country.
High production costs: Italy is a high labor cost economy.
Out-dated production facilities: The actual production facilities were last updated in 1991. Current equipment
is not efficient in its use of either labor, materials or energy.
Module Name Strategic Management (BUSS1009) – Semester – Spring 20 – CW 1 (Assignment) –
Session D – QP
MEC_AMO_TEM_034_01 Page 3 of 10
Restricted internet site: Software development has focused on internal systems, rather than internet
development. The current website only provides information about Belaria Shoes; it is not possible to
buy footwear from the company’s website.
Increased consumer spending and consumerism: Despite the decline of its manufacturing
industries, Italy remains a prosperous country with high consumer spending. Consumers
generally have a high disposable income and are fashion conscious. Parents spend a lot of money
on their children, with the aim of ‘making sure that they get a good start in life’.
Increased desire for safe family shopping environment: A recent trend is for consumers to prefer
shopping in safe, car-free environments where they can visit a variety of shops and restaurants.
These shopping villages are increasingly popular.
Growth of the green consumer: The numbers of ‘green consumers’ is increasing in Italy. They
are conscious of the energy used in the production and distribution of the products they buy.
These consumers also expect suppliers to be socially responsible. A recent television programme
on the use of cheap and exploited labor in Ethiopia was greeted with a call for a boycott of goods
from that country. One of the political parties in Italy has emphasized environmentally
responsible purchasing in its manifesto. It suggests that ‘shorter shipping distances reduce
energy use and pollution. Purchasing locally supports communities and local jobs’.
Cheap imports: The lower production costs of overseas countries provide a constant threat. It is
still much cheaper to make shoes in Ethiopia, 4000 kilometres away, and transport the shoes by
sea, road and train to shops in Italy, where they can be offered at prices that are still significantly
lower than the
footwear produced by Belaria Shoes.
Legislation within Italy: Italy has comprehensive legislation on health and safety as well as a
statutory minimum wage and generous redundancy rights and payments for employees. The
government is likely to extend its employment legislation programme.
Recent strategies
Senior management at Belaria Shoes have recently suggested that the company should
consider closing its Petatown production plant and move production overseas, perhaps
outsourcing to established suppliers in Ethiopia and elsewhere. This suggestion was immediately
rejected by the Belaria family, who questioned the values of the senior management. The family
issued a press release with the aim of re-affirming the core values which underpinned their
business. The press release stated that ‘in our view, the day that Belaria Shoes ceases to be a
Module Name Strategic Management (BUSS1009) – Semester – Spring 20 – CW 1 (Assignment) –
Session D – QP
MEC_AMO_TEM_034_01 Page 4 of 10
Petatown company, is the day that it closes’. Consequently, the senior management team was
asked to propose an alternative strategic direction.
The senior management team’s alternative is for the company to upgrade its production
facilities to gain labor and energy efficiencies. The cost of this proposal is $37·5m. At a recent
scenario planning workshop the management team developed what they considered to be two
realistic scenarios. Both
scenarios predict that demand for Belaria Shoes’ footwear would be low for the next three years.
However, increased productivity and lower labor costs would bring net benefits of $5m in each
of these years. After three years the two scenarios differ. The first scenario predicts a continued
low demand for the next three years with net benefits still running at $5m per year. The team
felt that this option had a probability of 0·7. The alternative scenario (with a probability of 0·3)
predicts a higher demand for Belaria’s products due to changes in the external environment.
This would lead to net benefits of $10m per year in years four, five and six. All estimated net
benefits are based on the discounted future cash flows.
Question One
Using academic principles and examples from the above case, assess the following concepts:-
(a) Strategy (15 marks)
(b) Strategic planning (15 marks)
(c) Strategy development. (20 marks)
Question Two
Belaria shoes wishes to develop a strategy for guiding its operations in future.
(a) Classify and examine the main factors which are likely to shape and influence the values
and strategy of the above organization? (25 marks)
(b) Discuss the likely problems with mergers as a means of external growth. (25 marks)
Module Name Strategic Management (BUSS1009) – Semester – Spring 20 – CW 1 (Assignment) –
Session D – QP
MEC_AMO_TEM_034_01 Page 5 of 10
Rules & Regulations:
<Below given are only suggestive. It may be edited as per the needs of the assignment/module>

All resources should be cited using CU Harvard style.
The final assignment must have a Title page, Table of Contents, References/ bibliography using
CU Harvard Style and page numbers.
Title Page must have Assignment Name, Module name, Session, your name, ID, and the name of
the faculty.
Softcopy in word format is to be submitted through Turnitin link on Moodle.
Viva will be conducted after the assignment submission as per the dates informed earlier.

<Below given guidelines are only suggestive. It may be edited as per the needs of the assignment/module>

Assignment must be computer typed.

Font – Times New Roman
Font – Style – Regular
Font – Size – 12
Heading should be with Font Size 14, Bold, Capital and Underline.
Explain with suitable diagrams wherever required. Diagrams must be drawn using suitable
software or by pencil.
Each student has to do the assignment individually / Students have to do the assignment
collaboratively and each student should write a brief reflection on their contribution and learnings
from group work.
You can refer books in eLibrary or use internet resource. But you should not cut and paste material

from internet nor provide photocopied material from books. The assignment answers should be
in your own words after understanding the matter from the above resources.
Important Policies to be followed
1. Student Academic Integrity Policy*:
MEC upholds the spirit of academic integrity in all forms of academic work and any form of violation
of academic integrity shall invite severe penalty. Any benefit obtained by indulging in the act of
violation of academic integrity shall be cancelled.
All cases of violation of academic integrity on the part of the student shall fall under any of the below
mentioned categories:
1. Plagiarism
2. Malpractice
3. Ghost Writing
Module Name Strategic Management (BUSS1009) – Semester – Spring 20 – CW 1 (Assignment) –
Session D – QP
MEC_AMO_TEM_034_01 Page 6 of 10
4. Collusion
5. Other cases
If the student fails a module and has a proven case of academic integrity violation in this module, the
student is required to re-register the module. This is applicable to first and second offenders of
1. Plagiarism
A. First offence of plagiarism
I. If a student is caught first time in an act of plagiarism during his/her course of study in
any assignment other than project work, the student will be allowed to re-submit the
assignment once, within a maximum period of one week. However, a penalty of
deduction of 25% of the marks obtained for the resubmitted work will be imposed.

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