Competitive Strategy of an Organization Free-Samples for Students

Questions: 1.What is Strategy?2.Whyis Business Model Innovation is Importanat for an Organization?3.Discuss about the Pankaj Ghemawat CAGE Framework. Answers: 1.Strategy is considered as the creation of a position that is unique and valuable and involves a specific set of activities. It requires organizations or individuals to make trade-offs while competing for choosing what is not required to be done. It also involves the creation of fitness among company activities (Grant 2016). Strategy is all about being different and deliberately choosing a diverse of activities for delivering an exclusive mix of value. Organizations use strategy to execute activities in a different way than their competitors. Strategy is the building of an exclusive and valuable position that involves a different range of activities. Strategic position of any organization is neither mutually exclusive nor do they overlap. For an organization to achieve sustainable competitive advantage they need to do more than just choose a unique position for themselves. For sustainable competitive advantage a business must carry out tradeoffs with other strategic positions (Freed man 2015). A business that is in dire need of a good strategy is Compaq. Once the worlds largest supplier of PCs in the 1990s, the company experienced a downfall in 2002 with short term debts and stock trading. The company got acquired by Hewlett Packard and was later discontinued as a brand name. The company acquired success in a very short time due to its differentiating strategy and competitive pricing. They happened to provide huge credibility and unmatched technological advancement. The company faced its downfall by the correlation between accelerated growth and shorter life spans, as companies having a moderate growth rate face the lowest amount of risk. The industry desired for improved technology. As traditional business hardware was becoming an obsolete segment, Compaq attempted differentiating by moving into software and other services. By attempting to dominate every segment of the computer industry Compaq distracted its executives from their main business of selling PCs. What Compaq should have done is to provide the responsibility to its leaders of aligning their strategies with the changing business environment. It executives should have tried to maintain a balance between maintenance of the existing business and the retuning of the same (ZDNet Editors 2017). 2.Business Model Innovation For every company in every industry, innovation is an extremely important process. In most of the cases, innovation only gets associated with new innovative products or technical advancements. However, innovations of business models are considerably more profitable. Business model innovations have been keystones in reshaping industries and redistribution of billion dollars of value (Massa and Tucci 2013). Analysis of some major innovations shows that very few of them are business-model related. Business model innovations are about primarily rethinking the business around a specific customer need and then realigning the processes, resources and profit formula with the help of the new value proposition. It is a difficult procedure for the decision makers, who have to leave their comfort zones. However, the outcomes come as a dramatic. Modifications in globalization, customer preferences and technological innovations are building windows of opportunities for the fresh business models. F or implementation of an innovative business model a description and discussion facilitating concept is necessary. It is provided with the responsibility of grasping and mediating the primary standard of a companys value creation (Amit and Zott 2012). A company that needs a business model innovation is Volkswagen, the second biggest carmaker in the world. They themselves admitted that they have been dishonest with their regulators and customers. They had software installed in their cars that provides false emission data of their diesel cars. Therefore, it is a perfect example of a situation where the values promised to the customers and the actual behaviour and conduct outright contradicts. Due to this Volkswagen had to face a perfect storm. They faced fines, criminal charges and legal actions from their customers. A third of the companys market share got wiped out. The worst thing that happened is that the deed carried out by Volkswagen totally contradicts their promise in their value proposition. Volkswagen should have carried out their promise of high moral conduct and responsibility towards its customers. Being a well established organization they should have been able to differentiate between right and wrong. The overall auto mobile industry has a bad track record of executing their promises in terms of emission and fuel consumption (Dans 2015). 3.Pankaj Ghemawat CAGE Framework Pankaj Ghemawats CAGE analysis can act as an excellent tool for companies and businesses equally who are looking for developing international expansion strategies. The CAGE framework recognizes the middle ground amongst two extremes of mass customization and one size fits all, which typifies majority of the product development efforts and global market strategies. The framework is extremely useful in easily assessing the potential risks, barriers and size in different international markets. It also assists in eliminating the guesswork involved in choosing the countries to penetrate and in which order it must be done. The CAGE framework helps identify the current products that are very easily transportable at the lowest possible cost and also helps develop new products which are exclusive to global ventures. The framework has four dimensions: Cultural, Administrative, Geographic and Economic. This framework can be utilized to compare the changes of succeeding in different countries in any given market. Organizations can make use of CAGE framework for choosing where to invest (Ghemawat 2013). An organization that required massive help in understanding the Cultural, Administrative, Geographic and Economic differences or distances while designing international strategies is Starbucks. Starbucks Israel failed dismally after two years of its establishment. The taste of Starbucks coffee did not go down well with the Israel customers, who preferred stronger coffees in tiny cups. Even after the management was informed they shrugged it off and did not attempt to localize the flavor. They also spread over five different locations with branches instead of setting up several branches in one location. As the caf opened and the actual sales turned out to be less than projected, the employees panicked and several were fired, which also affected motivation. Starbucks should have conducted a proper market research and modified their products according to the local preferences. Understanding of Israels culture, administration, geography and economy would have helped them create a business model that could have stopped their failure (Steinberg 2014). References Amit, R. and Zott, C., 2012. Creating value through business model innovation.MIT Sloan Management Review,53(3), p.41. Dans, E. 2015. Volkswagen And The Failure Of Corporate Social Responsibility. [online] Forbes.com. Available at: https://www.forbes.com/sites/enriquedans/2015/09/27/volkswagen-and-the-failure-of-corporate-social-responsibility/#204a343c4405 [Accessed 19 Apr. 2017]. Freedman, L., 2015.Strategy: a history. Oxford University Press. Ghemawat, P., 2013.Redefining global strategy: Crossing borders in a world where differences still matter. Harvard Business Press. Grant, R.M., 2016.Contemporary strategy analysis: Text and cases edition. John Wiley Sons. Massa, L. and Tucci, C.L., 2013. Business model innovation.The Oxford Handbook of Innovafion Management, pp.420-441. Steinberg, J. 2014. The grande coffee plan that failed. [online] The Times of Israel. Available at: https://www.timesofisrael.com/the-grande-coffee-plan-that-failed/ [Accessed 19 Apr. 2017]. ZDNet Editors, 2017. Worst tech mergers and acquisitions: HP and Compaq | ZDNet. [online] ZDNet. Available at: https://www.zdnet.com/article/worst-tech-mergers-and-acquisitions-hp-and-compaq/ [Accessed 19 Apr. 2017].