Competitive Strategy: Concepts And Tools Essay

Question:

Discuss about the Competitive Strategy for Concepts and Tools.

Answer:

Introduction

In the first segment, I have extracted substantial knowledge about strategy from the module 3: ‘What is Strategy?’ taken from the textbook, Strategic Management: Concepts and Tools for Creating Real World Strategy by Jeffrey H. Dyer (2015). The e-material is very useful for the fledgling entrepreneurs. It explains that the goal of the young company should be low cost provision and acquisition of a global strategy. It claims that a strategy is a catch phrase. It is a significant idea for an entrepreneur, who aims to demonstrate his business discernment. In the section, the e-material throws some light on the objectives of the business like integrate assemblage of regional acquisition, extraordinary customer service and ‘paradigm shift’. However, these are mainly strategic threads and not the real strategy. The video clearly gives an idea of strategy from his historical conception to its logical culmination. The word ‘strategy’ is derived from the Greek word ‘Strategios’, which means the ‘art of the general’. In the ancient time, the Greek warriors envisioned a brilliant strategy that was prelude to their success. In the recent epoch, the business executives began to develop a set of strategy that leads them to victory. The video delves deep into the theme. It develops a few questions that are useful for the business executives. A good strategy entails four clear questions: where do we compete? What unique value do we bring? What resources capabilities do we utilize? How do we sustain unique value? These four questions can be construed in different ways. For the last question, one has to comprehend one thing. In order to sustain in the long run, the business executives should identify their strong points and delineate their business models. The video gives an interesting insight into the strategic formulation of a Dutch company, IKEA. The company aims to design furniture for mass production and not expensive furniture. It does not specialize in manufacturing. The company deliberates on a unique strategy that is difficult for other companies to counterfeit. The video also mentions about a legendary strategy researcher, Henry Minzberg, who opined that strategy is more about what people actually do, rather what they intended to do. Speaking in a nutshell, the video describes that the business executives have to understand the key questions before implementing a concrete business plan for the company.

In the segment, I have identified organization ‘Electronic Apparel Company’ that sells all kinds of women fashionable apparels and accessories through an online portal. Like IKEA, this company does not specialize in manufacturing. It directly transfers the products to the customers through shipping. While developing the ground plan, the company manifests a clear strategy. As noted, the strategy puts an emphasis on three questions. Therefore, the company identifies the target customers i.e. the college-going women. The company designs fashion products mainly for the college and university going women. Therefore, the target market is young, sassy and fresh. The unique value stands at producing global fashion for the young people at a relatively cheap price. The college going women depend on pocket money or petty income from online jobs. Keeping this view in mind, the ‘Electronic Apparel Company’ sells products through an online portal at a cheap price. The company has an elaborate resource in terms of man-power and machine that sets a paradigm in the market.

In the segment, I have derived substantial knowledge about the development of a business model innovation from the module 4: Business Model Innovation (2013). In this particular section, Prof. Oliver Gassman (2013) explains a few fundamental themes that are indispensable for the maturation and sustenance of business in the recent time. In the video, he points out there are some influential companies like NOKIA and KODAK that started to deteriorate. He explained the reasons of their steady decline in the market. These companies are engaged in serving their present clients and customers. They failed to contour a wide vision for future market encroachment. He opines that today’s success is the foe of tomorrow. Prof. Olive Gassman (2013) claims that innovation can either increase the value of the product or reduce the cost of the product. At the same time, he describes three myths that revolve around the ‘concept of innovation’. These three myths are enumerated as follows: a) innovation emanates from the notion that was hitherto not present b) big success entails big resources c) innovation is always hinged on the development of new technologies. These three myths permeate the entrepreneurial landscape. Prof Oliver Gassman (2013) believes that business model is solely responsible for the success of any ventures. He delves into the concept of ‘business model innovation’ that can be interpreted in many ways. While addressing the topic, he develops four questions such as: who is your target customer? What do you provide? What is your value proposition? How do you generate revenues? The business model changes two of the four major dimensions. He claims that the Dutch furniture company, IKEA has redefined and revolutionized the furniture industry and eBay has changed the world of trade. At the same time, he identified 55 business models. Out of 55 models, 10% are innovative and other 90% are adaptive, refined and combined. Prof. Oliver Gassman identifies and discerns four steps that lead to the development of business model. These four steps are initiation, ideation, integration and implementation. During initiation, the business executives select the potential customers. At the next stage, he confirms the business model with 55 other business models. Subsequently, he develops a new business model. During integration, he checks the consistency of the business model. Implementation is the last stage of the business model. During this stage, the business executives aim to execute the model in the current market. Speaking briefly, this e-material encapsulates the development of business model innovation.

In the segment, I have chosen an ‘electronic apparel company’ (as mentioned above in module 3) that entails a business innovation model. Based on the model, the company develops their outreach. During initiation, the company select potential customers i.e. the college and universities going women. During ideation, the company deliberates on the development of a business model. At the same time, it confirms with other 55 models. During integration, the company checks the consistency i.e. whether the model should sustain for a long time. Lastly, the executives implement the model that gives excellent results.

References

Dyer, Jeffrey H., 2015. Strategic Management: Concepts and Tools for Creating Real World Strategy. John Wiley & Sons.

Gassman, O., 2013. Business Model Innovation: Leveraging existing logics for future opportunities.

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