Page 1: Introduction
When faced with the need for change, it is easy to consider the organisation’s current activities and then look for strategies that are familiar and cause the least upheaval. This may mean looking for new markets, or improving controls within the business.
However, at key stages within the lifetime of every organisation, senior business managers have to make more radical decisions. These have a fundamental impact upon the direction of a business by moving it away from the familiar into new territory. Making such decisions is not easy as they usually have a huge impact upon everybody either working for or affected by the business. But, the consequences of not making such decisions would be to allow the organisation to drift and lose its competitive edge. In the longer term, the effects for all concerned would be far worse.
This is known as strategic drift. There is plenty of evidence in the past of successful companies failing to respond to all of the rapid changes in their environment and drifting in such a way until a more permanent decline sets in.
One organisation that has been transformed in recent years is Glynwed. Under new management, the company has, over a period of two years, made key strategic decisions about the long-term direction of the group. This strategy has been designed to create a dynamic business which would achieve advantages for the Group over its key competitors.
This case study analyses how and why its strategy of divestment – the disposal of certain parts of the group, and acquisition – bringing into the group other businesses, has enabled Glynwed to obtain a market leadership position in two key markets. This strategy, though radical, has enabled Glynwed to fit its activities into the changing environment in which it exists and build a business better equipped for the future.