Strategic Management
Porter's Five Forces Model and Strategic Management
as Applied to Bowne & Company
Porter's Five Forces Model and Strategic Management
as Applied to Bowne & Company
Bowne & Co., Inc. is a financial services company which has been in business for 235 years. During this time the company has grown to become the world financial services leader in communication services, investor/shareholder relations and communications, and capital markets communication guidance. The communications side of financial services is Bowne's specialty, as they provide "regulatory and compliance documents; personalized financial statements; enrollment kits; and sales and marketing collateral" (Bowne, 2009). The company has expanded its operations in recent years due to the wish to be involved in all aspects of their customer's financial transactions. In February of 2010, Bowne merged its services with those of R.R. Donnelley & Sons in an all cash deal. Bowne will remain completely autonomous except in the matter of a very few caveats which were agreed upon by both companies.
The industry that Bowne competes in is highly diversified with many small independent companies providing all-inclusive document services also. Bowne & Co. maintain a large portion of their business in the area of compliance reporting because it "is less sensitive to capital market changes and represents a recurring periodic activity, with seasonality linked to significant filing deadlines imposed by law on public reporting companies and mutual funds" (Bowne, 2009). Due to this major function of the business, and the large amount of business that Bowne realizes in this sector, fluctuations in the financial sector do not impact its business to a great degree.
Bowne has been instrumental in creating innovative products which have maintained its stance as an industry leader. New products include:
FundSuite SX: "converts raw financial data into effective commuinications, reports and filings" (Bowne, 2009).
Bowne Compliance Trak and Bowne Compliance Trak Advisor.
Smartapps: a content management system.
FundAlign: this program allows better communication to take place between mutual funds and investment management firms.
Bowne Compliance Driver
And, many more applications, programs and communication devices which allow for increased compliance and streamlined communication. With the innovation and market share that they have enjoyed, Bowne looks like a company poised for a great future.
Strategic Planning Literature Review.
Strategic planning (also called strategic management) is a method that companies use to grow their business despite the negative forces that exist. For a definition, Lamb (1984) says;
"Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment."
This means that a company must look at all possible future outcomes that are associated with their particular business, the industry as a whole, and the customer base that they serve. With this knowledge they can grow their profit and sustain a growth. Without a certain amount of strategic planning, a company will not be able to anticipate what is happening within the industry and their profitability will drop to zero (Grant, 2007).
Strategic planning needs an outline from which decisions are made. In the late 1970's one was formulated that had become an industry standard when using the process of strategic management. Porter's "Five Forces Model" (Porter, 2008) is a design by which an organization can examine all facets of its business and determine how they can grow and maintain their profitability. Porter argued that "the nature and degree of competition in an industry hinged on five forces: the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and the jockeying among current contestants" (Slaw & Yu, 2004). These are all negative outcomes for a business which, if not managed, could ruin the business in the long run. Porter said the "collective strength of these forces determines the ultimate profit potential of an industry" (Slaw & Yu, 2007). As an example of this: a product or a process emerges that has very few manufacturers, but large profit potential. This industry will then attract new businesses which wish to share in the profits. Because...
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Their biggest barrier to success dealt with the encroachment of e-commerce and companies who were competing in our market without having brick and mortar expenses; American taxes and employee issues; and American taxation and regulatory issues. Management decided that competition was not dead, and it was up to the company to change and adapt as opposed to ensuring the clients did so. Traditionally, competition is based on price, offers, and
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