StilSim Strategic Formulation: Strategies for Growth

Introduction to Strategic Formulation

Strategy formulation is defined as the practice of developing an organizational strategy — a comprehensive plan intended to move an organization from its present position to the position it wants to achieve. A well-designed strategy aids an organization in attaining its optimal level of effectiveness in realizing its goals and objectives, while simultaneously allowing it to monitor its environment and adapt the strategy as needed (Ulwick, 1999). This paper undertakes a strategic formulation for StilSim and arrives at a recommended strategy by taking into account the internal and external analysis of the organization, along with generic and grand strategies. In addition, the BCG growth-share matrix is employed as a context for comparing strategic options.

Generic and Corporate Strategies

There are several strategic options addressed in the preceding internal and external analysis of StilSim. In the present situation, StilSim has a number of strategic options available for selection and implementation. These strategies are essential for the short-term and long-term success of the company. The sections below outline and explain the generic strategies, corporate strategies, and operational strategies that are available and ought to be implemented by the company.

Porter's generic strategies outline the manner in which a company attempts to attain a competitive edge across its selected market scope. There are three generic strategies, incorporating a focus on cost, differentiation, and focus. An organization makes the decision to attain a competitive edge either through lower costs compared to its rivals or by offering differentiated products and services that justify higher prices for consumers. In addition, a company opts to offer its products to selected market segments or across the industry to several market segments. Generic strategies reflect choices concerning both the type of competitive advantage and the market scope (Eldring, 2009).

The generic strategy considered most appropriate for StilSim is differentiation. The rationale for selecting this strategy is that the organization is missing out on a significant number of consumers because it does not utilize social media and technology to advertise its products. For instance, a competitor (Don Wilson) has taken advantage of this weakness to gain a competitive edge over StilSim. This generic strategy is fitting within the prevailing market dynamics. In the present era, technology is highly advanced and social media has become an integral aspect of any organization's success. By differentiating its product and service offerings, StilSim will be able to reach a larger, more proficient group of potential workers, expanding both the company's consumer base and its staffing capabilities.

One of the corporate level strategies that suits StilSim is merger and acquisition. One of the threats identified in the SWOT analysis of the company is direct competition. The strategy is to acquire Capital Staffing, a direct competitor. The acquisition of this rival company would benefit StilSim by providing greater access to a consumer base in terms of clients and recruitment candidates, while also attaining a greater market share. Furthermore, the increase in market share could support further expansion of the company.

The second strategy selected is financial performance improvement. This is a value-creating corporate strategy that focuses on transforming the company as a whole. The internal analysis of the company indicates that StilSim is currently experiencing financial difficulty. A lack of initiative and action across the entire organization risks making StilSim obsolete. Improvement of financial performance will ensure that StilSim regains the market share it has been losing to competitors. Moreover, poor management and inefficient utilization of the company's resources contribute to its poor financial performance, as evidenced by the declining return on assets (ROA) and return on equity (ROE).

Human resource management is also a value-creating corporate strategy that encompasses the whole organization. As indicated in the SWOT analysis, the productivity of StilSim begins with its personnel. It is imperative for the company's leadership to demonstrate to employees that it values both business operations and the workforce. Human resource management should be improved by increasing employee motivation through the provision of incentives such as rewards for good work. This increase in motivation and morale will improve the overall performance of the organization. A lack of proper and encouraging HR practices may be detrimental to the company's ability to grow and expand.

Operational Strategies

Operational strategies are the various approaches and tactics employed by a company to realize its goals and objectives. These strategies are essential elements for a business and provide backing for the company's corporate strategy. In developing operational strategies, a firm is able to assess and execute effective and efficient structures for utilizing resources, labor, and work processes (Hill et al., 2013).

StilSim has already lost a significant portion of its market share. One of the ways to regain greater market share is through the acquisition of Capital Staffing. This will not only reduce the level of direct competition but will simultaneously increase the company's market share.

The company has been experiencing losses owing to the lack of integration of technology and marketing into its business operations. The incorporation of social media would give the company greater reach and expand its consumer base. StilSim would also benefit from accessing a more proficient group of potential workers, strengthening both its consumer base and staffing capabilities. In addition, expanded marketing efforts will increase the company's reach to potential consumers and clients.

Employees play a critical role in the success of the business. Recently, poor performance has been linked to a lack of employee motivation and satisfaction. By providing incentives and increasing motivation and satisfaction, StilSim will benefit from improved overall organizational performance.

It is essential for the company to properly utilize its resources in order to improve financial performance. The declining ROA and ROE indicate poor management and ineffective use of assets and equity. Increased utilization of resources is necessary to improve financial performance and ensure that StilSim does not become obsolete.