Minimum of 400 words in the body Minimum of 2 sources from the literature in addition to course texts
Gamble, J., Peteraf, M., & Thompson, A. (2019). Essentials of strategic management: The Quest
for Competitive Advantage. (6th ed.), New York, NY: McGraw Hill Higher Education
Keller, T., & Alsdorf, K. L. (2012). Every good endeavor: Connecting your work to God’s work.
New York, N.Y: Dutton, Penguin Random House.
Krogerus, M., & Tsch¤ppeler, R. (2018). The decision book: 50 models for strategic thinking.,
(Revised ed.), New York, NY: W. Norton & Company, Inc.
Rumelt, R. (2011)., Good strategy/bad strategy: The difference and why it matters., New York,
NY: Crown Busines
Content must include:
Summary of the authors Main Thread no less than 125 words · What you agreed with, did not agree with and why no less than 125 word
APA FORMAT A MUST FOR THE REPLY PLEASE
Workers that seek to elevate themselves to accepting Jesus Christ as their savior must embark on a journey that calls for a different set of virtues, view of humanity, source of guidance, and a different audience (Keller & Alsdorf, 2012). Adopting a new mindset and understanding of these elements allow these employees to launch themselves in an environment unknown to them and prosper because they have wholeheartedly, sincerely, and selflessly devoted their lives to Gods purpose. Organizations will make a leap of faith such as this when they choose to expand their organizational scope for the purpose of achieving a stronger competitive advantage. Having a competitive advantage is a standard goal for many organizations and as one strives to attain this stature in the marketplace, there are ways of strategically arranging objectives to accomplish this goal. Throughout this discussion, one will elaborate on the strategic approaches companies can employ in order to develop a successful competitive advantage, how to choose a competitive scope that best benefits an organizations objectives, and a decision method that makes choosing a competitive approach more productive.
Process: Deciding on a Competitive Approach
Having a competitive advantage is vital for the survival of an organization and shows that they have achieved a form of success with their current strategic operations. Considering this drive for prosperity, organizations can rely on the development of competitive strategies. These types of strategies serve as managements strategic plan and entail offering the most desired products and services and a price that customers will appreciate, elevating the organization to a better market position, countering rival movements, and responding to market changes (Gamble, Peteraf, & Thompson, 2019). While each competitive strategy can be similar, there are distinct differences based on whether the organization has a broad or narrow target market and whether the companys competitive advantage stems from lower costs or differentiated products (Gamble et al., 2019). Bearing these aspects in mind, one should seek to implement one of the five generic competitive strategies: low-cost provider strategy, broad differentiation strategy, focused low-cost strategy, focused differentiation strategy, or best-cost provider strategy (Gamble et al., 2019).
The low-cost provider and focused low-cost strategies require organizations to position their overall costs to ones that are lower than their competitors, but the latter also focuses on niche markets (Gamble et al., 2019). Low-cost leadership is achievable provided organizations execute value chain activities for a more economical cost than competitors and by amending current practices to eliminate these costly expenditures (Gamble et al., 2019). Examples of these practices include taking advantage of experience and learning curves, substituting lower cost inputs when it does not affect quality, and being open to outsourcing in addition to selling directly to consumers, streamlining operations, and improving supply chains (Gamble et al., 2019). Gamble et al. (2019) caution one to not take price-cutting to an aggressive level where profitability is unattainable.
The broad and focused differentiation strategies show organizations developing their products or services to cater to either a broad range of customers or customizing their outputs to meet the specific needs and wants of a particular group of customers (Gamble et al., 2019). This relies on organizations focusing on quality, innovation, performance superiority, and other identifiable features; whereas, revitalizing techniques require businesses to coordinate with their partners and suppliers to increase customer value and needs (Gamble et al., 2019). The text also identifies several possible reasons that a differentiation strategy could fail: easily replicated, customer fails to see value in the uniqueness, and overspending that takes away from profitability.
Finally, the best-cost provider strategy allows organizations to develop strategic approaches that not only have the best costs and prices among competitors, but also facilitates a higher differentiation of products and services (Gamble et al., 2019). Careful consideration must be given to choosing which strategy is employed due to the inherent contradictions of costs versus differentiation (Amoako-Gyampah & Acquaah, 2008). While each strategy stands to gain an overall competitive advantage, many organizations break down their organizational processes and apply the strategic approaches to specific facets of the enterprise (Amoako-Gyampah & Acquaah, 2008). Furthermore, the selection of a strategy does not warrant immediate results; organizations must effectively implement it within its practices (Campbell-Hunt, 2000). One study showed a beneficial correlation between accurately implemented strategic approaches and enhanced reputations, cost-efficiencies, speed, reliability, and meeting delivery promises (Campbell-Hunt, 2000).
Strategic Thinking: Deciding on a Competitive Scope
Elevating an organizations position in the market requires a thoughtful analysis of its scope of operations. These decisions impact the extent of an organizations activities, market reach, geographic market presence, and product and service segments (Gamble et al., 2019). With a vertical scope, organizations expand their competitive and operating scope within its current industry; whereas, the horizontal scope seeks to expand the range of the product and service segments via mergers and acquisitions (Gamble et al., 2019). The text refers to many other dimensions to the scope of a firm, but one will elaborate more on the process and benefits of a geographic and production/distribution scope.
Geographic Scope
As Rumelt (2011) states, To create strategy in any arena requires a great deal of knowledge about the specifics (p. 372). Having an eye for markets outside of ones domestic market, many organizations will seek globalization. This strategic maneuver refers to one having a geographic scope and may be considered for the following reasons: new customer base, lower costs for both economies of scale and inputs, exploitation of core competencies, and gaining access to resources and capabilities previously inaccessible (Gamble et al., 2019). Being in a new market, especially from a global perspective, requires organizations to develop strategies based on a different mindset. The geographic scope asks that managers be considerate of an unfamiliar demographic and culture, advantageous of lower location-based costs, receptive to knowledge sharing opportunities, cognizant of adverse exchange rates, and knowledgeable of local government policies (Gamble et al., 2019). Furthermore, Gamble et al. (2019) identify five ways that organizations can encroach on foreign markets: exports, licensing, franchising, foreign subsidiary, and alliance/joint venture strategies.
Production/Distribution Scope
Just as described in the horizontal scope, mergers and acquisitions are a quick way to expand ones production and distribution scope. Such a strategic move allows organizations to acquire new products and services, identify more cost-efficient operations, expand globally, apply new technologies, and creating an empire in the marketplace by combining the resources of two entities (Gamble et al., 2019). One can also participate in outsourcing, strategic alliances, and partnerships as a way of expanding the firms competitive scope. This requires the joint partnership or ownership of a product or service with another competitor (Gamble et al., 2019). While there seem to be many notable benefits to expanding ones production and distribution scope, failure holds a substantial place in the endeavor. The cost savings may not be as beneficial as one had expected, competitive strategies may take longer than expected to produce fruitful results, the merging of corporate cultures may not easily transition together or it may cause vital employees to leave, and the two entities having a difficult time bringing the different priorities and objectives together (Gamble et al., 2019).
Decision Model
Considering the many unknown factors that individuals encounter when embarking in a new area, one feels that the Rumsfeld Matrix provides the best model for one to follow. This design teaches organizations to be cognizant of the knowns and unknowns and breaks it down further into four different types: known knowns, known unknowns, unknown knowns, and unknown unknowns (Krogerus & Tschappeler, 2017). These parameters begin with the (a) known knowns, which are the planned risks and countermeasures for those risks; (b) known unknowns being the risks organizations know are there, but are unforeseen; (c) unknown knowns can only be described as ones intuition; (d) unknown unknowns are things not considered because there was no knowledge of their existence (Krogerus & Tschappeler, 2017). While some of these elements are difficult to plan for, they alert organizations that elements exist that will cause disruption to planning and operational purposes. These risks are inherent in all endeavors, especially those that seek to expand in new territories.
As organizations have an understanding of the types of risks encountered when expanding competitive strategies and scope, one would also consider the SWOT (strengths, weaknesses, opportunities, and threats) analysis decision model. This decision model compares the strengths and opportunities of an organizations desires with the inherent weaknesses and threats with making such a venture. Many studies also concluded that employees who were privy to the information found in a SWOT analysis were more apt to performing functions that were contradictive because they had a more clear understanding of the overall project (Krogerus & Tschappeler, 2017). These models used in conjunction with one another will allow organizations to be more capable of executing an outward or global move.
Conclusion
The logical progression in growing a business requires organizations to advance outside of their comfort areas and elevate ones position competitively. A competitive approach can entail several aspects, but discussed in this paper were the competitive strategies of low-cost provider, broad differentiation, focused low-cost provider, focused differentiation, and best-cost provider. As gleaned through the material, each item performs differently for an organization based on whether they choose to be competitively priced, offer unique products, or a combination of the two. The discussion also identified two types of competitive scopes that organizations must also consider: geographic and product/distribution. As seen with the geographic scope, organizations undertake the endeavor of expanding outside of ones domestic market. The product/distribution scope advances the parameters of product variations, production methods, and distribution outlets by merging or acquiring other organizations. One also elaborated on two different decision models that can strengthen the execution of this type of enterprise. The Rumsfeld Matrix makes organizations aware of the four different types of risks while the SWOT analysis helps organizations to compare the level of vulnerabilities and threats with the potential strengths and opportunities of a project. Overall, organizations should understand that doing something challenging naturally comes with risks; however, by understanding the competitive approach they wish to take and the scope by which to hone in on, they will be better capable of strategically executing their desires.
Annotated Bibliography
Amoako-Gyampah, K. & Acquaah, M. (2008). Manufacturing strategy, competitive strategy and firm performance: An empirical study in a developing economy environment. International Journal of Production Economics, 111(2), 575-592. doi:10.1016/j.ijpe.2007.02.030
The material presented in this article seeks to show a correlation between manufacturing strategy and competitive strategy. It can be seen that competitive strategies demand an expected result from manufacturing to meet operational performance measures, but that manufacturing strategies are not aligned back to these competitive strategies. The literature also seeks to individually investigate the impacts of the competitive advantage with firm performance, manufacturing strategies with firm performance, and the alignment of both strategies to firm performance. Using the developing economy in Ghana, the research proposes several hypotheses that believe the strategies singularly influence firm performance and, that using the competitive strategy to guide manufacturing strategy, it will have a higher impact on performance than will strictly using competitive strategy on performance. As the author explains the results, it is determined that quality is the only facet of the manufacturing strategies that directly impacts firm performance. It is also seen that there is no direct correlation between competitive strategies and firm performance; however, using quality in the manufacturing strategies allows competitive strategies to influence firm performance. Additionally, the local culture of Ghana prefers quality, and this is seen as a trending characteristic in developing economies. Overall, the research presents the notion that organizations in smaller economies can withstand the pressures of competitors provided they emphasize quality.
Both authors are professors at the Bryan School of Business and Economics and the University of North Carolina and have contributed material to several different publications. The publication used for this discussion provides many notable articles on science-based research to include physical science and engineering, life sciences, health sciences, and social sciences and humanities. One found the information presented in this research as beneficial to the discussion because it identified that competitive strategies are not stand-alone fix actions that organizations can employ. They are supplemental techniques to other strategies currently working in operations.
Campbell-Hunt, C. (2000). What we have learned about generic competitive strategy? A meta-analysis. Strategic Management Journal 21(2), 127-154. doi:10.1002/(SICI)1097-0266(200002)21:2<127::AID-SMJ75>3.0.CO;2-1
The article opens to describe the two elements that comprise the premise of generic competitive strategy. The first facet describes an organizations strategies based on the scope or size of the market in addition to whether the source of their competitive advantage stems from cost or differentiation tactics. The literature seeks to acknowledge the strength of the theory but provides that many have found it difficult to link theory with practical application. As the author seeks to exemplify the accepted use of competitive strategies, industries such as shipping, banking, and hospital services are cited as frequent users of the concept. Additionally, the literature shows how organizations apply the concept to internal operations like human relations, information technology, manufacturing, and planning processes. It then describes how many organizations fail to choose the appropriate strategy based on changing external environments and experience lack-luster results. Furthermore, the article finds that many believe the competitive strategies are outdated and more associations between the concept and empirical investigations are warranted; therefore, the author conducted three meta-analyses. The results conclusively show that designs are either cost or differentiated based and it is very rare to find a hybrid strategy where organizations seek to employ both types of strategies. The author uses these results to plead with other scholars on the need for strategies that form a more complete link between competitive strategy and firm performance.
The author of this work shows a passion for the theories concerning firm performance and competitive advantages. Based out of the Centre for Sustainability in New Zealand, the author seeks to continue working on the application of complex systems theory for organizations suffering from climate change issues. This author has published over 50 different types of literature and contributed this article to the Strategic Management Journal. This journal provides diverse forms of information that centers around strategic management practices. One felt the information contributed to this paper helped to show a practical application of the principles and how they truly affected operations within the business.
References
Amoako-Gyampah, K. & Acquaah, M. (2008). Manufacturing strategy, competitive strategy and firm performance: An empirical study in a developing economy environment. International Journal of Production Economics, 111(2), 575-592. doi:10.1016/j.ijpe.2007.02.030
Campbell-Hunt, C. (2000). What we have learned about generic competitive strategy? A meta-analysis. Strategic Management Journal 21(2), 127-154. doi:10.1002/(SICI)1097-0266(200002)21:2<127::AID-SMJ75>3.0.CO;2-1
Gamble, J. E., Peteraf, M. A., & Thompson, A. A. (2019). Essentials of strategic management: The quest for competitive advantage. McGraw Hill Education, New York, NY
Keller, T., & Alsdorf, K. L. (2012). Every good endeavor: Connecting your work to God’s work. New York, N.Y.: Dutton
Krogerus, M., & Tschappeler, R. (2017). The decision book: 50 models for strategic thinking. W. W. Norton Company, Inc. New York, NY
Rumelt, R. P. (2011). Good strategy bad strategy: The difference and why it matters. Crown Business, New York, NY
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