Strategic Position and Choices of Dits

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 activities include management, marketing, financial management, operations management, research and development and information systems.

I have opted to utilize the company, Direct Information Technology Solutions (DITS) in my assignment. The strategic position of the DITS will be analysed by applying the analytical models of strategic management to the current situation in the company. The following analytical models will be used to analyse both the internal and external environment of the company:

• PESTEL

• Porters Five Forces Model

• Analysis of competiveness

• SWOT analysis

• Value chain

• Strategic clock

The examination of the strategic position of DITS will involve analysing the strategy of the company with emphasis on the environment it operates in, its strategic capabilities and how expectations affect organisational purposes and strategies. The analysis will conclude with a clear statement of the Key Issues and Critical Success factors. The strategic position and choices of DITS will then be used as a base to develop an appropriate competitive strategy for the company. The development of the strategy will also take into account the organisational cultural issues prevailing in the company.

2. COMPANY OVERVIEW

The selected organization DITS, founded in South Africa, is operating for 16 years (2005) and engages in the development, production, marketing, and sale of computer equipment, software, network servers and related accessories.

The company is owned by 5 shareholders (20% shares each).

Direct I.T Solutions (DITS), currently has a total yearly turnover of the company ranges from R 16.5 mil to R 17.0 mil, with a staff compliment of 230 employees in 2 provinces.

It has been a vision of my Director for the past 1 year to introduce low cost personal computers and laptops to the general retail trade and also align DITS into a national market leader in the supply of low cost but reliable computer equipment. He has also envisaged an expansion into another 4 provinces ie. Western Cape, Mpumalanga, North West Province and Limpopo.

The current DITS group of structure:

Fig 1- Author: Yugan Gounder

3. STRATEGIC POSITION OF DIRECT INFORMATION TECHNOLOGY SOLUTIONS

The layers of the company business environment as illustrated in Fig 2 (Johnson, Scholes and Whittington (2005, p. 54) depict the 3 factors that exert an external impact on the survival of DITS ie. 3.1 environment, 3.2 industry or sector &

3.3 competitors / markets.

These factors explained in detail relative to the DITS group are:

3.1 The environment- PESTEL

PESTEL- Acronym for Political, Economic, Social, Technological, Environmental and Legal factors.

The PESTEL framework (figure 2) provides a broad list of possible successes or failures of certain strategies and is a useful tool for understanding risks associated with market growth or decline, and as such the position, potential and direction for a business or organization:

Fig 2: PESTEL Analysis of the DITS Group

Author: Yugan Gounder

POLITICAL:

• government policies

• government term and change