Strategy Formulation of Shan Foods

Strategy formulation of Shan Foods:
Strategy formulation is the first step of strategicmanagement process. Strategy formulation

ispositioning before action and it shows the effectivenessof an organization. Strategy formulation
is a process inwhich organization performs its internal and externalaudit develops the appropriate
strategies then thosestrategies implemented then evaluate. In short term forachieving
organization annual goals and in long runachieving its mission and vision statement.
Targets are defined from top then come to the bottom.Shan Foods makes their strategies under its
core values.The most prominent point in Shan Foods is that it isworking in equity base model.
Shan does not go forbank loans do not give ODI
s.
Shans financial year starts from July to June (next
year). Goals are defined in KRI (key resultindicators) and KPI (key performanceindicator).Shan
use balance score card forstrategy formulation because company need togrow in four prospective
(Financial, Internalbusiness processes, Learning and growth,Costumer) from mid of April every
departmentmakes its target discuss with higher then lock atthe end of July, then targets lock in
performance management. Strategies come from top andachievements come from bottom.Shan
foods are export based company its products are not customized but packaging are
customizedaccording to the needs and demands of the people living worldwide. Shan is ISO
14000; ISO 9000certified and are going for ISO 2000 certification, so it needs to maintain its
quality all over the world.
Shans primary key motivator is that it is successfully working in equity base model.
PORTERS FIVE
FORCESMODEL FOLLOWED BY SHAN FOODS
According to Porter, strategies allow organizations to gain competitive advantage from three
differentbases; cost leadership, differentiation and focus. Porter calls these bases generic
strategies
In our quest for Shans generic strategies, we came to know the following:
THREAT OF NEW ENTRANTS
The Mehran Spices Company is a threat to Shan foods because they have recently entered into
Pakistaniand international markets.
BARGAINING POWER OF BUYERS
The power of buyers is the impact that customers have on a producing industry. In general, when
buyerpower is strong, the relationship to the producing industry is near to what an economist
terms amonophony- a market which has many suppliers and one buyer.
BARGAINING POWER OF SUPPLIERS
The prices of raw materials required for production process depend upon the season whether they
areavailable or not. If the required materials are out of season, the suppliers demand high price.
The pricealso depends upon influence of inflation in the country.
THREAT OF SUBSTITUTE PRODUCT OR SERVICES
Different companies offer similar range of products like Shan. When Shan launched their new
range of Delve Desserts, Rafhan, and another FMCG company started a strong advertising
campaign to grab theattention of consumers.
RIVALRY AMONG EXISTING COMPETITORS
There is always a chance of business rivalry among competitors. For e.g. other companies make
advertisement in which they degrade other similar products. Shans major rivals are National
foods,
Rafhan foods and Mehran spices.
Strategy Implementation process of Shan Foods:T
he strategic management process does not endwhen the firm decides what strategy or strategies
topursue. There must be a translation of strategicthoughts into strategic action. This translation is
mucheasier if managers and employees of the firmunderstand the business and feel themselves as
a partof the company. Through their involvement, strategiescan be effectively implemented,
helping theorganization succeed. Implementing strategy effects theorganization from top to
bottom; it affects all thefunctional and divisional areas of the business. Thepurpose and scope of
this text is to examine thebusiness administration concepts and tools important instrategy
implementation.Even the most perfect strategic plan will serve little purpose if it is not properly
implemented. Manyorganizations tend to spend a considerable amount of time, money and effort
on developing strategicplans, treating the means and circumstances under which it will be
implemented. Change comesthrough implementation and evaluation, not through the plan. A
technically imperfect plan that isimplemented well will achieve more than the perfect plan that
never gets off the paper.At Shan, strategy implementation is as important as strategy formulation.
The strategic plans are strictlyfollowed, implemented and evaluated. Effective strategy
formulation, implementation and control are
the three basic pillars of Shan groups success story. Also, the policy of Shariah compliance is
strictl
yfollowed in every department of the organization, whether it is finance, marketing, production
etc. Weinterviewed the officials at Shan and learned many of their insights of strategy
implementation
PROCEDURE FOR STRATEGY IMPLEMENTATION
Any decision taken is conveyed to the COO. The COO conveys and designates work
responsibilities to theHead of different departments (HODs). Relevant information and
responsibilities flow down to relevantdepartments. The HODs further divide responsibilities and
functions to managers of departments. Themanagers convey and make sure the work is done and
strategy is implemented at even the lower mostlevel.In this way, responsibility flows from top to
bottom. The workers report to their managers, the
managers report t
o HODs, the HODs report to the COO and the COO is answerable to board of Directors.
ORGANISATIONAL CULTURE, SUPPORTIVE TO STRATEGIES
When asked question about the supportiveness of organizational culture, the Manager HR said
that it issupportive yes because no goal can be achieved without team work, co-ordination and
support of employees. So, the culture inside the organization has to be supportive and friendly so
that all of thepersonnel can work efficiently.
MANAGEMENT OF CONFLICTS
Before and during the implementation of decisions, conflicts of interest and opinion arise. The
firmconducts awareness sessions for employees, they tell them about the benefits that change
will bring tothem and to their organization. For management of conflicts, influencing power is
also essential.
ALIGNMENT OF CORPORATE STRATEGIES WITH POLICIES
When asked a question whether corporate strategies align with the policies, the official
responded inpositive. He answered that without alignment and relevance of policies and
strategies, the organizationcannot grow and prosper
.

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Strategy formulation of Shan Foods:

Strategy formulation is the first step of strategicmanagement process. Strategy formulation

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