Gaining And Sustaining Competitive Essay

Question:

Write an Essay on either Strategic Management or Sustainability.

Answer:

Introduction

The current competitiveness in the business world is persuading the business marketers to participate in a challenging scenario. The unique values of the products and services are the major focus of the business marketers to ensuring the sustainable position (Hill, Jones & Schilling, 2014). Each of the companies tries to develop the strategic ideas for managing the entire organisational functionalities. However, in current business world, it has been observed that the customers’ demands are changing drastically (Peppard & Ward, 2016). The advancements of the technicalities and business functions are the major reason behind such changing demands. In order to remain competitive, the business marketers are concentrating on developing more effective strategic approaches. With the evaluation of such strategic movements, it becomes easy to reach the target market and fulfill the expectation level of the customers.

The study would follow the strategic management issues faced by Holden Car, the renowned automobile company located in Australia. The company has been facing the negative consequences due to strategic failure. The study would develop the insightful ideas about the theoretical background of the strategic management. The observation of the strategic management theoretical concept, the study would present some of the preferable recommendation for the future sustainability of the company.

Discussion

The top executives of the organisation ponder the strategic missions and objectives. Holden Car is the renowned brand of General Motors that has been operating business much successfully. However, in current state, the company has been facing some of the significant issues due to the mismanagement of the strategic functionalities. The company used the TV commercials for communicating the post-announcement. This move was quite insignificant in this volatile business market (Themotorreport.com.au., 2017). However, the announcement through the advertisement was not revealing the higher quality of the car, rather focused on the ranges of customers, sportspeople, individuals, and employees. In this competitive scenario, the companies are trying to gather the attention of the customers with high quality products and services. In fact, it is even necessary to keep focus on the customers’ demands to improve brand position (Epubs.scu.edu.au, 2017). Therefore, such issues with the promotional advertising process were the determinant in establishing the strategic position in this competitive market. It was necessary to derive the adequate knowledge about the strategic positioning process. The further study would focus on the theoretical concept of thee strategic management. The obtained ideas would present the suitable recommendation for the future progress.


The continuous and increasing pressure of the competitive business markets is persuading the companies to improve the management system and organisational functionalities. However, such pressures from the external market competitiveness are making these functionalities more complicated (Barney, 2014). However, the development of the theoretical concept is quite necessary for organizing the business functionalities and strengthening the competitive position. One of the most effective strategic theories is Resource Based View. This strategic approach focuses on the competitive position of the firm. It is notable that the resources are the major asset of structuring the strategic functionalities. The resource based view is focusing on achieving the competitive advantage by supporting the core competency skills of the company (Wheelen & Hunger, 2017). The RBV model specifies the proponents that are much feasible in availing the opportunities from the external market. However, the model concentrates on developing the innovative ways of using the existing resources rather than focusing on the new skills for different opportunities. According to Rothaermel (2015), the resource management of the company plays the most significant role in increasing the competency level. There are two different types of the resources found, such as tangible and intangible. The physical resources, such as, lands, buildings, equipment, machinery, and capitals are the tangible resources. It is to be indicated that the resources can be brought to the market for conferring advantage for a firm. Similarly, Holden car has the automobile technologies and the manufacturing location where the business can become more productive (Peteraf, Gamble & Thompson Jr (2014). Quality is one of the most demanding factors that influence the purchasing decisions of the customers. Holden car requires adopting more advanced technologies that can eventually improve the production house activities. Moreover, implementation of these technological tools can be more helpful in improving the distribution channels as well as the logistic process (Lin & Wu, 2014). Moreover, the company requires focusing on the advertising technologies for promoting the business with more efficiency. However, the rivals keep focus on the identical assets and often try to imitate the same. ‘

On the other hand, the intangible resources do not have the physical presence but are owned by the company. For example, the reputation of the brand, intellectual property, and trademarks are all considered as the intangible factors or assets of the company. It has been observed that the automobile industry usually offer the similar kind of products (Kull, Mena & Korschun, 2016). These companies generally focus on manufacturing cars and automobile services. It would be helpful for the company to earn profit if the company can introduce more product variations. It is to be mentioned that along with the tangible resources, the intangible resources also determine the long term sustainability of the firm. Holden Car is the brand of General Motors that has captured the remarkable position in the global automotive industry. The brand reputation influences the perceptions of the customers. Hence, it is necessary to keep the focus on the intangible assets for remaining more competitive in the market. Kozlenkova Samaha and Palmatier (2014) implied that the intangible resources are the long term assets, which are the major source of the competitive advantage. There are two critical assumptions can be made about the resource based approaches. It is stated that the resources are needed to be immobile and heterogeneous. According to Bahli and Rivard (2017), the heterogeneous assumption depends on the capabilities, and unique resources of a company. For instance, if one organisation has the same amount of resources like the competitor; it would be difficult to implement the different strategic approaches. Similarly, the management of Holden Car requires keeping focus on the unique values of the resources that are different to the rivals.


The immobile is the second assumption associated with the RBV tool. It determines that resources do not have the mobility power and therefore these resources cannot be moved from one company to another (Hussain et al., 2013). Especially, it is impossible to transmit the resources from one company to another for a short run. It is important to mention that due to such immobility, the companies often cannot replicate the resources of the rivals (Pepper & Gore, 2015). Therefore, there is the lesser chance of implementing the similar strategies. In setting the example, the brand equity, knowledge, process or the intellectual properties can be mentioned. These intangible resources cannot be removed from the company. RBV model involves the VRIO framework that leads the company towards enabling the competency for achieving the competitive advantage (Lin & Wu, 2014). Along with the intangible and tangible resources, it is necessary for the company to keep the focus on the more improved strategic functions that can create sustainability for long run. VRIO framework suggests that the resources are needed to be measured by focusing on four major questions. For instance, questions about value, questions about rarity, questions of replication (imitability), and questions of organisations are the major concerns.

It is necessary to judge the resource value to understand the capability of earning more profits. Resources can be considered valuable if these become much helpful in adding more value to the services and products offered to the potential customers. The brand reputation influences the perceptions of the customers. Hence, it is necessary to keep the focus on the intangible assets for remaining more competitive in the market. Westphal and Zajac, (2013) implied that the intangible resources are the long term assets, which are the major source of the competitive advantage. There are two critical assumptions can be made about the resource based approaches. By increasing differentiation and decreasing the costs of the production, the company can ensure the value added purposes (Hussain et al., 2013). The resources are needed to be rare for enabling the competitive capabilities. If many of the organisations have the similar resources, it would result in the competitive parity (Lin & Wu, 2014). It is to be noted that the rare value of the resources helps in achieving the temporary competitive advantage at the least. In some of the cases, the resources become much costly to imitate. Hence, this process is quite beneficial in acquiring the secure competitive position in the business market. It is notable that the resources are not the only factor to be considered. It is essential for the organisations to capture value by developing the unique capabilities. The firm, which is capable of exploiting the rare, valuable and imitable resources, can sustain in the competitive scenario.

Another most significant theoretical approach of strategic management is the Agency Theory. According to Bridoux & Stoelhorst (2014), agency theory is the recognizable branch of the financial economics that identifies the conflicts of interests between the organisations with different interests. These conflicts are mainly found between either shareholders or managers of the companies or between the bond holders and shareholders of the company. The theory illustrates the clear linking between the shareholders, principals, and agents or the managers. There are two specific problems associated with the theory. First, the company requires identifying the method of linking goals and management to prevent conflicting scenario (Kotler, Berger & Bickhoff, 2016). The other factor is thee reconciliation between the principals and agents. Both the agent and the principal have the different risk tolerance capability that is needed to be taken into account. Tassabehji and Isherwood (2014) pointed out that every individual act differently in accordance to their self-interests and benefits. The self-motivation provides platform for identifying the conflict of interests.

Another most significant issue addressed by the Agency Theory is the utilization of the principal’s resources by the agent. Even though the agent is the decision maker of the company, the resources use would be a considerable burden for the principal (Vignali, 2015). The agency theory suggests the involvement of two parties in specific case. However, the third party is often involved to represent the transaction process between the principals and the agent. The third party often appears in time of hiring the agent on behalf of the principal for performing any function. However, maintaining the sequential procedure to prevent the conflicts between the associated parties is quite necessary (Hussain et al., 2013). The strategic management procedure often deals with such conflicting scenario in which the proper management of the sequential activities is necessary.


Another most effective strategic management tool is Ansoff Matrix that is also considered as the ‘strategy of diversification’. The ansoff matrix is structured for ensuring the business growth in a competitive scenario. This strategic tool suggests that the business requires focusing on concentrating on the market development process whether it is an existing or new market. The ansoff matrix has the four different components that provide the insightful ideas about the business focus (Gr?nig & Morschett, 2017). The first component is market penetration, which is synonym for growth strategy. In this strategic development, the business often focuses on selling the existing products in the existing market. There are four major objectives associated with the market penetration strategy. It focuses on maintaining or increasing the market share of the products that exist in current scenario (Lin & Wu, 2014). This parameter can be achieved through combining the advertising, competitive pricing strategy and sales promotions. In fact, in some of the cases, the business can invest more resources that are dedicated to the personal selling (Vignali, 2015). The next objective of this market penetration strategy is to secure the dominance of the market growth capabilities. It is even restructuring the marketing by defeating the competitors. However, in order to drive the competitors out of the business scenario, it might require the aggressive promotional campaign that is supported by the unique pricing strategy. This unique pricing strategy can draw the customers’ attention that eventually become unattractive for the competitors. The final objective of this strategy is to increase the usage of the products or services by the existing customers (Bamford et al., 2015). The company can introduce the loyalty scheme for increasing this use of the products or services offered by the company. Therefore, it can be implied that the market penetration strategy is generally focusing on the customers’ needs and structuring the business functions accordingly.

The next component of ansoff matrix is market development. The market development suggests the growth strategy of the business by selling the existing products into new markets. The market development process depends on the fruitful approaches. For example, the business can pay the attention towards the geographical markets by expanding the business in a new country (Simmonds, 2015). The customers would be new but the products or services would be same. On the other hand, the business can develop the unique product packaging strategy or dimensions to gather the attention of the potential customers. Developing the new distribution channel would also be much helpful for selling the products and services to the customers. In addition to this, structuring the different and pricing policies can be attractive enough to gather the supports of the customers (Belleflamme & Paolini, 2015). However, it is necessary to mention that the market development is quite difficult and risky process, but ensure growth of the business in a competitive market.

The next component is product development, which introduces the new products into the existing markets. It is essential for the company to develop the competency and capabilities to develop the modified products. These products need to be attractive enough to draw the attention of the customers. The most appealing features and the benefits received from the consumptions of such products would be more fruitful for the company to generate revenues (Gr?nig & Morschett, 2017). The product development strategy is much preferable in a market where the product differentiation is essentially required. The business requires investing more time in research, development, and the innovation purposes. The clear ideas about the customers’ needs and the changing scenario are necessary for developing the products in the existing market. It is important to be the first one in the company to promote the products since there is the high chance of replicating by the competitors.

The final component of the ansoff matrix is the product diversification. The product diversification determines the emergence of the new products in a new market. This diversification process is quite risky since the business usually does not get the adequate idea about the market or the customers. The business companies often require deriving the clear and insightful ideas about the market demands to bring or introduce new product (Hussain et al., 2013). However, maintaining balance between the rewards and risks would be much beneficial for the company at the end. Moreover, the product diversification ensures the development of the new products. In such case, the company can easily add more unique value while offering any product or service to the potential customers. Hence, the diversification strategy is quite fruitful for ensuring growth in a competitive ground.

Recommendation

The above scenario describes that the maintenance of the relevant strategic management procedure is effective enough in ensuring growth of the business. Considering such aspects some of the preferable recommendations can be provided to the company Holden Car. Being a part of the giant automobile industry, it is essential for the company to use the brand reputation in a promising way. The focus on the market demands is the basic approach for managing the strategic functions of the business. It is profitable for the company if it can pay focus on improving the quality of thee automobile services. Quality is one of the most demanding factors that influence the purchasing decisions of the customers. Holden car requires adopting more advanced technologies that can eventually improve the production house activities. Moreover, implementation of these technological tools can be more helpful in improving the distribution channels as well as the logistic process. It is also to be suggested that the company requires using the tangible and the intangible resources in a strategic way. Most importantly, while developing the promotional activities through broadcasting media, it is essential for the company to develop the resources in a significant manner.

The continuous and increasing pressure of the competitive business markets is persuading the companies to improve the management system and organisational functionalities. However, such pressures from the external market competitiveness are making these functionalities more complicated. The company requires identifying the method of linking goals and management to prevent conflicting scenario. Another recommendation can be suitable for the company that is the development of the product diversification strategy. It has been observed that the automobile industry usually offer the similar kind of products. These companies generally focus on manufacturing cars and automobile services. It would be helpful for the company to earn profit if the company can introduce more product variations. The diversification strategy can result a good profitable amount along with the assurance of the sustainable business position.

Conclusion

To conclude the scenario, it can be implied that the product quality and the market demands are the basic focus of the business to secure the competitive ground. It is notable that the majority of the competitors are adding the unique values while offering the products or the services to the potential customers. On the other hand, Holden Car has been facing trouble due to the announcements made on the TV media. It was observed that the company failed to maintain a proper strategic approach and the customers complained about the poor quality of the products. In keeping focus on the development process, it is required for the company to follow the suggestions of improving activities and quality parameter of the offered products and services. Accordingly, this initiative would secure the competitive ground of the company.

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