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Strategic Management
www.youtube.com/watch?v=sU3FLxnDv_A
In this video, Erica Olsen clearly and accurately explains the notion of the strategic management process using schemes. First, the company should determine the mission statement clarifying its paramount goal. It is important to identify the starting point from both internal and external angles including staff, customers, competitors, and other integral issues of any organization. The information presented above is to be synthesized in Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis suggesting the possibility of assessing the actual situation and the companys strategic outlook derived from a study of the advantages, disadvantages, market opportunities, and risks of the company (Hitt, Ireland, & Hoskisson, 2015).
SWOT analysis has managerial and strategic values binding together the factors of the internal and external environment and planning potential resources and capabilities. Therefore, one clarifies the vision of the organization and can move to the planning process.
After that, it is essential to designate the long-term strategic target that would comprise finance, customer, operational excellence, and people. The overall target should be divided into several short-term goals applying Specific, Measurable, Actionable, Realistic, and Time-Bound (SMART) goals tool (Hill, Jones, & Schilling, 2015). Olsen states that it is better to set SMART goals for each year of operation both on functional and individual levels (Virtual Strategist, 2012).
The speaker also provides some key issues concerning the execution of the strategic plan. In particular, every employee in the organization should have an action plan that identifies their responsibility area. Meetings and discussions conducted promptly would contribute to the successful implementation of the strategic plan as well. Finally, the organization should have uniform language and documentation to communicate with employees.
www.youtube.com/watch?v=rJ2tmqRkiCM
David Kryscynski emphasizes that Strategic Management aims at considering the business as a whole. To answer the question of what determines the corporate performance, the speaker articulates the strategy term. Precisely speaking, a good strategy is expected to restrict the organization (Witcher & Chau, 2010). The strategy is a boundary marker that defines the long-term development of the organization relating to the scope, forms of activity, and position of the company in the market. The strategy includes three fundamental questions:
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Where does the organization compete? The answer should include the attractive market opportunity ensured by resources.
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How does the organization compete? It depends on resources and capabilities that might be tangible such as the oil field or intangible such as skills or company image (Hiles, 2011).
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How does the organization execute? While the two above questions constitute the strategy formulation, the third question concerns the implementation of the strategy and comprises leadership, motivation, and others.
Kryscynski (2012) stresses that all the questions are interrelated and necessary to achieve high results. Most of the companies experience failure as they do not count for the mentioned fact.
The speaker represents the strategy as a tripod stool based on the following components:
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perspective market opportunity, where the external analysis focuses on competitor analysis and industry analysis as well as the development of the latter;
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necessary resources and capabilities, where the internal analysis involves business level and corporate level;
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execution is the implementation of the strategy based on incentive, control systems, and the organization structure.
It is very significant to pinpoint that each of the above components is essential for successful strategy implementation.
www.youtube.com/watch?v=S9O2oPbT3fs&list=PL7F74CEF95B15B999
How to Develop Competitive Advantage video examines the fundamentals of how to determine the area where the organization would be the best in delivering the quality to customers. According to Abraham (2012), the strategic DNA is the core of the competitive advantage. There are three substantial components of the competitive advantage considered by the speaker on the example of Bikram Yoga:
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Company name. Bikram Yoga is a name that attracts customers by its creativity.
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The best area to develop. Productizing the yoga experience allowed the company to become successful
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The reason for success. The company offers the package for franchising so that customers might visit their centers and exercise the same program all over the world. It plays a principal role in the development of the competitive advantage as successfully operating departments enhance the companys profit and allows receiving accurate information about markets, competitors, products, and technologies. An important competitive advantage is determined by the goals and motivation of managers and staff of the company. According to Hitt, Ireland, and Hoskisson (2015), there is also the regional dimension of the competitive advantage acquisition. Consequently, the organizations operating in the areas that allow rapid accumulation of required resources and skills are the most likely to obtain the competitive advantage.
To sum up, the key question to be asked to determine the competitive advantage is what are you best at? (Virtual Strategist, 2008). It might be useful to ask employees and customers as they can help to observe the situation from different angles. What is more important, the competitive advantage should be integrated into the companys strategic plan and support its mission, vision, goals, and objectives.
www.strategyand.pwc.com/perspectives/2015-consumer-goods-trends
The article examines 2015 consumer packaged goods (CPG) trends, namely, fragmentation and simplification. Consumers disposable incomes are lowering, and their attitudes towards brands are changing (Shriram, 2015). The article analyzes both developed and emerging markets stating that the growth is evident yet more and more customers tend to focus on higher-quality food and other packaged goods rather than on value.
Further, the individual behavior of the peripatetic consumer that is pluralistic should be noted. For example, the customer purchases three different products for different purposes: a premium label in a bar, a cheaper brand for home, and another one for guests. Consequently, he visits stores, specialty shops as well as discounters. In response, the market offers various channels to purchase goods. There are small convenience stores, hypermarkets, dollar stores, online retailers, and plenty of others. As a result, consumers might find the required products with appropriate quality and cost that causes the demand increase for goods.
The article also points out the significance of media that was fragmented with the emergence of digital content. The Web, mobile, social media, TV, and other channels have their particular audience, requirements, and economics (Hitt, Ireland, & Hoskisson, 2015). The media channels impact the way CPG companies organize their performance by creating their commonly recognized image and reputation.
The example of Unilever demonstrates that even in a crisis, the company can preserve its status and customer appeal. At the same time, retailers tend to simplify the selling process by innovating the ways of communication and merchandising (Hiles, 2011).
Besides, the article supposes some crucial capabilities to ensure and enlarge the fragmentation of the market such as building comprehensive data, expanding the portfolio of retail channels, minimizing complexity, elaborating analytical tools, and others.
www.youtube.com/watch?v=mYF2_FBCvXw
The interview with Professor Michael E. Porter reveals the five competitive forces that shape strategy. This strategy model aims to adapt to the competitive environment (Hill, Jones, & Schilling, 2015). Each force in Porters model represents a different level of competitiveness of the goods:
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industry rivalry that is the core of the competitiveness;
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bargaining power of buyers, who can have an impact on the competitiveness of companies as they are, in fact, consumers of goods and ensure the market existence;
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bargaining power of suppliers, who affect the competitiveness as the owners of the resources for the production of industrial products;
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threat of new entrants. Porter identifies six key barriers to entry into the industry: economies of scale, product differentiation and the strength of existing brands, capital demand, high fixed costs, access to distribution channels, and government policy;
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threat of substitute products.
Porter claims that these elements of the market are the driving forces of market competition. The competitive analysis by Porter helps to determine the intensity and extent of the competitive forces in the industry finding a position, in which the company will be maximally protected from the impact of competitive forces (Hubbard, Rice, & Galvin, 2015). More to the point, the golden rule of Porters model is the following: the weaker the influence of competitive forces, the more opportunities to obtain high profits in the industry (Harvard Business Review, 2008). Conversely, the higher the impact of competitive forces, the higher the probability that no company will be able to provide high profitability while the industry average profitability is determined by the most powerful competitive forces.
www.youtube.com/watch?v=GChy_5NdPwk
This video is a four people conversation in the video chat, where they discuss the Strategy Smackdown. Sometimes being a second-mover of the business is better than being the first one as the company might learn the experience of the previous companies and improve upon them.
The leading of the conversation asks the following question: Do participants like the idea of being a first mover? Three participants answer negatively. Scott Gerber confirms his answer by the argument that there is certainly some other startup working in the same area over the same product that might create the additional difficulties (StartupNationTV, 2011). Instead, it is better to wait and observe the corresponding market learning what is working and what is not (Abraham, 2012).
The second participant nicknamed Rievalesonsky states that the first mover has to introduce a completely new concept and pay attention to all the connected issues that were not experienced before. Lastly, the third participant notes that the startup is usually difficult to initiate and to receive high profits, especially at the beginning of the performance.
What is more important, there is a difference between inventiveness and intervention. The latter assumes the enhancement of the product including its qualities, price, or other criteria to meet customers requirements while inventiveness means the creation of something innovative that is much more difficult to implement (Witcher & Chau, 2010). The leading of the discussion provides the counterargument claiming that competition creates opportunity. In response, one of the participants supports his idea and mentions the African market, where inventiveness might be essential as it is the emerging market. However, the other participant replies that African customers are quite familiar with basic brands and products to distinguish what is good and what is not.
www.youtube.com/watch?v=bl5cyZlay4k
The core question of the competitive strategy is associated with the customer, the company, and the competitor concepts. Companies compete for customers choices (Hitt, Ireland, & Hoskisson, 2015). Professor Joe Urbany examines the notion of the customer circle reflecting the value that is needed by customers and including requirements along with benefits. The second circle contains the information concerning issues valued by customers in a particular company. The above mentioned interconnected circles form the positive value to deliver goods effectively.
Further, the speaker represents the connection of the customer, the company, and the competitor circles and seven areas of their interconnection. However, the area of the customer and the company contiguity marked as A is the most important (25urbany, 2011). The speaker emphasizes that the competitive advantage focuses on the value that the company creates for customers. Therefore, the company should determine its competitive originality to attract customers and succeed.
Seeing the above issues, it becomes obvious that area A designates Points of Difference (PODs), in other words, the distinctive competitive advantage while area B illustrates Points of Parity (POPs) or stakes of the company. According to Shankar and Carpenter (2012), PODs are the attributes and advantages of the brand, which are strongly and positively associated with it by consumers. PODs emphasize the functionality or brand image, quality, low prices, and other advantages. In their turn, POPs are common to all goods of a particular type or several brands. They are not always unique and might be categorical, that, in the opinion of consumers, define the type of product and are considered signs of reliability, and competitiveness that is intended to neutralize competitors PODs.
References
25urbany. (2011). Competitive Strategy in 3 Minutes. Web.
Abraham, S. C. (2012). Strategic planning: A practical guide for competitive success (2nd ed.). Bingley, UK: Emerald Group.
Harvard Business Review. (2008). The Five Competitive Forces That Shape Strategy. Web.
Hiles, A. (2011). Reputation management: Building and protecting your companys profile in a digital world. London, UK: Bloomsbury Information.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2015). Strategic management theory: An integrated approach (11th ed.). Stamford, CT: Cengage Learning.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2015). Strategic management: Competitiveness & globalization: Concepts and cases (11th ed.). Stamford, CT: Cengage Learning.
Hubbard, G., Rice, J., & Galvin, P. (2015). Strategic management: Thinking, analysis, action (5th ed.). Melbourne, Australia: Pearson Education Australia.
Kryscynski, D. (2012). Introduction to Strategic Management. Web.
Shankar, V., & Carpenter, G. S. (2012). Handbook of marketing strategy. Cheltenham, UK: Edward Elgar.
Shriram, K. B. (2015). 2015 Consumer Goods Trends. Strategy. Web.
StartupNationTV. (2011). Strategy Smackdown First Mover Advantage Or Disadvantage. Web.
Virtual Strategist. (2008). How to Develop Competitive Advantage. Web.
Virtual Strategist. (2012). What is Strategic Planning, Really?. Web.
Witcher, B., & Chau, V. S. (2010). Strategic management: Principles and practice. Andover, UK: Cengage Learning.
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