Strategic Management Theory and Practices

Question: Discuss about the Strategic Management Theory and Practices. Answer: Introduction The topic of strategic management has evolved to be one of the most crucial necessity and a decision making aspect in the modern business world. In addition to building up capabilities, organizations have increasingly undertaken modernization of the structural framework as well (Paul, 2014). Every other enterprise, irrespective of their types faces a higher amount of competition. In order to survive and fulfil target effectively, managers focus on integrating strategy changes in the business. This particular project takes into consideration the case of National Australia Bank (NAB) and its situations of failures over the bygone years. Reviewing the news it can be seen that the bank had been confronted with strategic management issues thereby directly relating to a financial breakdown in the year 2015 2016 (Moutinho, 2016). In addition to a theoretical perspective, a practical strategy and management enhancement approach has also been included in the essay. Discussion According to Bramble (2015), unlike every other business sectors, the Australian banking segment tends to be highly attractive in nature. Over the years, entrepreneurs have increasingly tends to develop initiatives in the profitable sector. Based on a Porter`s five force analysis is can be inferred that apart from a high degree of rivalry, there exists a moderate level of entry scopes in the industry. Further, apart from a high threat of substitutability, the section provides a medium bargaining power to the customers and suppliers. It is noted that presence of various banking firms not only leads to a forces the management of NAB to build up competitive advantage factors, but also increasingly focus on developing strategic concerns as well (Pais Stork, 2013). Concerning a resource based view, there exists various internal strengths of the firm which help it to win over opportunities and mitigate weaknesses. In addition to a large brand name and awareness, the organization provides the people with a diversity of financial services. Further, it is the large assets and revenue generation capabilities of the firm which enable it to eradicate business limitations. Being among the leaders of the nation, NAB has a taskforce of highly skilled and experienced individuals. Apart from focussing on increasing revenue growth, the managers tend to fulfil socio-cultural need of the differentiated stakeholder groups as well. Additionally, the heightening of sustainability concerns in the bank also acts as a helping hand towards developing competitive advantage factors. As compared to industry attractiveness, the core competencies help in building up competitive advantage factors. As stated by Turner (2014), it is noted that a rise in capabilities not only leads to achieving of tangible as well as intangible targets but also helps the NAB in ensuring a higher performance level over its rivals, thereby supporting strategic management. It is noted that NAB has a higher response to competencies than the increased attractive nature of the industry (Parham, 2013). Moreover, in order to enlarge competitive advantage factors, the organization tends to enhance its potentialities and abilities as well. As per the case of National Australia Bank it can be seen that the organization has faced degrading situations over the past few years. Despite of growth in the early 1990`s when the bank entered into several agreements and joint ventures, the bank is confronted with some serious strategic failures (Moutinho, 2016). In addition to opening up core processing outlets and developing online competencies, the management focused on global expansion and strategy management aspects as well. However, the failure of NAB was not only due to internal irregularities, but also due to the fluctuating external factors. It is noted that the bank`s overseas expansion strategy did not stop after acquiring the Bank if New Zealand and Michigan National Corporation. Being recognized as the globe`s widest financial services firm, the management has access to a large pit of resources and thereby involved in organic strategy growth methods. As opined by Chiaramonte Casu (2013), the extensive operation of NA B forced the world to believe in its well developed competency levels and image of a global player. Despite of growth scopes, the bank faced a huge breakdown since the year 1999 after Argus abandoned the firm and disposed of the US based MNC to a Dutch banking organization. Further, selling of the several initiatives and cutting off from the United States provided a profit of billions and market the collapse of NAB`s global strategies (Moutinho, 2016). As per the case study, the over-extending process and an incomplete understanding of the market acted as the main reasons behind the degrading situations. On the other hand, the global economical crisis (2008) and poor judgement of business experts in the firm also affected the strategic failures (Featherstone, 2015). The worsening situations of GWB and GFC ultimately lead to a 42% drop in profit levels of the organization. Additionally, the caught up of Clydesdale in UK PPI scandal resulted to a $2.59 billion by NAB (2015). It is not ed that despite of being competitive and proficient in nature, the unplanned and incompetency acquisition strategy of the bank played a major role in the degrading situations. As per the case study, the poor management of business in NAB also tend to affect success of the international growth strategies. Lastly, the structural and strategy alteration of the bank with the appointment of Cameron Clyne (CEO) not only resulted in shifting of targets, but also huge losses on selling off the remaining parts of overseas acquisitions (Moutinho, 2016), which is why the problems could not be solved. Reviewing the degrading situations of National Australia Bank, there are various recommendations that can be made for it to regain its position in the market. Firstly, it is suggested that the bank tends towards reforming the strategy framework. It is important that the firm diversifies its policies into separate departmental levels and functions. An increase in core competencies will lead a consequent rise in profit margins as well. As stated by Moore (2016), the introduction of premier services, pre-approved products and product bundling will help to develop core competencies of NAB. Secondly, it is recommended that the bank undertakes relationship building and community based strategy for developing strategic management in Australia and later at an international level. It is important that the managers strengthen the company base at a domestic level first and then tend towards foreign expansion. Conclusion Analyzing the various aspects of the project, it can be inferred that the National Australia Bank has been confronted with certain degrading situations over the past years. It is noted that despite of being confronted with a variety of internal and external factors, the management tends to make the most of the availabilities and continuously adapt to the changing environment to ensure their position in the marketplace. Further, it is important that the organization undertake the recommended changes to ensure a rise in core competencies and strategic management. References Bramble, T. (2015). 16 State, capital, and class struggle in Australia.Globalization and Transnational Capitalism in Asia and Oceania, 244. Chiaramonte, L., Casu, B. (2013). The determinants of bank CDS spreads: evidence from the financial crisis.The European Journal of Finance,19(9), 861-887. Featherstone, T. (2015). Emerging directors: Avoid the pitfalls.Company Director,31(5), 54. Moore, A. (2016). FOREIGN CAPITAL INC.Review-Institute of Public Affairs,68(1), 62. Moutinho, L. (2016). National Australia Bank (Australia). InWoraldwide Casebook in Marketing Management(pp. 515-549). Pais, A., Stork, P. A. (2013). Bank size and systemic risk.European Financial Management,19(3), 429-451. Parham, D. (2013). Australia's productivity: past, present and future.Australian Economic Review,46(4), 462-472. Paul, E. (2014). Corporate State. 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