Strategic Management Professional Development Plan

Question: Critically evaluate the underlying concepts and the theories of strategic management and the relationship between strategy, stakeholder aspirations and governanceDemonstrate understanding and awareness of current and emerging Economic, Political, Legal and Cultural factors and critically evaluate those which will have an impact on strategic management in an international contextFormulate business strategies in a systematic way , and develop criteria in order to evaluate and select those most likely to prove successful for a particular organisationDevelop plans for the implementation of a business strategies, presenting strategic proposals to stakeholders in a persuasive and authoritative manner. Answer: Report structure for professional development Introduction In the current study, I have discussed about some strategic goals of the organization Virgin Megastore. From the past few months, I have identified that the organization needs to monitor the strategic areas to control the operation as per the goals. Hence, I would take help from the module content to guide the changes that are required to achieve goals of the organization.I have observed that by launching a new product in the market, I could rearrange the sales target as per the requirements. In addition, I also realize that before extending the business in the global market, it is important to increase the products range. With the vast category of the products becomes easy to extend the market. In such context, the module content helps me to set the SMART objectives that I would align with my organizations strategic objectives. My SMART objectives stands for Specific, Measurable, Achievable, Realistic and Time Bounds. I have discussed the relevancy of objectives in the following dia gram. SMART Example Specific-Objectives are specific that say what I am supposed to do. Being a CEO of the company, I have realized I need to extend the products and service range. Thus, I am determined to launch a new product in the market. Measurable-I have the ability to measure whether or not I am meeting the objectives. I should discuss about the strategic plans with the boards of directors, managers. Hence, I would ask Finance department members to come up with the required budgets. Altogether, by a intensive discussion on every week, I will prepared the plan. Achievable-My objectives are completely achievable. By discussing the plan with the members on every week, board of directors, HRM members and employees at each level, I would proceed with the plan. After 6 months of discussion, I will proceed to execute the plan. Realistic-I would realistically achieve the objectives with the support and resource from the organization. The weekly and monthly meeting of 6 months is realistic. Carrying out plan usually require 6 months of discussion. In the plan, I will discuss about the market analysis, positioning, products and services, competitors and other segments of the marketing. Time-I could execute the plan within 1 year Within a year, I will complete executing the goals of launching the new product in the market. Table 1: SMART objectives The purpose of report is to increase the sales and lead the organization towards a particular direction. Moreover, by our developed organizational culture, we have communicated the purpose of increasing the sales. Thus, each individual in the organization is aware of the necessity of extending the product range. In addition, by accomplishing the plans I could also develop my professional skills. I understand being an effective Chief Executive offer is not easy. I need to gain the required skills and knowledge to hold the position and bring in the profit to the organization. I need to control the overall operation of the organization. Thus, I often think of implementing new ideas and plans to achieve both personal as well as professional goals. In this context, I need to implement an action plan to achieve my target. So that I could learn about my strength and weakness and organizational strength and weakness. How do I fit the design In this context, I would take help from Daft (2013), where I see how do you fit the design questionnaire in thirteen chapters. I have found out that I have strong internal skills such as communication, problem solving, handling critical situation. In addition, I have the corporate skills, innovation skills and the skills of building an effective organization culture. I prefer to analyse the political environment,as this requires external knowledge and skills, which seems to be difficult. However, I prefer to take challenge and it does not make me worried whether the challenges come from the professional environment and personal life. On the contrary, I have another three different areas, which I need to develop. I am gearing up myself to deal with my weakness and resolve the issues. I have categorized my weakness and discussed them in the following. Poor skills in human resource management: While pursuing the course in business administration I received the highest score in Human Resource management. However, I often fail to implement the ideas to develop human resource management in the organization. As I am working as the CEO of the company, I need to have proper knowledge about implementing the ideas of human resource. So that I help the HR managers of the organization in succeeding the plan though it is none of responsibility. However, as I run the operation from the top, it is my responsibility to take care of each segment of the organization. I should develop collective as well as more political skills and increase crucial competencies to find more option to run the operation of Virgin Megastore effectively. Hence, I could go through the history of some of the large organizations or I could learn the skills from an entrepreneur or successful fissional. Their ways of solving the problem and creating ideas could help me to b rush up my skills. Lack of skill in decision-making: This is one of my major weakness. I often fail to take the appropriate decision based on the situation. Decision-making is one of the major skills that I need to learn. There have been cases where I have to deal with the critical situation while working in the organization. However, I am not good at this particular activity. I remember once I had to a face a situation of employee conflict. First, I find it difficult to understand people, their way of thinking, their usual approach of performing activities. Thus, I lack confidence in developing this particular skill. Hence, I would focus on developing the skills of understanding the situations. Thereafter, I would pay attention to the reasons of occurrence and the consequences. Thus, based on these three section, I would take the necessary steps to resolve the issues. In addition, I also need to develop my analytical skills; thus, I could judge things based on the logic. While working in the professio nal field, it is necessary to judge and analyse the things based on the rationale instead of depending on the emotions. Skills of performing strategies: According to Daft (2013), formulation as well as the implementer are the crucial techniques based in which an individual could add value to the strategic management. While pursuing the course in business administration, my score in this field was not that poor. However, at the time of dealing with the real-world issues, I find some barriers in performing the strategies. This happens due to lack of discussion and negotiation with the members. Sometimes, I fear that I may not be able to make people understand about the purpose of respective action. Nevertheless, I need to enhance this particular skill to perform the required marketing strategies for developing the sales of the organization. As I have developed the plan of launching new products in the market, I will perform the necessary strategies. Hence, I may require effective managerial skills. In addition, with the help of Daft test, I have gained the confidence that I could effectively lead the en tire team, develop the team and work together on common goals. Furthermore, I have taken the help from the CP 360 feedback from my senior colleagues and other successful professionals. I have attached the comments given in the feedback. Communication: Have effective listening skills and creatively expresses the ideas. However, lack of ways used in communication. Absence of logical and comprehensive conclusion. Express ideas with logically and willingly. However, required improvement in communication, analysis. This is how senior colleagues and senior professionals have rated me in this particular area. Topic of interest: Based on the outcome of How do you fit the design and understanding my area of development. I have selected certain criteria to analyse my strength and weakness. I have focussed on my weakness to add strong values to deal with the coming challenges. Aligning the marketing strategies with the organizational structure Forming, structuring and leading the teams within the organization Developing the organizational culture, strategies and implementing the changes in the organizational structure In order to align the marketing strategies with the organizational structure, working as the Chief Executive officer, I need to develop this strategy and performance skills. Before implementing the strategies, I would communicate the purpose of the change to each level of employee of the organization to deal with the resistance to change. Thereafter, to develop the structure, build the team and guide the team, hence, I also need to apply the communication strategies. If the communication is improved, then it becomes easy to build the team and set the common objectives for all in the organization. Developing the organizational culture is a positive initiative, which can easily be implemented. However, it is evident that organizational culture could largely influence the performance of the organization. Hence, at the time of developing the organizational culture, I would propose to provide training to the employees. To implement this, it is necessary to have a strong discussion with the team members to reach achieve the goals. Thus, I believe that putting the vision in writing is a significant technique of making it successful. Critical Reflection The Daft (2013) individual result has helped to analyse my both strength and weakness. By analysing my strength and weakness, I would design my goals utilizing the ways of SMART Objectives to accomplish them successfully. In this context, Casalino (2014), mentioned that organizational design includes a methodology that further involves further steps, which helps to identify the dysfunctional aspects work flow, structure, strategies. These aspects need to be aligned with the current business scenarios, goals and implemented changes. In order to discuss about the topic of interest, I need to discuss the design of Virgin Megastore. Aligning the organizational structure and the existing strategies of the organization. I have discussed the plan with the board of directors to implement the design process. By creating new strategy and understanding Virgin Megastore environment. Likewise, I will align organizational structure with the proposed structure. As per the current scenario of the organization, I found the necessity of building the bridge to relate all members together. Then, I would discuss the importance of the change. Hence, I may use organizational policy to avoid resistance to change. I would apply the policy of treating each employee equally and providing them the required benefits. Thus, it becomes easy for a CEO to implement the proposed restructuring strategies. In order to shape as well as reinforce organizational culture, I would interact with the employees, managers, board of directors, and discuss the purpose of changing the organizational culture. Hence, I would listen to their ideas and opinions. This could help me to identify their individual issues. Based on the interaction, I could resolve the potential internal issues. Personal Action Plan Duration Goals Describe/express Measurement Obstacles Resources Time table Short Term Applying the strategies of increasing sales and leading the business toward the global market Depending the current skills and organizational competencies Monitoring the execution process weekly to lead the initiative toward the ultimate direction Lack of time and human resource Providing training to the existing employees 1st week of June/3rd week of July 2016 Analysing the appropriate product for launching based on the market analysis Analysing the existing products and services Designing the strategies based on the current market demands, resources and trading policies and market Aggressive strategies of competitors in the industry Using the technology to forecast sales and required resources Immediately Decision making skills Having different views of thinking and aligning them with organizational activities Trying to solve the current issues with the logical view to judge the efficiency Due to lack of time facing difficulties to make immediate decision Immediately Skills of performing the strategies Trying to implement the strategies based on views of employees Measuring the outcome of existing strategies comparing with the proposed strategies Lack of financial resource, time Employee support, skilled employees, organizational commitment 2016 Medium Term CEO Trying to perform the responsibility and hope to see myself in the board of directors Measuring my performance with the outcome received in the previous years. Identifying the difference between the existing process and current process Due to poor time management skills, I find it difficult to enhance the performance with new strategies. In addition, no assistance from the board directors 2017 Long Term Become the member of Board of director Perform effectively to increase the profit margin. Lead the organization to the global market. Understand the market and engage the organization in social activity Measure organizational performance with the performance of previous years Financial resources and human resource 2020 Board of directors may be the obstacle if the objects are not met Table 2: Action plan Conclusion On the completion of the report, I would mention that I have discussed my important skills, strength, weakness, areas that need improvement. Hence, I need to apply those skills in real-world issues. In addition, I need to pay attention to the areas that I am not good at. The things that I would brush up in the following days have discussed in the action plan. In addition, I have discussed about my weakness in decision-making and communication. Moreover, I should also focus on the communication. I understand that by developing the communication, I could interact with the managers, employees and others who are involved with organizational activities. In order to guide myself toward the desired direction, I have prepared the action plan to achieve my short term, medium and long-term goals. By achieving these goals, I could further enhance my career as per the desired direction. Executive SummaryThe strategic management of a firm is important for its success. An organizational is a complex entity in which a lot of stakeholders coexist. It is important to identify the operational issues in an organization. In this business report, Virgin Megastores is selected, for the purpose of the study. This business proposal identifies the operational loopholes of the company and is intended for the top management. A change in the organizational design is required for greater success of the company. The current situation of Virgin Megastore is analyzed by various models such as Porters Five Forces, SWOT analysis, Dafts situation analysis and Dafts contingency factors. These frameworks give clear idea of the external as well as internal conditions of the company. This would enable the top management to understand the current situation and make appropriate decisions. The literature review gives basic concepts regarding organizational design, organizational culture and scie ntific management theories. The analysis of the organization is done as per the proposed dimensions and the restructured organization is presented. The existing and the proposed organizational charts are compared for better insights of the senior management. This business proposal would give new directions to Virgin Megastore and would lead to its success. Company Overview Virgin Megastores is an entertainment retail chain that operates globally. It was founded by Sir Richard Branson in 1971 (Virginmegastore.ae 2016). The headquarters of Virgin Megastores is at London, United Kingdom. The current operations of the store are exclusively located in Middle East and North Africa (Virginmegastore.ae 2016). The primary products of the company are consoles, books, games, t-shirts, magazine and others. It has several stores all around the world- Jordan, Egypt, United Arab Emirates, Oman, Morocco and others. Virgin Megastores has its exclusive presence in the Middle East countries such as Saudi Arabia, Bahrain, Kuwait, Qatar, Syria, Oman and the United Arab Emirates. The market share is 36.2 % (Virginmegastore.ae 2016). The key competitors are HMV, Circuit City, Wal mart, Best Buy and others (Virginmegastore.ae 2016). The trade name of Virgin Megastore in Middle East is V Star Multimedia LLC (Virginmegastore.ae 2016). The first megastore was opened in Deira City Centre in Dubai, in the year 2001. There are more than eight Virgin Megastore located all around Dubai. The company is an all round entertainment retailer, which is extremely popular among the masses (Virginmegastore.ae 2016). The megastores are also a venue of live performances by singers and other artists (Virginmegastore.ae 2016). The store organizes quiz nights and other events. There is also a newly opened boutique section that offers a wide variety of items. Virgin Megastore is extremely popular among the people of Middle East (Virginmegastore.ae 2016). In UAE, this store is favorite among the locales as it provides wide range of music. Business case for restructuring The operation of a company requires lot of efforts for the smooth functioning. There is a need to identify the existing business problem Virgin Megastores. The boss has asked to identify the current issues prevalent in the organization and provide suitable solutions for it. This is because there is a need to eliminate any malfunctioning in the organization so that the organizational objectives are achieved. The company has lot of operational problems because of the fact that the company is a result of several acquisitions (Harb and Chaaya 2015). A business problem is identified for the purpose of this study. The wide number of acquisitions has led the company to reduce the operational excellence. The quality of services has been hampered due to this factor. There are several frameworks, which are used to identify the internal as well as external factors of Virgin Megastores. SWOT Analysis This presents the strengths, weakness, opportunities and threats for the company. Strengths- Virgin Megastore has its worldwide presence with thousands of stores all around the world. The company is well established in the Middle East. The company enjoys strong brand name of Virgin (Nnadi 2014). It has also the backup of Sir Richard Branson, which makes it widely popular among the masses (Virginmegastore.ae 2016). Weakness- There is many operational issues for the company including lack of coordination within the departments (GeismarSriskandarajah and Zhu 2016). There are limited business options in the Middle East countries, as its major focus is London (Virginmegastore.ae 2016). The company enjoys low product portfolio and a wide number of stores are already closed. Opportunities- There is huge options in music electronics (Roels 2012). The company can integrate into the manufacturing function of music electronics. It can feature their own albums in their stores which would attract more number of people. The company should participate more in sponsoring events and should undertake more promotional activities. Threats- The market is dominated by a wide range of competitors, which implies that Virgin Megastores needs to make excellent products (Heath 2014). The competitors are offering innovative models, which are attracting the target audience. The technology is undergoing rapid transformation; hence, the company needs to update its technological framework. Porters Five Forces The Porters Five Forces models help the company to analyze the potential risks, profitability and opportunity (Lee Kim and Park 2012). This is done through the analysis of five components in a business venture. The five factors are discussed below- Threat of entry- There is high threat of entry in the entertainment industry (Lee Kim and Park 2012). The rules are comparatively relaxed to enter in the entertainment sector and hence a lot of competitor can pose threat to Virgin Megastore (ae 2016). Bargaining power of supplier- The Virgin Airlines is an international business organization, which enjoys consistent growth. The suppliers can decide independently whether to supply Virgin Megastores with raw materials or not (ae 2016). The company depends on the suppliers for receiving products. They also transfer the finished goods to the local Virgin Megastores. The suppliers have the capability to increase their prices, which may pose difficulties for the company. Bargaining power of buyer- The customers should be attracted constantly to maximize the selling opportunities of the company. Virgin Megastores do have innovative product ideas because of the support of Sir Richard Branson (ae 2016). He was able to provide quality products at competitive prices on a global basis. In the entertainment industry, the customer enjoys high bargaining power, because of the large number of options available to them. Threats of substitute- The Virgin Megastores is offering less differentiated products. The company is producing similar products in bulk quantity (ae 2016). There are a lot of identical products offered by the competitors like HMV, Wal mart and others. The companies face constant threats from the similar offering from other companies. Competitive rivalry- There is a lot of competitors coexisting in the market place. The company should strive to provide the best services to the customers in order to continue attracting them. Virgin Megastores must generate sufficient competitive advantage. It should integrate its core competencies in the business process as well as the corporate culture (ae 2016). Dafts contingency factor It is important for Virgin Megastores to determine their contingency factors, for analyzing the current operational issues (Daft 2015). They are discussed below- Organizational technology- This is concerned with the adoption of technology for the purpose of converting inputs into outputs. The company uses innovative technological platforms such as Web Enabled Store, Virgin Information System, point of sales terminals and others (Daft 2015). Size- This factor takes into account the size of the company, total sales and others. There are millions of employees working in Virgin Megastores globally. The company also witnessed a growth of 5.8% (approx) in their total sales (ae 2016). Environment- The Company works in coordination with the government, industry, suppliers and customers on a regular basis (ae 2016). An issue with these entities can affect the overall functioning of the company. Organizational culture- The Company has its own principles such quality values, value for money, work life balance and others. It maintains its own workplace culture and is concerned with the well being of the employees. Organizational goals- Virgin Megastore believes in creating a unique purchasing experience for its customers (ae 2016). It aims to offer a convenient and simple user interface so that the customers can enjoy a smooth shopping experience. Dafts structural dimension The structural dimension is useful in explaining the internal characteristics of the organization (Langen 2012). The different dimensions are described as below- Formalization- The organization follows good written documentation procedures including job descriptions and regulations (Langen 2012). Specialization- Virgin megastores have less number of job segregations. The organizational jobs are not clearly divided in individual jobs. This often gives rise to confusion among the employees (Langen 2012). Centralization- Virgin Megastores has decentralized operations. This implies that the decision making authority is designated to all the levels of organization (both top management and lower management levels) (Langen 2012). There may be various decision making activities such as selection of suppliers, making purchases, recruitment of employees and others. Hierarchy of authority- Virgin Megastores has well defined span of control at each stage (Langen 2012). The number of employees reporting to a particular supervisor is determined for each department. Literature Review The organizations comprises of its people and the interrelations between them. An organization performs vital functions so that the organizational goals are attained. An organization consists of various departments which perform individual activities. They aim for horizontal coordination as well as vertical integration. The modern organizations are characterized by flexible strategies and greater inter cooperation between departments (Casalino 2014). The organizations are goal oriented and inspire the employees to achieve the organizational vision. An organization needs to interact with the suppliers, customers, competitors and various components of the external environment. Organizational design There are several organizational theories that help in better understanding of the organizational design- Weber Bureaucracy, Scientific Management theory by Taylor and others. Scientific Management theory Frederick Taylor has formulated scientific management theory with an objective to find the most suitable method of performing a particular task (Bell and Martin 2012). The four most common principles are outlined as below- There should be proper allocation of work between the employees and the managers. The managers should allocate their time in training as well as planning of the tasks. This allows the employees to work efficiently (Bell and Martin 2012). The work performance should be monitored on a regular basis. There should be sufficient supervision and instructions so that the best quality of work is produced. There should be proper matching of the jobs with the capability of the employees. The workers should be trained well so that there is maximum operational efficiency. The rule of thumb should be replaced by scientific methods (Bell and Martin 2012). The most effective method of performing a task needs to be identified and implemented. Organizational culture The organizational culture is a vital component in determining the success of the organization. There are diverse cultural norms in the organizations. The Handys cultural typology is a wonderful tool to assess the organizational culture of the company. Handys cultural typology There are four main types of organizational culture prevalent in an organization- role, power, person and task. The power cultures are prevalent in small companies which are dominated by as single entrepreneur (Dinges and Maynard 2013). The head of the company enjoys all the power to control the company. The role cultures are seen in organizations where the role of senior management is to coordinate the various functions in the organization. These types of cultures are highly procedural in nature. The person culture emphasizes on the importance of its employees. The organizations give value to the employees based on their professional skills. The task culture is found in the matrix organizations where the culture can be linked to extensive knowledge sharing. International Cultures- Hofstedes cultural dimension The organizations are becoming global as they are stretching their operations across the geographical boundaries. The Hofstede model discusses about the factors that act as distinguishing factor between national cultures (Taras Steel and Kirkman 2012). The various factors include power distance, uncertainty avoidance, collectivism, masculinity or femininity and long term orientation. The power distance is concerned with the level of social distance between the workforce and the senior management. The uncertainty avoidance factor is concerned with the type of risk faced by the organization. The individualism or collectivism factor refers to the ability of a culture to reward the efforts of the individual people. A masculine culture is believed to have characteristics of male person while the gentle features of a female person (Taras Steel and Kirkman 2012) characterize a femininity culture. The long term orientation factor refers to the difference between different national cultures. Tuckman- Group Dynamics There are a series of group development that are observed in organizations. The groups undergo through five different stages of development- forming, storming, norming, performing and adjourning (Williams 2014). The group members are willing to work together in the forming stage. The storming stage consists of the development of the arguments and the rise of conflicts among the team members. The end result of the conflict gives rise to rules or norms that should be followed. This stage is followed by the adjourning stage, which is a positive path that should be followed by the group members after they resolve their conflicts. This model of group dynamics is widely followed by the organizations. Case Study: Transformation of HMV The HMV is a global organization that has witnessed a major transformation to an entertainment brand from a music CD retailer (Ittoo 2015). It offers live events, gaming and wonderful cinema experience. The company has introduced loyalty scheme, known as purehmv, which strengthened the customer relations of the company. This scheme allowed the customer base to make points and trade the same in various things. The sales figures of the company increased and the company witnessed enormous profits. The company made the plans of transformations three years back. The company made detailed planning and implemented the same. The company made constant efforts to improve its operational excellence, which is evident in the balance sheet of the company. This made the company successful and popular among the masses. SWOT Analysis of Virgin Megastore Strengths 1. Strong Brand name 2. The stores are established across many countries 3. Diversified parent company 4. The brand is present in many countries 5. The company is well established in the middle east 6. Establishment of first music store in London Weakness 1. Stagnant business in some countries 2. Lack of product diversity and limited business Opportunities 1. It can start their own music album, which would grab the attention of the customers 2. Utilize the opportunities of venturing into movies and sponsorships. It can utilize the videogame market to expand their business. 3. It can utilize the opportunities of manufacturing music electronics. Threats 1. Constantly changing technology 2. Music life can get extinct 3. Severe competition caused by innovative models Table 1: SWOT analysis (Source: Balogun and Johnson 2014) Strength Virgin Megastore is a branded company and enjoys good brand value. The company enjoys brand recognition and is spread across various countries. The brand name is established in as many as fifteen countries. The companys biggest asset is the brand name. The company has a strong brand name Virgin. Virgin has a god brand reputation across Australia and the United States. The brand name is the indication of the quality of product that is offered to the consumers (Balogun and Johnson 2014). The company has strong managing body. The management body of the company has strong skills and expertise and looks after the need and wants of the consumers. The management is able to understand the taste and preference of the consumers and makes sure that the demand of the consumers are met by the company, which is critical for enhancing and preserving the brand name of the company. The company has an outstanding market share with numerous stores established across various countries. The company has a good hold over the global market and has strong control over the global market. The company has gained strategic locations across many countries, which has made Virgin stores accessible to customers across various countries. The company is well established in the middle countries. The company enjoys good market share in the Middle East countries and has a strong customer base in the Middle East countries (Balogun 2012). The company has ventured in to the music arena and opened its first music store in London. The company has a good reputation in Britain and the company utilizes this to establish strong footing in the music industry. The company caters to the need and preferences of all age group. It aims at wide demographic group. Weakness One of the weaknesses of the company is that it low product portfolio. Therefore, one thing that can be seen is that the company does not have diversification in products. The low product portfolio reduces the scope of earning for the company. It reduces the scope for growth and expansion for the company. Virgin Megastore has faced stagnation in certain countries. This reduces the scope and growth of the company. It can even lead to the decline of the product lifecycle. Therefore, the company suffers from certain shortcomings and limitations that can hinder the operations of the company and also affect the profitability of the company (Benito-Osorio et al. 2013). Opportunities The company, Virgin Megastore has certain opportunities that it can utilize to promote the business and to expand the business in the longer run. Virgin Megastore has ventured in the music industry. The company can utilize these opportunities to venture in the manufacture of music electronics. This will help the company to expand the market share and expand its scope of earning. It will bring diversification in the product portfolio of the company and will assist in enhancing the profitability of the company. The company can juggle with the opportunity of entering the videogame market and can experiment with movies and sponsorship as a means to expand the business. The company can also use the opportunity to start their own music album which will grab the attention of the customers and will help the company in establishing a strong footing in the music industry. This will promote diversification in the business of Virgin Megastore. Threats One of the threats that Virgin Megastore faces is that technology is constantly changing and the inability of the company to cope with the changing innovation can make the companys growth stagnant. It will limit the scope of earning and expansion or the company. Competition from rival companies and models can pose a major threat to the company (Balogun 2012). Product Diversification Virgin Megastore had been suffering from declining sales figure, which adversely hampers the financial health of the company. This is a major problem for the company since it hinders the scope and growth of the company. It also affects the profitability of the company. Therefore, the company embarks on introducing new products to improve the scope of the company and thereby, tackle the declining lifecycle of the existing product. Product diversification is the strategy adopted by the company to restructure the organization and consequently improve the business condition of the company. Virgin Megastore has adopted this strategy to develop the business and increase the product portfolio of the company. It will help the company to overcome the weakness of the company. It will help the company to diversify the product range and add new products in the list for the company. It will help the company to boost the sales of the company and it will help the company to enter new markets and wi ll strengthen the market share of the company (Littler, Bramble and McDonald 2014). There are certain processes and steps that Virgin Megastore has to implement the strategy of product diversification adopted by the company. The requisite steps that need to be taken are: Setting up of objectives The company has to set up objectives based on the situations. In this case, the company has to analyze the situation and see the area of shortcomings. The company suffers from low product portfolio and thus, the product lifecycle of the existing products is in the declining stage. The company has to set objectives as per the problem faced by the company. The company should adopt an aggressive market approach and utilize the product diversification strategy to tackle the limitations faced from the existing product. Thus, the company is able to form its objectives and aims that it intends to achieve product diversification. Approach The proposed approach is introducing new products to existing and new customers, which can help the company to increase the customer base and thereby strengthen the market share of the company and will help the company to consolidate its position in the market. It will also help the company to increase and diversify its product range. A detailed study of the market needs to be carried out and a viable and feasible list of the products needs to be planned that the company intends to launch and introduce in the market (Wiersema and Bowen 2008). Source Product diversification is an expensive and time consuming process. It is important that the resources of the company is assessed and evaluated. The resources and funds of the company need to be evaluated. Proper arrangement of the resources of the company needs to be done and proper allotment of funds needs to be done. The company intends on developing the product internally and therefore, the company has to strategically plan the product development. Virgin Megastore needs to analyse the opportunities in the market and increase its production of product so it strengthens the marketing plan of the company. The financial condition of the company has to be analysed before the product diversification strategy can be implemented. Since the company went through a stagnant period with a dip in sales, it is important that the sources of fund and resources are analysed and evaluated before implementing the strategy. Resources Assessment of resources needs to be made, which is a critical step in planning the product diversification process. The budget of the plan has to be made and the amount of investment needs to be assessed. The supply chain management has to be assessed and evaluated. Suppliers for the product have to be evaluated and proper communication and effective relationship needs to be built with them. The expected sales figure need to be estimated and proper marketing plans need to be made. Suitable distribution network need to be fixed and evaluated along with sound marketing plan (Hutzschenreuter and Horstkotte 2013). Analysis of element of Risk There is risk element in every business endeavor. Therefore, it is important that the cost of developing and marketing the products is analyzed and the risk element of the strategy and the approach need to be understood and analyzed. There has to be various measures that need to be taken to offset the risk factor. The risk factors that are involved in product diversification are lack of acceptance of the product by the target market. The shift in the demand pattern and taste and preferences of the customers are some of the risk factors involved in product diversification. Cyclical trend of economy can also affect the product diversification strategy (Wiersema and Bowen 2008). Efficient research Proper efficient research need to be done to understand the target market and taste and preferences of the market. Small scale market test need to be done to analyze the feasibility and viability of the research. The feedback of the prospective customers needs to be studied. It will shed critical light onto the potential of the strategy. Proper market segmentation needs to be done and potential rivals and competitors need to be studied. Market research is a critical element in product diversification strategy so that the correct product is introduced to the targeted market. Proper analysis of the cost needs to be done so that an accurate budget can be made for the strategy (Benito-Osorio et al. 2013). Comparison between existing and proposed organizational chart Figure 1: Existing Organizational Chart (Source: Created by Author) Figure 2: Proposed Organizational Chart (Source: Created by Author) On careful analysis and comparison between existing and the proposed organizational chart, it can be seen that new wings and an addiction in the hierarchy cycle has been made. The product diversification strategy has demanded the induction of product manager in the organizational chart. Product manager will play a key role in development of products and will also assist in enhancing the nature of product. Along with the induction of product manager, few recruitment and selection of new employees have been made in the organization to meet the demand and needs of the strategy. Therefore, there are few additions to the organizational chart of the company. Specific role and responsibilities are assigned to the employees. One employee will be assigned with conducting market research, another with sales and another with back office job. 3 new selections of employees are made for market research. Therefore, it will assist in achieving the strategy of the company. There is no delayering and downsizing of employees and there are no job loss chances. Product diversification strategy requires fresh and additional workforce. There is no downsizing of employees and there is no threat of job loss. Proper training and development procedure will be done to train new employees and improve the quality of existing employees. This will enhance the productivity and performance of the employees and will consequently play an important role in increasing the output and performance of the company. It will also enhance the expertise and knowledge of the workers. 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