Expert answer:Strategic Homework
Expert answer:Below are four (4) papers that need to be combined as one. Each paper was wrote based off of questions that were asked for that week. The questions are included in papers (2-4). Paper one speaks for itself. This paper must be six pages long (including title and reference). An abstract and reference page must also be included.
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strategic_management_assignment_week_four.docx
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Running head: ORGANIZATIONAL STRATEGY
ORGANIZATIONAL STRATEGY
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ORGANIZATIONAL STRATEGY
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STRATEGY MANAGEMENT
Organizations mission and vision are part of their success architecture. An organization
mission is what its business is. While the vision is the long-term direction the organization has.
In the case of Starbucks as an example, its mission statement reads, “to inspire and nature human
spirit- one person, one cup, and one neighborhood at a time” this explains why Starbucks has
grown globally quite rapidly (Aiello, 2014). It was founded in 1985 with a single store to 26696
stores worldwide (Sept, 2017 reports). The mission has guided Starbucks to success in China,
where many multinational corporations fail over cultural differences (Yang et al, 2016). The
vision of a company, on the other hand, is very long term, it remains unchanged over time.
Google’s vision statement reads, “To organize the world’s information and make it universally
accessible and useful” this explains why Google too, is a leading global firm. Starbucks and
Google have crystal clear visions and missions.
An organizations business model is built on two pillars customer value proposition and
the profit formula. This implies what value a customer will derive from using your product or
service. The higher the value perceived the higher the price customers are willing to pay. For
Google searching for information is free, their revenue generation model is through advertising.
In the case of Starbucks their roast premium coffee, it is a niche premium product. The more
customers they are able to serve the more revenue they collect. In terms of the profit formula,
Google makes money through advertising and selling data, on the other hand, Starbucks makes
many through providing value in the coffee it serves “Premium coffee- high quality.”
Competitive advantage is what makes a firm stand out even in presence of competition.
This competitive advantage is inherent in the internal structure of the organization. It includes its
shared knowledge within, organizational skills and the culture. These attributes are not easily
ORGANIZATIONAL STRATEGY
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copied. A product or service can be copied since coffee is just coffee- what makes Starbuck
coffee unique is the extra effort the organization makes to be able to serve that premium coffee
consistently. Sustainable competitive advantage is when a company has continuously maintained
a competitive advantage that it becomes a culture. This allows an organization to attract a
sufficiently large number of customers to buy goods and services it offers.
Financial strength refers to the ability of an organization to acquire financial resources
and be able to use those resources to provide a reasonable return to the shareholders. In the case
of Starbucks, it had annual sales of over $ 19 billion in 2015. This is a massive metrics of its
financial performance. In a media crisis in the United Kingdom when Starbucks was accused of
tax evasion, it managed to overcome the storm, agreed to pay 10million British pounds over a
two year period while the subsidiary was still loss-making (Diana et al, 2017). Having a strong
financial strength helps overcome challenges. Strategic objectives refer to the metrics used to
monitor and evaluate performance in respect the strategic plan. It usually has sales objectives,
return on investment (ROI), and expansion and growth objectives. Organizations use objectives
to develop operational tactics and activities that drive day today at the operational level. In the
case of Starbucks how many new stores by the end of 2018? What is the growth in the number of
employees- This is a social measure (helping to create jobs)? How many farmers are benefitting
from our patronage? What are the quality measures in place to guarantee consistency in quality?
Strategic decisions are what make an organization stand even when faced with
uncertainties. The organization founder comes up with the vision. From the vision- the direction,
a mission is developed. The mission is the business. Organizations can control the internal
environment – this is their main competitive advantage, which is immutable, rare and not easily
copied. It forms the culture of the organization. Strategic management practice is an essential
ORGANIZATIONAL STRATEGY
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part of the strategic management process. It involves the identification of benchmarks, realigning
resources both human and financial and providing leadership to supervise the deployment of the
services and products. The company can only meet their goals when they use strategic
management to extend their internal and external communication plans.
Conclusion
Organizations mission and vision are part of their success architecture. An organization
mission is what its business is. While the vision is the long-term direction the organization has.
An organizations business model is built on two pillars customer value proposition and the profit
formula. This implies what value a customer will derive from using your product or service. The
higher the value perceived the higher the price customers are willing to pay. Competitive
advantage is what makes a firm stand out even in presence of competition. This competitive
advantage is inherent in the internal structure of the organization. It includes its shared
knowledge within, organizational skills and the culture. Financial strength refers to the ability of
an organization to acquire financial resources and be able to use those resources to provide a
reasonable return to the shareholders. In the case of Starbucks, it had annual sales of over $ 19
billion in 2015. This is a massive metrics of its financial performance. Strategic decisions are
what make an organization stand even when faced with uncertainties. The organization founder
comes up with the vision. From the vision- the direction, a mission is developed. In conclusion,
company’s vision and mission are very essential in its operations since they give it a brand that
last in the mind of the existing clients and draws potential customers.
ORGANIZATIONAL STRATEGY
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References
Aiello, G. and Dickinson, G. (2014). Beyond Authenticity: A visual- Material analysis of locality
in the Global Redesign of Starbucks Stores. Visual Communication, 13 (3), p. 303-321
Diana, C. S, and Shannon A. Bowen. (2017). Reputation Management and Authenticity: A case
Study of Starbucks UK Tax Crisis and #spreadthecheer campaign, Journal of
Communication Management, 21(3), p. 287-302
Yang, Qian. and Tu, Xing. (2016). Starbucks vs Chinese Tea-Starbucks Brand Management
Strategy Analysis in China. International Business and Management 12 (1), p. 29-32
Gamble, J., Thompson, A. A., & Peteraf, M. A. (2016). Essentials of strategic management: The
quest for competitive advantage. (5th ed.). Dubuque, IA: McGraw-Hill Education.
Running Head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
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STRATEGIC MANAGEMENT
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Strategic Management
Question 1
Consider the organization’s macro-environmental factors using PESTEL analysis and describe
which two are most relevant to the organization at present.
Answer
The PESTEL analysis looks at organizations operating environment and their favorability. It
represents the Political, Economic, and Social-cultural, Technological, ecological and legal
regulatory environment. The above elements of PESTEL are important in analyzing and
describing organization at present. Putting this into consideration may help executives to make
decisions which are significant in the management of the company.
The two most relevant are immediate industry and competitive environment. This implies how
competitive the industry is at the moment, what strategies the competition is using and how is the
market organized. How large is the market in terms of size and who are the leading players? The
second important is the economic environment, this entails the growth rate, interest rates,
inflation metrics, rate of unemployment, balance of payment, market structures, rate of economic
growth, national growth projections, free market or controlled market, the level of disposable and
the level of income among the population
Reference
Gamble, J., Thompson, A. A., & Peteraf, M. A. (2016). Essentials of strategic management: The
quest for competitive advantage (5th Ed.). Dubuque, IA: McGraw-Hill Education.
Day, G. S. and Wensley, Robin. (1988). Assessing Advantage: A framework for diagnosis
Competitive Superiority, Journal of Marketing, Vol. 52 (2)
Question 2
STRATEGIC MANAGEMENT
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Consider the competitiveness of the organization’s industry using the Five-Forces Model of
competition, and describe which of the five forces is creating the strongest competitive pressure
in the organization’s industry
Answer
The Porters Five Forces Model is a tool used to evaluate the attractiveness of an industry. It
evaluates the different levels of competition that may influence decisions and plans of an
organization. They entail the power of buyers- the ability of buyers to bargain and push down
prices can hurt an organization. The power of suppliers- this means that in a market with few
suppliers or the largest suppliers are able to control the market, they can fix prices thereby
reducing an organization ability to be competitive. They can hoard goods to bring about an
artificial shortage with aims of raising their profit margins. Competition from substitute products
can hinder an organizations competitiveness whereby there is little differentiation and products
are almost generic in nature. The threat of new entrants- how easy is it for a new firm to set base
in a particular industry. Having barriers tend to safeguard the industry limiting the number of
potential players. Lastly rivalry among industry players- intense competition may bring about
efficiency and competition through innovation: looking for ways to beat others. It may reduce
attractiveness forcing out other players. Understanding the model and its application is very
significant in the operation of the company since it helps management to understand both the
internal and the external environment.
Reference
Gamble, J., Thompson, A. A., & Peteraf, M. A. (2016). Essentials of strategic management: The
quest for competitive advantage (5th Ed.). Dubuque, IA: McGraw-Hill Education.
STRATEGIC MANAGEMENT
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Day, G. S. and Wensley, Robin. (1988). Assessing Advantage: A framework for diagnosis
Competitive Superiority, Journal of Marketing, Vol. 52 (2)
Question 3
Assess the organization’s primary tangible and intangible resources using the VRIN test for
sustainable competitive advantage.
Answer
VRIN test stands for valuable, rare, immutable and non-substitutable. These are the
characteristics that give an organization a competitive advantage. When it is sustained over time
it becomes the sustainable competitive advantage. The tangible resources include physical
resource (machinery, premises, proximity to a market), financial resources (capital) and
organizational resources (the infrastructure that supports the firm) in terms of communication,
distribution systems, and retailers. The skills an organization uses to combine the tangible
resources in a way that the process is rare, not easily copied is a form of competitive advantage.
In most cases, these resources are easy to get. On the other hand, intangible resources includehuman and intellectual capital, brand image, relationship with clients and partners, company
culture. These resources are specific to a particular organization, it is not easy to copy, and
transfer they are valuable to the organization. Build over a time it forms a culture of the
organization. It is not easy to substitute a team that has developed tacit knowledge known only to
team members. The experience and skills form bedrock of competitive advantage unique the
organization. Understanding the model and its application is very significant in the operation of
the company since it helps management to understand both the internal and the external
environment.
STRATEGIC MANAGEMENT
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References
Gamble, J., Thompson, A. A., & Peteraf, M. A. (2016). Essentials of strategic management: The
quest for competitive advantage (5th Ed.). Dubuque, IA: McGraw-Hill Education.
Day, G. S. and Wensley, Robin. (1988). Assessing Advantage: A framework for diagnosis
Competitive Superiority, Journal of Marketing, Vol. 52 (2)
Question 4
Conduct a SWOT analysis on the organization.
Answer
The SWOT analysis is used to examine the organizations current status. Strengths and
weaknesses are internal to the organization and there is something the organization can do.
Opportunities and threats are external to the organization in most cases an organization responds
to the opportunities and reacts to the threats. Strengths form the backbone for building a strategy
that takes advantage of the core strengths and capabilities. Weakness is gaps that an organization
needs to work on to reduce exposure, minimize risks and enable it to remain competitive in
comparison with its peers. Opportunities are areas of growth in terms of new products
development, expansion into new markets, increasing products range, joint ventures, and areas of
investment. Threats are possible risks, occurrences that may reduce an organizations market size,
competitiveness, introduction of new technology by competing firms can make a firm less
competitive. The understanding of the strength, opportunities, threats and weaknesses of a
company is the first significant thing the any competent management to know. With these, the
executive is able to make proper decision and execute their plan with utmost finality.
STRATEGIC MANAGEMENT
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References
Gamble, J., Thompson, A. A., & Peteraf, M. A. (2016). Essentials of strategic management: The
quest for competitive advantage (5th Ed.). Dubuque, IA: McGraw-Hill Education.
Robert M. Grant (1996). Towards a Knowledge-based Theory of a firm, Journal of Strategic
Management, Vol 17, 109-122.
Day, G. S. and Wensley, Robin. (1988). Assessing Advantage: A framework for diagnosis
Competitive Superiority, Journal of Marketing, Vol. 52 (2)
Running head: COMPETITIVE STRATEGIES
Competitive Strategies
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COMPETITIVE STRATEGIES
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Competitive Strategies
1. Describe the organization’s current competitive strategy using the five generic
strategies framework.
There are 5 generic strategies used by companies at the operational activities level. The
generic competitive strategies are; Low-cost strategy, Broad differentiation, focused low-cost
strategy, focused differentiation and lastly a hybrid strategy combining both cost and
differentiation. The low-cost strategy involves underpricing, providing lower costs than rivals.
This strategy works best in cases of potential high volume sales namely mass market. Walmart a
large retail chain uses its large size to get better prices from suppliers enabling it to offer its
clients lower prices. In terms of organization, the firm outsources non -essential services that
lower its costs further. Use of technology enables networking of branches and having a lean
management further driving costs down.
Broad Differentiation strategy is used for high-value products and services e.g. Rolex
watches or Mercedes Benz cars. This strategy is used where customer needs are so diverse that
standardizing them I almost impossible. Value is created through the efficient use of technology,
robust research and development supporting innovation. This enables charging premium prices
per unit of goods sold or services offered. Value is increased by using high-quality inputs,
management efficiency in offering superior customer service.
Focused (Market Niche) Strategy this strategy is used with fast food chains like Safeway’s
and McDonald’s. This enables a company to choose specific niches to serve that are large enough
and profitable with few rivals. Offering the best low cost against rivals. The challenge is when
competitors copy and implement the same in a much cheaper manner. It’s a narrow buyer
segment.
COMPETITIVE STRATEGIES
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Focused differentiation in this strategy there is limited market segments and ability to offer
differentiation. This is used in the hotel industry or high-end fashion brands like Gucci, the
ability to offer premium goods and services to a limited market segment. It is not attractive to
many players owing to the limited market size. The challenge is constantly changing customer
preferences can get one out of Business.
Hybrid best-cost strategy- this is where cost and branding are used to find a middle-level
playground for the choosy customer who wants value and is not ready to pay premium prices.
This is used by companies like Multi-choice giving paid TV. There is the possibility of offering
different bundles of value.
2. Describe what generic competitive type, from the five generic strategies framework,
is being used by the organization’s primary rival.
There exist three major strategies to use in the marketplace, namely offensive, defensive or
blue ocean strategy. Low-cost strategy- the market leader can be challenged by using offensive
strategy, this happens when a follower or number two in the market has managed to use
organizational skills to lower costs thus being able to challenge market leaders through price
cuts.
In the Broad differentiation strategy, a company can be challenged when rivals happen to
have better technology and superior products to the market leader. Apple managed to beat Nokia
in the mobile telephone market through innovation and superior research and development.
Apple products fetch premium products.
Focused low cost- the market leader can be challenged with better technology and efficiency
through offensive pricing strategy. The Market leader can respond to a defensive strategy where
they offer a selected product range at lower prices and making profits through other products
portfolio. It gives the impression that they are price friendly
COMPETITIVE STRATEGIES
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Focused differentiation- offensive strategy done through enhanced value to the customers.
Giving more for less. In a hotel given two nights and a third free, while making money on
another product offering like restaurants, bar rather than have hotel rooms empty. Rewarding
loyal customers. This endears customers to the firm for repeat business. A hotel can Partner with
an airline to lower customer acquisition cost for hotels challenging established brands.
Hybrid strategy uses both offensives as well as defensive strategies. Large firms have human
and financial resources that enable them to create new markets a disruptive new way of growth
while defending its market positions in markets the firm operates. Toyota created a hybrid car
that uses gasoline and a battery to reduce reliance on fossil fuels; it expanded its market to the
USA. This is a combination of offensive expansion and Blue Ocean with new products.
3. Describe whether the organization is using an offensive or defensive strategy type.
Offensive strategy is used by a firm to expand or grow its market share. This is done by
creating new products, aggressive marketing, and advertising and entering new markets.
Starbucks used offensive strategy to grow in the market share globally. A defensive strategy is
used by a company to protect its market share through cutting costs, matching competitor prices,
engaging in promotions to increase sales volumes. A company can also acquire companies
downstream or upstream to build its muscle in the market.
4. Describe the organization’s merger, acquisitions, or outsourcing options/status.
A merger happens when a company joins forces with another company to form a new firm.
This is usually negotiated where management is merged; resources are merged with some people
declared redundant. Mergers usually create a more competitive firm with a wider product range.
A merger allows companies to have a greater prese …
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