Strategic Management: Competitors Of Organizations - Essay Example

Strategic Management: Competitors Of Organizations INTRODUCTION Strategic management is considered as a systematic analysis of all those factors associated with the customers of a particular company and all those competitors of a particular organization. The primary objective of strategic management is to reach the broad objectives of business that mainly comprises of strategic priorities and corporate policies. Business policies, on the other hand are considered to be broad frameworks that a company follows in order to remain competitive in the market place (Wheelen and Hunger 1-250). THESIS STATEMENT This paper intends to identify all those factors associated with strategic management and business policies from the broad business frameworks provide in a particular book namely: ‘Strategic Management and Business Policy: Toward Global Sustainability’. 1. ON THE BASICS – a. Strategic management is an evolution and a destination. The concept of strategic management can be understood as a very broad concept as it involves high end initiatives that are adopted by a company in order to remain competitive in the global business environment. The strategic management can be regarded as an evolution because this process considers all those broad activities through which the external and the internal environments of a company are examined in an in-depth manner. All these activities are undertaken for the purposes of estimating the requirements of resources and manpower which are required for further expansion of a company. Considering all these aspects, it can be viewed that strategic management is an evolution and a destination. The process of strategic management is a continuous process which requires a company to consider the broad policies and business strategies for determining the future course of action. All these aspects can be related to evolutionary process that facilitates a company to accomplish its business goals and objectives. In other words, strategic management is a means that enables companies to reach the ultimate destination (Wheelen and Hunger 1-250). b. Team Company is or is not a ‘strategic management’ firm. Each and every firm may not be considered as firm having the capacity of ‘strategic management’. This particular aspect applies in relation to the team company in the concerned book. It has been observed that the team company is a ‘strategic management’ firm as it articulates its business mission and objectives coherently and the managers within the firm are duly involved in executing various actions based on pre-determined plan. . Furthermore, policies have been designed in order to execute the operations of the business more effectively (Wheelen and Hunger 1-250). c. Team Company’s mission statement and the 2014 goals and objectives of the firm. Mission statement of each and every company may have certain similarities or dissimilarities as well. For instance-The mission statement of Google is to organize world’s information in such a way that it is made universally useful and accessible. In the similar context, Panera’s mission statement included “A Loaf of bread in every arm”. This statement signifies the meaning and importance of bread in each person’s life. Correspondingly, the mission of the team company is to achieve its broad objectives by meeting the needs and requirements of its employees as well as customers effectively. Furthermore, the goals and objectives of the team company are to attain growth and considerable return on investment by offering superior quality services and products (Wheelen and Hunger 1-250). 2. ON CORPORATE GOVERNANCE- a. Three traditional roles of the board of directors. 1) Hiring along with firing of the top management and the CEO The board of director has the full authority to hire and also fire any top level employee including a CEO if he/she is found to disregard the rules and regulations of a company (Wheelen and Hunger 1-250). 2) Supervision, monitoring and controlling of the top management The board of directors performs these broad functions for the primary objective of managing the operations of a company in an appropriate manner. Therefore, it establishes proper order and introduces new rules and regulations to manage a company (Wheelen and Hunger 1-250). 3) Approving and reviewing the use of various resources in the organizations There are certain issues pertaining to shareholder’s lawsuits and civil charges that may arise when the governance is not delivered in a formative manner. These forms of errors also lead to poor form of corporate governance (Wheelen and Hunger 1-250). However, in order to mitigate this broad issue, efforts are being made by the top management for creating new resolutions in the company. This aspect is targeted to determine the broad improvements in the governance of the board. b. Identification and evaluation of a major philanthropic initiative/program. The team company is engaged in various types of philanthropic contributions that mainly comprises of providing fruitful training to the unemployed and also by the inclusion of day care centers which facilitates the company to meet its social obligations along with accomplishing its business objectives (Wheelen and Hunger 1-250). 3. ON COMPETITION & PORTER’S FIVE FORCES a. Identification and discussion of the team company’s competitive advantage and core competency. The aspect of competitive advantage plays a very important role in the context of achievement of high end business results. With the fulfillment of this particular aspect, it also provides great aid to a company for remaining highly competitive towards other competitor (Wheelen and Hunger 1-250). In relation to the identification of the team company’s competitive advantage, it has been observed that that the term sustainability is given the prior importance and this particular term is used for defining the term of competitive advantage. The term sustainability has been defined to include something more than ecological concerns along with natural environment. According to the statements provided by Crane and Matten, it has been learned that the term sustainability can be considered to comply with broad terms including social along with economical concerns of an organization. However, this term is considered to be very important and with a sustainable company is likely to achieve high end results (Wheelen and Hunger 1-250). The term core competency holds primary importance in the overall context of an organization. In relation to the identification of the team company’s core competencies, it has been duly realized that core competency of Avon’s products is the expertise comprising of door-to-door selling. This particular marketing strategy is considered to be very effective as it helps it creating a wide reach with the consumers. A company can establish core competency by way of making innovative strategies i.e. new product development. This particular strategy is considered to be very effective as it provides great aid in attracting large customer base. In relation to another well known company i.e. FedEx, their core competency lays on the aspect of their excellent operational strategy as they well known for introducing new applications of information technology in their broad operations. This factor makes their operational activities a very strong one (Wheelen and Hunger 1-250). However, a core competency is considered to be an integration along with coordination of all the broad capabilities that an organization and its employees posses and based on the strategies of core competency and competitive advantage of the above mentioned team company, it is clear that these strategies will act as a magic sauce and will help the companies to stay in the game for long term (Wheelen and Hunger 1-250). b. Five Forces Model of the team company. According to Michael Porter, a five forces model comprises of different elements namely potential entrants, buyers, suppliers, substitutes, industry competitors and other stakeholders. All these broad elements play a very important in the market. These elements establish broad dimensions as they are considered to be the primary bodies in a business environment. In relation to five forces model of the team company, it has been realized that the there exists a strong competition in the overall technological market. It has been found that the technology and PC industry was once dominated by large names such as Compaq, IBM and Apple. However, with the passage of time this particular industry has been able to achieve high amount of objectives. This particular industry is now being dominated by other companies as well and companies such as Dell among others have been able to increase the level of industry competitions to a very large extent (Wheelen and Hunger 1-250). Also, it has been realized that if the price of coffee keeps on increasing at a rapid pace then it is certain that the consumers will be switch to other substitute’s namely tea. Thus, by taking this aspect into consideration, it can be determined that the consumers are likely to be affected by the aspects of substitutes to a certain degree (Wheelen and Hunger 1-250). According to the words of Wheelen and Hunger, a sixth force can be considered to be another force which is needed to be added to Porter’s Five Forces model. According to both the theorists, a sixth force is needed to be included in the porter’s list for the primary purpose of including a wide variety of groups of stakeholders. Some of the groups can categorized into governments, creditors, local communities, unions, trade associations, and other special interest groups among others (Wheelen and Hunger 1-250). 4. ON THE VALUE CHAIN a. Best Business model. Business models provide great aid to companies for executing broad business strategies for the fulfillment of its common business objectives. In relation to identification of the business model that best describes the team company is the particular business model that has been utilized by IBM. It has been noticed that a new vision for the company was developed. The company took the decision of expanding its business model by entering into the service segment from the segment of making computer hardware. This strategy indeed proved to be very effective from a business perspective. It helped the company in attaining a larger base of customers as with the utilization of this model the company became very much successful in providing end-to-end solutions to the consumers. In addition, it also provided great aid to the company for making broad decisions pertaining to improvement of its technology which further benefitted the company (Wheelen and Hunger 1-250). b. Components of Porter’s value chain model. A value chain is considered to be a chain which links the activities and aspects of value creation. In the value chain process, there are specific set of activities/components that begins from collection of the raw materials and fulfillment of various activities that comprises of servicing, production, marketing, and distribution of the finished product to the end consumers. By establishing a value chain, it is determined that a company can reap large amount of benefits. For instance, Hewlett-Packard has been able to utilize the aspects of value chain in a very appropriate manner. It has been studied that the company has drastically improved its services and product delivery strategies by utilizing the broad aspects of value chain. The component of value chain very well applies to the Chief Executive Officer (CEO) of a company as its components are widely utilized by the topmost companies and their CEOs. The aspect of value chain largely applies to other major companies such as Ford Motor Company, Amoco, Procter and Gamble and their CEOs (Wheelen and Hunger 1-250). However, from an in depth analysis, it has been analyzed that there are certain e areas within the value chain that are needed to be strengthened. The broad areas include a company’s competency skills to deliver the products and services in a timely basis. Other areas include all those broad areas in which a company needs to deliver their services in a customized and formative manner. In relation to the profit/margin goal of the firm, it can be asserted that the primary goal of the firm would be to maximize the profits with the improvement in major operational and marketing activities. If this aspect is considered then there are strong possibilities of the firm to increase its profitability by at least 10 % in the next financial year of 2014 (Wheelen and Hunger 1-250). 5. ON GENERAL STRATEGY- a. Current business and corporate strategies. In relation to identification of the current business and corporate strategies of the team company, it has been duly analyzed that team company has been following an effective corporate strategy aimed at improving its income structure. It has been found that the company has been following the concept of retrenchment. It was seen that the turnover of the company has fetched considerable marginal profits to the company. The company id further focused on concentrating upon diverse business segment. This measure provided great aid to the company for yielding high returns and helped the company in earning high amount of income as well (Wheelen and Hunger 1-250). In relation to the current business strategy, it has been learned that the company is firmly engaged in competitive business strategy which comprised of adding of additional services for the customers in their stores. Correspondingly, numerous services are included which provided great aid to the company for attaining a larger customer base. This particular strategy also helped the company in making their services more efficient in the eyes of their consumers (Wheelen and Hunger 1-250). b. Strengths and weaknesses. Each and every business strategy has certain strengths along with weaknesses. In relation to identification of the current strategies of the company, it can be regarded that both the strategies had been able to attract the consumers which is a very important aspect. In addition, both these strategies were developed by considering the current marketing trends. Thus, these factors can very well be considered to be the strengths as it helped both the team company to gain an upper marketing edge (Wheelen and Hunger 1-250). In relation to the weaknesses of the both the strategies, there were certain weaknesses associated with the company which can be reflected while designing its corporate and business strategies. It can be regarded that its strategy is very regular as they took the decision of improving their services. There was nothing extraordinary about their strategy and similar strategies can be adopted by any company (Wheelen and Hunger 1-250). c. Most urgent decision. In relation to identification of the most urgent decision needing to be made to ensure the competitive sustainability of the company or to move toward a sustainable competitive advantage it has been learned that the team company was able to make a strategic decision for the purpose of moving into a new direction. The company realized that it needs to move in relation to the demand and requirement of the customers. The company came into the realization that with the intent of serving the customers in the best possible way, it will be highly beneficial for the company. It is however felt that another decision that the company could have taken in an urgent basis should have been a thorough analysis of the overall business. This way the company could have identified the current market trends and could have made much more strategic decisions (Wheelen and Hunger 1-250). CONCLUSION From the above analysis, it has been determined that the concepts of strategic management and business policies hold primary importance in the attainment of the broad business objectives of a company. It has also been determined that with the intent of proper strategic management, a company can accomplish all the broad objectives and can profitably sustain in long run. . Thus, for the completion of this paper, various aspects concerning; value chain, Porter’s Five forces models and the different aspects of corporate and business strategies among others have been specifically discussed upon. Work Cited Wheelen, Thomal L. and J. David Hunger. Strategic Mangement and business policy: Toward global sustainability,13th ed. United States: Prentice Hall, 2011. Print. Read More