What Is Strategy in the Business Environment - Assignment Example

What is strategy? Strategy is a common basic issue in the business environment. However, strategy is such a powerful concept because many businesses survive and move to greatness today because of their successful implementation of it, efficiently and effectively. Not only that. Many people or firms try to employ strategy because they believe that that will help them up to the ladder of success in their chosen industry and business, and the prevailing environmental conditions that might have been influenced by the other key players. In other words, strategy is a significant help to boost a firm’s performance in achieving their corporate goals. Speaking of corporate goals, strategy is an essential component of obtaining whatever it is that a firm will want to achieve (Miltenburg 216). Without a strategy, it can be harder to reach a corporate goal especially in the midst of competition where the key players also compete and find for the best ways for them to generate their competitive edge and eventually stand above the other in the end. For instance, this case is remarkably clear in a marketing strategy by which a key player has to ensure its competitive advantage. To achieve this competitive edge and become a cutting edge over its competitors, strategic moves are essential as it is only by means of these that the said marketing firm will be able to guarantee a competitive force to enable it to push forward to the on-going competition in its market niche or generally industry. The work at hand generally presents what a strategy is. This presents the essential information about a strategy particularly the reason why it is necessary to come up with it and employ it in the organisation or firm. This paper also includes the reason why it is important to update a strategy, the importance of a strategy, the use of a strategic analysis, strategy and the realisation of a firm’s mission and vision, and tools necessary for a productive strategic analysis prior to achieving a competitive advantage. All of these point to the bottom line, achievement of the firm’s goal and eventually competitive advantage. Therefore, this paper tries to present the point that a strategy is a relevant action in an organisation or firm that will make sure of the achievement of goal and competitive advantage. First, as stated, it is important to know the reason why it is necessary to come up with a strategy in an organisation or firm. This move will provide a clear illustration of the concept linked to the strategy. A good way to do so is to consider strategy as a dynamic approach or course of action involved in a company or organisation because of changing circumstances influenced by the context of the external and internal conditions of the environment. If a firm or an organisation wants to continue perpetuate in an industry or niche that it belongs to, employing strategy is considered an essential undertaking. If it wants further to hold competitive edge over its competitors, the implementation of a strategy is one of the courses of action as possible (Porter 2). If a marketing manager wants to manage demand, employing essential strategy is necessary because it can be a way to identify the best segment to consider or product or service offerings to provide. The bottom line in doing so is for this manager to guarantee a significant market share and even competitive advantage. This clearly illustrates the point that strategy needs to be dynamic, and so a regular update of it is necessary. Strategy needs to be updated because of the changing external and internal conditions of the environment. A certain industry is moved by a prevailing force of competition from time to time. Considering that there are key players who are active in participation, the willingness to initiate a strategy is a fundamental focus at some point. This is evident in the mobile phone industry where the key players try to create highly differentiated offerings in order to generate a remarkable share in the industry. Some of these key players target specific segments which will provide them the opportunity to differentiate their product offerings and create or meet the need of their target market (Schnaars 101). In this way, they can have the chance to generate their market share and gather a remarkable experience in the industry, which will further pave a way for them to develop excellent customer trust, satisfaction, support and loyalty. Therefore, if one will base it on the point of view of marketing, the reason why a strategy must be updated is because of the changing needs or demand patterns of the customers. From the point of view of business management, the development of a strategy is just a way to create counterparts of what the others are simply doing. In this way, there will be a great chance for a firm not to be left behind in the competition. Considering that competition continues to exist, managers must be fully acquainted of the fact that whatever industry they belong, change is necessary in there as it must be truly linked to growth development of the firm. Therefore, strategy provides the opportunity for a company or service to expand or change. Every organisation or firm that wants to go for expansion is surely looking forward to its business growth. The realisation of this vision is not just a one-night stand. It requires the right or necessary approach. One important move that has been proven to work without question is the implementation of strategy. Strategy has become the vital component of the essential actions of the firms trying to expand their products, services and companies. For instance, consider the case of McDonald’s. Just like any of the great companies today, McDonald’s inception was a depiction of a humble start, but it looked forward to the possibility of expanding its market just as how it has been made possible for them to cover the world today. There are branches of McDonald’s in almost all countries today, which is a measure of the company’s successful expansion of its brand, product and service offerings. Just as already mentioned, this was not realised in a one-night stand. McDonald’s initiated a strategy that will guarantee successful expansion. The firm decided to go for franchising, an effective way for them to expand, but in as much as possible will save them from insurmountable amount of cost in establishing their company across the world. However, prior to this, the company was able to initiate a strategy that enticed prospective franchisers. What McDonald’s essentially did is ensure great acceptance of their product and service offerings. People will surely love of their product offerings and services offered because there is associated needs for them. In a fast-paced world, instant is necessary and that makes McDonald’s a significant fast-food chain company addressing the prevailing needs of the people when it comes to saving time. People before are not like this who would usually go in a hurry. Today, saving time is a must. This means that there is a need to go for change and firms must be able to identify opportunities like this in order to go for change too or even expansion just to be able to cater the existing needs. However, in doing so, a strategy is a must. For McDonald’s to be able to address the world’s needs for a fast service, franchising strategy is a must as to the moment there was an acceptance of its product and service offerings. However, this strategy was not immediately applied. A significant analysis like gathering of data or the use of tools to generate data must have been potentially applied at its best. This is the great role that a strategic analysis plays. In strategy, strategic analysis is important, which involves the use of tools to generate or gather data in an objective approach (Information Resources Management Association 51; Grunig and Kuhn 67). This can lead to the decisions on strategy to be made effectively. As an objective approach, strategic analysis at some point must have to be scientific in its dealing with the gathering of data and their analysis. More of this strategic analysis and its associated tools will be discussed later next to the succeeding section. On the other hand, another remarkable point concerning strategy is about how it has become an integral component as to how the organisation aims to realize its mission and vision. Planning in great detail is a strategy formulation and implementation (Karami 32). If an organisation wants to realise its mission and vision, then to initiate a plan is a good way to start. Considering that a strategy formulation is involved in planning, strategies essentially must play a vital role on how to establish the vision, mission and goals and to how to realise them. Vision is something that may stand as the bottom line of everything. It is the path that needs to be followed and prior to obtaining it, it must be subdivided into mission that can be readily obtained by arrays of goals. Goals on the other hand require the formulation of strategies in order to realise them. This only illustrates the point how important or powerful is the strategy in an organisation specifically in planning activity. Plans therefore will never be completed without specific strategies if one will base it on the context of the business. However, planning on the other hand requires acquiring of data in order to make precise measurements prior to initiating control such as performing corrective actions if necessary. These data will also serve as remarkable bases for whatever actions are necessary to be initiated in order to achieve specific objectives. This only illustrates the point that the data and strategy must also work together in order to initiate better output. This is the major function of strategic analysis, which is also an integral component of strategy formulation. In order to formulate this strategy with the presence of relevant data, there are frameworks and tools that are commonly used. These tools are discussed in the next section. There are frameworks or tools that can be used in order to analyse and produce alternative strategies. Among these tools are SWOT (strength, weaknesses, opportunities and threats) Analysis, and Porter’s Five Forces model. SWOT analysis can be a tool that helps managers to produce alternative strategies because this framework allows them to understand both the internal and external context of the business environment (Boone and Kurtz 46). Strengths and weaknesses refer to the internal data or information within an organisation. These data are essential prior to decision making and formulation of appropriate strategies. Understanding the organisation’s internal and external environment means a form of assessment that will help the decision maker understand the probable competitive edge of an organisation or firm and the potential weaknesses that call for improvement or enhancement initiatives. This is necessary in the formulation of a strategy because such move must ensure competitive advantage and the ultimate way to do so is to know the internal information of an organisation in order to evaluate its capacity and do the necessary enhancement program for possible weaknesses so as to turn them into remarkable strengths. This will also provide detailed information for the managers or decision makers if the firm’s weaknesses outweigh strengths and vice versa. As also in line with SWOT analysis, the next data of great consideration are the opportunities and threats. These are factors that may go beyond the total control of the organisations or firms that they have to grab or get rid of. Opportunities are what the firm must grab, but the threats are something that must require preparation and essential control. Considering that the opportunities and threats are factors outside the bound of a firm’s control, knowing them in advance is a remarkable component in strategy formulation. A strategy must have to be in line with the flow of the opportunities for the advantage of the firm and counteract the likelihood of achieving the disadvantageous side of the threats. In totality, SWOT analysis is a tool for strategic analysis that requires more meaningful assessment so as to come up with the appropriate decisions prior to the formulation of an alternative strategy. There are many organisations that until now are using SWOT analysis. Without question, Apple Incorporated is one of them. Its strategic move to come up with highly differentiated product offerings is what makes it a market leader in its industry today as far as product innovation is concerned (Apple Incorporated). Without understanding the environment’s opportunities and threats, Apple Incorporated will most likely not to go down deeper with its product innovation strategy to come up with differentiated offerings. Considering that the company was able to find that there is a remarkable opportunity for product innovation and it far outweighs the associated threats, then its differentiation strategy continues making it a market leader when it comes to the newest technological innovation. Apple knows that there is a great opportunity for its new innovative products because the market substantially accepts something new that will be able to meet specific needs. Apple also knows its competitive strengths together with its weaknesses in its industry. This is the reason why it continues to promote its high-end products for years because it knows its market niche where it can be competitive and able to surpass the prevailing tough competition in its industry. Its potential weakness however may be the point that with it becoming a market leader, its strategic moves are essentially guarded. Apple knows this for sure, but knowing that its strengths far outweigh its weaknesses, its competitive control in its industry is still remarkable at present. Next strategic tool is Porter’s Five Forces model. This framework remarkably explains the competitive forces in an industry that are responsible for making the competition tougher. The rivalry among existing firms and the forces associated with it to be fully realised must involve the relevant key players including the new market entrants, buyers, suppliers and substitute products or services (Porter 4). In other words, this framework seeks to investigate the actual trend taking place in an industry, which must be external to the firm. Knowing the relevant forces or influence that each key player is capable of creating is a potential move that will prepare an organisation with its preparation of an alternative strategy that will result to the creation of a competitive advantage in its industry. Understanding these forces linked to rivalry among existing firms in an industry is a must. This is the reason why Apple has succeeded to penetrate the market with its differentiated product offerings (Apple Incorporated). It was able to understand this force and create the necessary products that will not be shaken even if there is presence of substitutes and potential market entrants. The above-mentioned tools, once properly used will provide the opportunity to consider the strategy and strategic plan in search of competitive advantage. The idea of competitive advantage may be broad, but it speaks of what the organisation is capable of doing that is of unique value for the mean time that the other organisations might not be capable of doing or cannot copy at some point (Nilsson and Rapp 39). So far, the work at hand has just presented the concepts linked to what a strategy is all about. Works Cited Apple Incorporated. Company website. 2013. Web. 26 Nov. 2013. . Boone, Louis E., and Kurtz, David L. Contemporary marketing update 2013. 15th ed. Mason, OH: Cengage Learning, 2011. Print. Grunig, Rudolf and Richard Kuhn. Process-based strategic planning. London: Springer, 2010. Print. Information Resources Management Association. Effective utilization and management of emerging information technologies. Hershey, PA: Idea Group Incorporated, 1998. Print. Karami, Azhdar. Strategy formulation in entrepreneurial firms. Hampshire: Ashgate Publishing Ltd., 2012. Print. Miltenburg, John. Manufacturing strategy: How to formulate and implement a winning plan. 2nd ed. New York, NY: Productivity Press, 2005. Print. Nilsson, Fredrik, and Birger Rapp. Understanding competitive advantage: The importance of strategic congruence and integrated control. Berlin: Springer, 2005. Print. Porter, Michael E. Competitive strategy. New York, NY: Free Press, 1998. Print. Porter, Michael E. Competitive advantage: Creating and sustaining superior performance. New York, NY: Simon and Schuster, 2008. Print. Schnaars, Steven P. Marketing strategy. New York, NY: Free Press, 1998. Print. Read More