Vsm Group: Examination of Strategic Position and Development of a Competitive Strategy

4519 Words May 15th, 2010 19 Pages
1. INTRODUCTION Johnson, Scholes and Whittington (2005, p. 9) define strategy as the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competencies with the aim of fulfilling stakeholder expectations. Strategy is therefore the long term direction of an organisation.

Strategic Management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organisation to achieve its objectives (David 1999, p. 9). Strategic management therefore focuses on the activities of the organisation that contribute to the achievement of organisational success. These
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3.1. PESTEL Political variables • Political stability in Sweden and the United States. • The prevalence of foreign trade regulations in the USA.

Economic variables • Decline in demand for sewing machines in past two decades. • Decline in industry profitability. • Low sales in respect of Pfaff within three years of acquisition. • High production costs in the German Pfaff plant. • Investment by Juki and other industry players into the US market.

Socio-cultural factors • Not using a consultant for the strategic planning weekend meeting made the strategy process unstructured and was a shift from the company’s way of doing things. • Encouraging participation in the strategy process by middle management through a series of seminars. • The adoption of the strategy document changed workers’ attitudes. The strategy document served as a guide on operational matters. The mission statement was frequently promoted in the company’s public relations. • Focus shift from technical features to customer satisfaction.

Technological variables • Extended support for business development to encourage retailers to carry the Husqvarna Viking product line exclusively. • Cooperation with Jo-Ann Fabrics & Crafts, a large retailer of fabrics with over a thousand stores throughout the USA, setting up small sewing machine outlets inside their fabric stores.
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