Do you know how to come up with competitive, successful business strategies for your company as a management? As the world changes constantly and unpredictably, competitive strategies are of great significance to the survival of a company among fierce competition, because the fact remains that every organization in a certain industry works hard to satisfy their customs as well as possible. In the Futurics article” Business Strategy”, Vu (2007) focuses his attention on essential features of a successful strategy and methods of developing and maintaining a competitive advantage. Vu’s conclusion of competitive business strategies associated with dynamic and flexibility, the comparison between the resource-based view and the industrial organization …show more content…
Vu states that if a company wants to be a lead among its competitors, it is expected to recognize its competitive advantages and underlying competitive advantages. Obviously, realizing self-merits enables corporations to know its market position generally in a specific industry. What is more, it is also a chance for firms to see its demerits when compared with others. Only when a company finds out what could unseat its contemporary strength and where is the advantage tomorrow, it is able to alter its business strategy so that the company can maintain adequate competence along with the variation of economic situation all the time. Exactly, “An organization’s competence is the key to good or poor performance and to survival.”(Johnson and Scholes, 2002, p149). All in all, there is no denying that being able to come up with a successful business strategy, management should consider various factors, like the flexibility of a strategy, two different views of capturing competitive advantages, and the significance of competitive advantages. Vu’s article does good job detailing different aspects of a good business strategy. As managements become more aware of how to develop business strategies, the economy will boost
Arthur, A., Thompson, Margaret, A., Peteraf, John, E. Gamble, A., J., Strickland III. (2014). Crafting & Executing Strategy: The Quest for Competitive Advantage 19e: Concepts & Cases. C6-C25.
There is no best way to formulate business strategy(s) and to adopt an approach, as many factors are key determinants of which strategy approach to be adopted.
An organization is established, it has some mission and vision. This mission and vision define its operation and research. To fulfill the organization’s mission they have to develop top level plans and sustain long term competitive advantage that is Strategy. Following this definition, when an organization has mission, develop a plan and understand the “sustainable” competitive advantage - where competitor cannot easily duplicate the firm’s strategy.
A successful business strategy will identify changes in the external trends in the market place. Plan out what the company’s future direction is. Set out the goals for the management team. It will identify a vision of where the company wants to be in the future. Keep all employees informed of the direction of the company.
In today’s world Globalization has led to transformation of many factors due to which firms must compete in a complicated and challenging environment. The main question that the companies have in the field of strategic management is to answer how to achieve competitive advantage. It is achieved when a firm exceeds the average industry standards. Or in other words when a firm outperforms its rivals and gain a competitive edge through combination of attributes . It is about how a company can leverage on the advantage to become profitable and do what they do best. Now it has become a crucial part of the market, every company is striving for competitive advantage. For example companies like Oracle and Microsoft are following a Resource Based View by using Technological assets.
Crafting a sound competitive strategy is fundamental to running a business. This statement is simple to write but a complex undertaking in practice. Competitive strategy is the mechanism used by organizations to create value for customers and gain an advantage over competitors. The organization gains a competitive advantage through activities that encompass designing, producing, marketing and supporting products2etc. The business strategies organize these activities to create a synergistic effect that maximize value for customers.
It is hard to define a “strategy” in one sentence but it could be defined as the “positioning an organization for competitive advantage”. Its main objective is to create value for stakeholders by providing customer value. (pg. 2) Strategies always change as the context in which strategy is developed always changes. For example, the evolution in the past fifty years has shifted from an industrial economics to a resource-based perspective to human an intellectual capital perspective. The can most definitely change strategies for business owners. New business ideas and concepts are created every day. A lot of different efforts are put into a corporation in order to enhance competitiveness. Sustainable superior performance can only be achieved if a company can reserve differences between itself and its competitors.
Strategy evaluation is an attempt to look beyond the obvious facts regarding the short-term health of a business and appraise instead those more fundamental factors and trends that govern success in the chosen field of endeavor. Strategy can also be defined as a set of objectives, policies and plans that, taken together, define the scope of the enterprise and its approach to survival and success. Alternatively, we could say that the particular policies, plans, and objectives of a business express its strategy for coping with a complex competitive environment. A good business strategy can be broadly categorized into functions like consistency, consonance, advantage, and feasibility.
The essence of competitive strategy for a company is to find a position in its industry where it can best cope with Porters Five Forces or can influence them in its favour. Once the forces (suppliers, buyers, substitutes, potential entrants and rivalry), and their underlying drivers have been diagnosed, a company is in a position to identify its strengths and weaknesses relative to the industry norms (Grant, 2013). This helps a company’s positioning so that its capabilities provide the best defense against the existing array of competitive forces, influence the balance of the forces or anticipate and respond to shifts in competitive balance before rivals recognise it. Not all industries have equal potential. They differ fundamentally in their ultimate profit potential as the collective strength of the forces of competition differs. High growth industries tend to present better growth opportunities. Successful fast-growth businesses scan the environment to identify new threats as they emerge, taking a broad view of internal and external risk issues. Slow growth industries lead to an intense competition for market share, price competition, advertising battles, and hence reduced profitability.
Business strategy is the means by which firm’s plans to achieve its goals and objectives. It can also be termed as organization long-term planning. The strategy covers periods between 3-5 years and sometimes longer. Businesses use two major types of strategy, general or generic and competitive strategies. The overall strategy involves strategies of growth, globalization and retrenchment. The competitive advantage includes low pricing, product and customer differentiation. We will look at the business strategy used by Marks and Spenser (Cole, 1997). The company is a British multinational located at Westminster London and specializes in clothes and luxurious food products.
Selecting a business strategy that details valuable resources and distinctive competencies, strategizing all resources and capabilities and ensuring they are all employed and exploited, and building and regenerating valuable resources and distinctive competencies is key. The analysis of resources, capabilities and core competencies describes the external environment which is subject to change quickly. Based off this information a firm has to be prepared and know its internal resources and capabilities and offer a more secure strategy. Furthermore, resources and capabilities are the primary source of profitability. Resources entail intangible, tangible, and human resources. Capabilities describe environment and strategic environment. Core competencies include knowledge and technical capability. In this section we will attempt to describe in detail the three segments which are resources, capabilities, and core competencies.
A good business strategy can help to identify trends in the business and marketplace in the future and present. It will also help to identify broader changes in the market like political, technological and social, and customer changes.
Depending on each business’ unique characteristics and, importantly, their preferred outcomes, business strategies are of different types. Similarly, business strategies are also dependent on the structure and function of an organization.
Firstly, there is a need to focus on the company competitive dimensions before embarking on the decisions. In this aspect, the Competitive capabilities are the Cost, Quality, Time, and Flexibility dimensions that a process or value chain actually processes and is able to...
In a world of free trade, growing competition and accessibility to foreign markets, the need for methodical market analysis and assumptions is steadily rising in today’s business environment. It is just a normal way of thinking to primarily intent to eliminate the financial before entering a new and foreign market. This suggests that enterprises have to develop an overall strategy for their business in order to gain competitive advantage and consequently market share. With the words of Michael E. Porter, professor at Harvard University and leading authority on competitive strategy, this desirable market success is indirectly linked to the individual structure of a market. The unique structure of a single market influences the strategic behaviour and the development of a competitive strategy within a firm. The competitive strategy finally decides whether a company performs successfully on the market or not. Referring to this interpretation of business success, M. E. Porter established his five forces framework that enables directives to gather useful information about the business environment and the competitive forces in industries.