COMPETITIVE ADVANTAGE AND COMPETITIVE PRIORITIES Many factors shape and form the operations strategy of a corporation, for example, the ever increasing need for globalizing products and operations and thus reducing the unit cost, creating a technology leadership position, introducing new inventions, taking advantage of mass customization, using supplier partnering, and looking for strategic sourcing solutions. All of these factors require an external or market-based orientation; these are the changes that take place in the external environment of the company. Traditionally, strategic decisions were thought of as "big decisions" made by general managers. However, big strategic decisions may not be the only source of competitive …show more content…
Therefore, firms must provide the qualifiers in order to get into or stay in a market. To provide qualifiers, they need only to be as good as their competitors. Failure to do so may result in lost sales. However, to provide order winners, firms must be better than their competitors. It is important to note that order qualifiers are not less important than order winners; they are just different. Firms must also exercise some caution when making decisions based on order winners and qualifiers. Take, for example, a firm producing a high quality product (where high quality is the order-winning criteria). If the cost of producing at such a high level of quality forces the cost of the product to exceed a certain price level (which is an order-qualifying criteria), the end result may be lost sales, thereby making "quality" an order-losing attribute. Order winners and qualifiers are both market-specific and time-specific. They work in different combinations in different ways on different markets and with different customers. While, some general trends exist across markets, these may not be stable over time. For example, in the late 1990s delivery speed and product customization were frequent order winners, while product quality and price, which previously were frequent order winners, tended to be order qualifiers. Hence, firms need to develop different strategies to support different marketing
The external environment of an organization represents factors outside the company that affect the company's ability to function. The business cannot control these aspects but can answer to these changes if it needed. Of course the main problem for business managers is to manage to respond early to these changes in the external environment, but this depends on how soon any change is identified. Most of external environmental factors for example, economic conditions, are reported daily in the media; managers have a wealth of information with the help of which they can develop strategic plans. Nevertheless, some external factors are difficult to identify, especially when they are changing very slowly or hidden from
The external environment of an organization represents factors outside the company that affect the company's ability to function. The business cannot control these aspects but can answer to these changes if it needed. Of course the main problem for business managers is to manage to respond early to these changes in the external environment, but this depends on how soon any change is identified. Most of external environmental factors for example, economic conditions, are reported daily in the media; managers have a wealth of information with the help of which they can develop strategic plans. Nevertheless, some external factors are difficult to identify, especially when they are changing very slowly or hidden from
Strategic management is an essential part for every company which wants to develop in this severe competitive world. Right strategy can help the firm become leader in that industry market and make huge profit while the wrong one would force the firm to be bankruptcy. To see how strategic decision can affect the operation of a company, this study will analyze the case of Fonterra – one of the leading dairy products providers all over the world.
There has been a large amount of research into what strategy is, since Michael Porter’s perennial work in the 1980s. Studies done on the execution of strategy have been far less numerous. However, there is one major understanding about the execution of strategy. The execution of strategy is a vital part of success in business. A summary of many myths surrounding various strategic executions will be outlined, along with their subsequent analyses.
Identify elements of the external environment and internal resources of the firm to analyze before formulating a strategy.
Pearce, J. A. II, & Robinson, R. B. (2009). Strategic management: Formulation, implementation, and control (11th ed.). [University of Phoenix Custom Edition e-text]. New York: McGraw-Hill. Retrieved August 20, 2011, fr
The first individual to conceptualize the idea of strategic decision making by upper management and senior officials was Igor Ansoff in the 1960’s. Although Ansoff did not invent the idea of strategy, he did bring the idea of using strategic decision making for large corporations to succeed. In his book, Corporate Strategy, Ansoff identified 4 major decision types every organization must make. Decisions on strategy, policy, standard operating procedures, and programs were the 4 decisions Ansoff believed every organization needed to make (Strategic management, 2005).
A business has many influences that provide a duel effect on its operations. Not only can they cause the business to undergo change and continually adjust to the external factors in the business environment, but they also provide threats and opportunities in the operations process.
Strategic Management is the theory and practice of making decisions that shape the future of the firm. This course looks at the content and process of strategic decision making from the perspective of managers who are responsible for an entire business unit. These may be individuals who are acting in the capacity of a Chief Executive of a company, divisional General Managers, or departmental heads. It is also the perspective most
The order winners and order qualifiers for the business in the early stages of was the same – price/cost. This competitive characteristic is what caused the customers to choose the companies good and services over those of our competitors along with making Galanz a viable competitor
Chandler (1977) believes strategy is about using the necessary recourses so the organizations are able to carry out their long-term goals and aims. Which relates to Johnson (1987, pp. 4-5) who states, “Strategic decisions occur at many levels of managerial activity and will be concerned with the long-term direction”.
The strategy is also an important external factor as the strategy of the business officiate both the internal and external components of time. For instance, having the employee to submit the mail at the exit of the business, saves money, as there is no need to hire a mail clerk. Also, outsource the mailbox to a business client, who handles package delivery, thus gaining an affiliate business and client. As simple as it is, it is more so innovative. These external factors build a company process of improvement in value, time, and incorporates a strategy.
Grant (2010) states, “For a strategy to be successful, it must be consistent with the firm’s external environment, and with its internal environment – its goals and values, resources and capabilities, and structure and systems.” (Grant, 2010, p.13).
‘Strategic Management’ is a very complex term as many eminent researchers and scholars have had different views and conclusions on strategy. According to White (2004), “Strategic Management involves both systematically developing an idea together with its implications and testing the empirical validity & usefulness of that idea against the real world.” Thus strategy is not only about planning for future but also about confirming the validity of the hypothesis considered and implementing it successfully. Strategy formation may take various forms such as implicit, explicit or emergent. Implicit strategy is a strategy formed by intuitions of an individual. As per implicit strategists, strategic management is about reading the environment
Strategic management addresses how various environmental and internal factors impact the ability of an organisation to outperform its competitors over time (Bruton, Lohrke, & Lu, 2004). Research into strategic management highlights the crucial importance of no only developing and implementing a comprehensive strategy but also revising