Strategic Management Aspect Essay Example | Topics and Well Written Essays - 2000 words

Strategic Management Aspect - Essay ExampleHowever, it should also be notable that each of these techniques has its own weaknesses and limitations. Thus, in evaluating the Loftmeisters strategic performance through the use strategic management tools, this promulgate give also state its weaknesses and limitations.The report is organized as follows. The first section leave behind look at the internal environment of the Loftmeister through the use of ratio analysis in order to assess its remunerationability. Next, the external factors in the companys environment will be looked into through the use of grind analysis. The last section will present a SWOT analysis which will integrate the previous analyses. monetary ratio analysis is a very essential tool in assessing the fiscal health of a business entity. Specifically, it enables a financial analyst to mooring trends in a business and to compare it with the performance of similar business enterprises within the same industry. pec uniary ratios are grouped into four categories, each video display a different aspect of a companys financial operations. These are profitability ratios, financial leverage ratios and liquidity/solvency, and activity ratios. Due to the limited availability of data, this report will only look at Loftmeisters profitability ratios from 2001-2004.Profitability ratios measure the ability of the company to generate income from its investments less the costs incurred. The gross profit brink ratio tells us the profit a business makes on its cost of sales, or cost of goods sold. The computed operating profit margin, which is the ratio of operating income to sales measures as a percentage of sales, the excess revenue from sales over cost of normal operation excluding financing. (Analyzing Company Reports 2005). Logically, higher profitability ratios indicate a better financial condition.The table above shows the computed profitability ratios of the Loftmeiser Plc from 2001-2004. It should be noted that both gross profit and operating profit margins are declining through the years. The companys gross profit margin declined by 9% during the five year period attributing to the rise in the demand for lower margin off-trade products coupled with the decline of higher margins on-trade offerings. On the other hand, operating profit margin also slid by 10% indicating Loftmeisers inefficient cost management.Financial ratios are commonly used to assess the financial performance of a business organization. However, this type of analysis is limited only in evaluating the financial aspect of a company and not the whole industry. Financial analysis should always be accompanied by benchmarking in order to fully determine how each industry player fared during the financial year. It should be noted that numbers dont tell all and attention should also be focused on other relevant qualitative issues in the market. PESTLE AnalysisPESTLE analysis stands for Political, Economic, Social, T echnological, Legal, and Environmental. This strategic management tool is noted for its ability to capture almost all the variables in the environment where the business