Expert answer:Strategy Planning
Solved by verified expert:Looking at your organization at a KSA organization competing in your industry, examine elements of standardization and adaptation. You can focus on aspects of organizational design and firm processes or on product and service offerings.Indicate how the organization achieves standardization and the associated cost advantages and how it does (or should) pay heed to localized conditions such as legal, political, geographical, behavioral, and sociocultural particularities. Give an in-depth analysis to the firm you have chosen to discuss.Embed course material concepts, principles, and theories, which require supporting citations along with at least one scholarly, peer-reviewed reference in supporting your answer unless the assignment calls for more.Use APA style guidelines.1 pagei attached some examples
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Managers of businesses usually think of how to survive in the competitive market. There
are many strategies that can be used such as standardization and adaptation; however, other
factors sometimes force the managers to choose a specific strategy to succeed. Standardization is
based on the belief that the globalization’s forces unite different countries markets because the
consumer’s needs, desires, and tastes become similar. On the other hand, adaptation strategy
focuses on the need to adjust to every export market in order to meet different needs and tastes of
consumers (Sudarevic, Radojevic, & Lekovic, 2015). Therefore, this article will shed a light on
the adaptation concept applied in Hikma company and how the company pays attention to the
localized conditions as well as standardization concept indicating how Hikma achieves
standardization and the associated cost advantages.
Hikma followed the adaptation concept to be able to access to the MENA market. The
company maintained a local manufacturing presence in the MENA region because some markets
restrict the range of products that can be imported from outside the region (WIPO, 2017). Thus,
the company adapted to the government regulations to be able to increase its sales. Nilsson,
Fagerlund, and Körner (2013) stated that government regulations are the major factor influencing
product adaptation. Product adaptation is needed to fulfill some necessary host country
requirements such as technical and legal issues, and packaging (Rao-Nicholson & Khan, 2017).
Many pharmaceutical companies make secondary packaging in local manufacturing sites to add
the hospital logo.
Moreover, Hikma standardized its products to be able to reach many regions with less
cost. The injectable manufacturing facilities in Portugal, Germany, and Italy supply injectable
products to Hikma’s global markets (Hikma, 2017). That is, Hikma facilities increase their
production with less cost and then spread their products to other regions. Thus, the company
gains the economies of scale and acquires the cost advantage. One of the ways that increase the
company profit is supplying identical products at a lower cost (Grant & Jordan, 2015). Since
Hikma already has its injectable facilities, there is no need to establish more facilities over the
world. Increasing these facilities’ production decreases the cost of production because they
already have the materials, machines, and workers for production.
Finally, this article discussed the concepts of adaptation and standardization applied in
Hikma company. It also clarified how the company paid attention to the localized conditions and
achieved standardization and the associated cost advantages. The concept of standardization is
based on the belief that the globalization’s forces unite different countries markets because the
consumer’s needs, desires, and tastes become similar. Thus, Hikma standardized its products to
be able to reach many regions with less cost. The injectable manufacturing facilities in Portugal,
Germany, and Italy supply injectable products to the Hikma’s global markets. On the other hand,
the concept of adaptation concentrates on the need to adjust to every export market in order to
meet different needs and tastes of consumers. Thus, the company applied the adaptation concept
to be able to access to the MENA market. This strategy helps Hikma to overcome the
government regulations.
References
Grant, R. M., & Jordan, J. (2015). Foundations of strategy (2nd ed.). Hoboken, NJ: John Wiley
& Sons.
Hikma. (2017). Hikma at a glance. Retrieved from http://www.hikma.com/en/about-us/At-aglance.html
Nilsson, F., Fagerlund, M., & Körner, J. (2013). Globally standardised versus locally adapted
packaging. International Journal of Retail & Distribution Management, 41(5), 396-414.
Rao-Nicholson, R., & Khan, Z. (2017). Standardization versus adaptation of global marketing
strategies in emerging market cross-border acquisitions. International Marketing Review,
34(1), 138-158.
Sudarevic, T., Radojevic, P., & Lekovic, J. (2015). The standardization/adaptation dilemma in
agri-food exporters marketing strategies. British Food Journal, 117(11), 2739-2756.
doi:10.1108/BFJ-02-2015-0075
WIPO. (2017). Evolving toward IP-fueled innovation. Retrieved from
https://www.oecd.org/aidfortrade/47764768.pdf
Companies marketing their products and/or services overseas are faced with the decision of
whether to standardize or adapt their product offerings. This decision concerns firms commencing to
market their products in foreign countries as well as those already operating internationally and is
considering expanding into further markets (Grant & Jordan, 2015). The standardization of products
across cultures is increasingly becoming an important issue that the managers of global firms are
today facing. On the other hand, product adaptation strategies are also being considered perhaps
the most influential aspect for Multinational Corporations (MNCs). In today’s globalized world, the
choices of standardization versus adaptation of international products are no longer being seen as
an inflexible choice. Instead, combinations of the two options are being regarded, given the
dependent factors at a given time on a given market (Membe, 2012).
Al Rajhi Bank ventured into the Malaysian market in 2006 after being the first foreign bank to be
awarded a full-banking license by the Bank Negara Malaysia. Malaysia marked the bank’s first foray
into the South East Asian banking scene, whereby the core banking products were introduced to the
Asian market providing a whole new Islamic banking experience. Al Rajhi Bank currently has 19
branches in Malaysia with plans to increase this number in the future (Statements, C. F. AlRajhi
Banking and Investment Corporation).
Currently, AlRajhi Bank has already invested in Malaysia to increase their market share globally.
Choosing Malaysia, in particular, is because they have good prospects for Islamic banks to grow
significantly. The idea of Islamic banking is to offer the majority Muslim population of Malaysia
choices in financial products that comply with religious mores and at the same time carve out a
niche as a global leader in Islamic banking (Prystay, 2002).
Of course, not all rules that are applicable in the hometown of AlRajhi bank (Saudi Arabia) will
be suitable to ably on Malaysia. For example, male and female are not allowed to work together in
all banks in Saudi Arabia, and as an Islamic bank, it will be highly prohibited in AlRajhi bank. But in
Malaysia, you can see male and female working next to each other in the same branch because of
their culture and what they are familiar to (Thiruselvan, 2008).
In term of adaptation, Al-Rajhi Bank started using “Robotic” technology to automate its banking
operations activities, as the first bank in the Kingdom to use this technique. This step comes after
the large increase in the number of the bank’s banking transactions, which motivated the bank to
search for a new technique for better efficiency. Robotic Process Automation (RPA) is a technique
that automates operations, which the bank deals with on daily basis and it’s repetitive.
Waleed AL-Mogbel, the COO of Al-Rajhi Bank said “Using this technology will help the bank to
execute thousands of banking operations, which is daily executed manually in a faster way with
more efficiency and without any human intervention. He said this step will be followed by more
steps to double the number of this Robotic software by the end of this year, which means more
efficiency in executed banking transactions and improve customer’s experience.
Al-Rajhi Bank has started in September 2016 by launching one banking transaction, and now
Robotic Process Automation is used in more than 60 banking operations to accomplish multiple tasks
including retail credit operations, customers care and banking operations.The Robotic Software
process more than 15,000 banking transactions on a daily basis, which led to reduce the time in
customer service processes (AlRajhi Bank, 2017).
AlRajhi bank standardized their products and offers in all branches even in Malaysia, Jordan,
and Kuwait. They offer all types of personal finance that are bounded by Islamic and Sharia
principals, Islamic consumer credit also covers car purchases and home equipment and
improvements such as new bathrooms, kitchens or furnishings. Car finance involves Murabaha, the
bank purchasing a car on behalf of the client and reselling to the client for deferred payments. Al
Rajhi Bank offers up to sixty months to pay through installments with no down payment required in
all branches. Housing finance is also a major Islamic financing activity in AlRajhi bank worldwide
(Thiruselvan, 2008).
References:
Al Rajhi Bank . (2017, May 28). Retrieved October 21, 2017, from
http://www.alrajhibank.com.sa/en/media-centre/news/pages/robotic-technology.aspx
Grant, R. M., & Jordan, J. (2015). Foundations of strategy (2nd ed.). Hoboken, NJ: John Wiley &
Sons.
Membe, N. B., & Doriza Loukakou, M. (2012). Product standardization and adaptation in
International Marketing: A case of McDonald’s.
Thiruselvan, K. (2008). A qualitative study on Islamic banking in Malaysia: issues, prospects, and
challenges (Doctoral dissertation, University of Malaya)
Statements, C. F. AlRajhi Banking and Investment Corporation. Chicago
Having and maintaining a competitive advantage is vital to survival in the business world.
Indeed, competitive advantage refers to the unique ability of the business to utilize its resources
effectively, managing to improve customer value and position itself ahead of the competition
(Grant & Jordan, 2015). Therefore, the business leaders seek to gain a competitive advantage by
utilizing different strategies in order to succeed.
There are different strategies that can be used in order to achieve the competitive
advantage such as standardization and adaptation strategies. Standardization refers to the process
by which a business makes it methods, especially its production processes, uniform throughout
its organization. More so, standardization helps cut costs by eliminating duplicated effort
(Romero, Dijkman, Grefen & van Weele, 2015). On the other hand, adaptation strategy implies
changing various aspects of products and services to a considerable extent in order to meet the
needs of consumers (Saebi, Lien & Foss, 2017). Indeed, the adaptation is a response to external
changes, such as changes in the customers’ needs.
The Ministry of National Guard Health Affairs Hospitals is a state of the art healthcare
organization located in different parts of the kingdom of Saudi Arabia (NGHA, 2017a). Indeed,
NGHA seeks to have a high level of quality of medical care on an international scope not only in
Saudi Arabia. Therefore, NGHA hospitals apply many strategies such as standardization and
adaptation strategies on aspects of organizational design and firm process in order to get
competitive advantages. In terms of standardization, NGHA has standardization in organizational
design and hospital process according to the policy and procedures of the hospital, which is
associated with government regulations as well. Therefore, when the patients go to any branch of
NGHA hospitals they will have same services due to the high standardization in the hospital’s
processes.
Additionally, NGHA hospitals across the kingdom are all accredited by Joint
Commission for International. At present, there are only 69 hospitals around the world who are
accredited by JCI (jointcommissioninternational, 2016a: Ngha, 2016a). The “JCI” focused on the
quality and safety practices on medical care. It provides innovative solutions to assess the quality
improvement and healthcare outcomes. As a result, this accreditation gives NGHA hospitals a
competitive advantage.
In terms of adaptation, NGHA hospitals adopted a new health information system (Best
Care), which aims to provide the best care possible for the patients. The change leader made an
effort to initiate change by implementing the system within the hospital that aims to maintain the
hospital in the best position as well as to keep pace with the rapid development (Bawany, 2016).
All NGHA hospitals implemented this system which also reflects on the standardization process
that hospitals apply. Moreover, the adaptation of new technologies helps to meet the customers’
demand and needs in changing world. More so, the implementation of (Best Care) gives NGHA
hospital advantages among the other hospitals in the kingdom. For example, when a person is
sick and he would like to go to any of NGHA hospitals NGHA doctors can access the patient
medical history easily which leads to best treatment in just a matter of minutes.
Overall, competitive advantage is a fundamental key to success and high profitability for
the business. Therefore, organizations need to seek to get a competitive advantage by applying
the strategies that fit the organization goals in order succeed in the right manner. Moreover, there
are many benefits of standardization in the workplace such as better customer services as a result
of best practices, reduce cost, better efficiency, and quality as well. On the other hand, adaptation
is essential in order to survive and move ahead in the business world. Indeed, standardization and
adaptation strategies were applied in NGHA hospital in the best way possible which led give a
competitive advantage to the NGHA hospitals.
References
Bawany, S. (2016). Leading change in today’s VUCA world. Leadership Excellence Essentials,
33(2), 31.
Grant, R. M., & Jordan, J. (2015). Foundations of strategy (2nd ed.). Hoboken, NJ: John
Wiley & Sons.
Jointcommissioninternational. (2016a). About JCI. Retrieved from
http://www.jointcommissioninternational.org/improve/advisory-services/
NGHA. (2017a). About NGHA. Retrieved from
http://ngha.med.sa/ENGLISH/ABOUTNGHA/Pages/default.aspx
Romero, H. L., Dijkman, R. M., Grefen, P. W., & van Weele, A. J. (2015). Factors that
determine the extent of business process standardization and the subsequent
effect on business performance. Business & Information Systems Engineering,
57(4), 261-270.
Saebi, T., Lien, L., & Foss, N. J. (2017). What drives business model adaptation? The
impact of opportunities, threats and strategic orientation. Long range planning,
50(5), 567-581.
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