Wednesday, December 4, 2019

Firm resources and sustained competitive - Myassignmenthelp.Com

Question: Discuss about the Firm resources and sustained competitive. Answer: Introduction: Strategy farmed by the organization includes goals and objectives of the organization and it also define the major plans to be achieved and for this purpose it include the current activities conducted by the organization and further activities also. In other words, strategy is the common thread which mainly link the activities conducted by the organization and external markets. Particular rules are adopted by the management for the purpose of assessing the four key elements and these rules include products and markets in which organization are interested, changes made in plans for this component, operational synergies, and competitive advantage(Ansoff, 2007). Strategic process of any organization creates an important connection with the external environment for the purpose of conducting strategic analysis. External environment of the organization must be considered as important part for strategic analysis and this environment is broader in scope. It is necessary for organization to consider all possible solutions and other external environmental factors while framing the best strategy to meet the organizational objectives(Barney J. , 1991). Structure of the report includes importance of external environment in strategic management and issues faced by strategy makers, barriers which results in issues and problems while making the strategy, argument in this context, action plan, recommendations. Lastly, paper is concluded with brief conclusion. Importance of external factors in strategic management: Evaluation of external factors mainly focused on the future and it mainly consider those factors that are important for the organization. Organization of the external environment is the organization which has set of factors lies outside the organization. For example, economic, social and political trends of the country, technological capabilities and competition, could in some manner affect the activities of the organization for the purpose of achieving its goals. The main aim of the external environment strategic analysis is to consider these external factors and their effect. Some of these factors are trade relations of the organization and conditions related to investment liberalization, development of technology, rapid changes occurred in conditions, globalization, expansion of consumers choice, increased competition(Barney, 1997). Continuous changes are occurred in the external environment and it results in dynamic business environment. Pressure is created on companies to reduce their cost, increase efficiency and quality level of innovation. Specifically, increase in competition also give rise to the question that is how to retain existing profitable customers and it also how to attract new customers in the organization. Various factors provide high degree of competition to the companies operated in market and these factors include changes occurred in the choice and need of the consumers and number of business entities are increased. Competition is considered as force which pushes the organizations to make changes in their search related to effective solutions for the issues. Therefore, it is necessary for organization to know how to deal with these issues(David, 2007). For the purpose of establishing strong position in the market and for earning high profit to increase the advantages, companies adopt different strategies. Some organizations mainly consider the price of their products, some consider quality of the products, and some organizations other factors(Grant M. , 2005). Marketing strategy framed by organization mainly helps the organization to determine whether business is possible in competitive environment. It must be noted that marketing strategy of the organization does not framed on the basis of random factors, but strategy is influenced by the macro environment (uncontrollable environmental factors) and also the micro environment. It includes external forces and these forces are linked with the will of the company for the purpose of achieving its goals. It affects the internal structure of the company and also culture, personnel, production and financial opportunities. All these factors are evaluated by the organization as a complete opportunity for improving the competitiveness. For the purpose of ensuring effective working of the marketing strategy, organization must determine the internal and external conditions and also the internal and external conditions of their competitors. Evaluation of external factors helps the organization to ensure active mode of management instead of passive. In active mode of management, managers mainly consider the future events and plan accordingly, and he also considers the available opportunities and other situations which are favorable for the organization. Active mangers recognize the threats for the organization and how to deal with these threats. Therefore, it can be said that organization with active managers are efficient, effective and successful(Grant, 2008). Porters five forces of model: Porters five forces of model are used by organizations as an analysis tool, and in this five industry forces are used for the purpose of determining the intensity of the organization and also the level of profitability. This model was created in 1979 by M. Porter, and through this organization determines the five key competitive factors which directly affect the industry. Following are the five competitive factors which must be analyze by the organization: Threats- this force consider the entry of new entrants in the market, and determine how easy it is for organization to enter into particular market. It is necessary for the existing organizations to create high barriers to reduce the entry of new entrants(Future orientation, 2010). Bargaining power of suppliers- strong power of bargaining enables the suppliers to sell the raw materials at higher price and also low quality raw materials to the buyer. All these factors directly influenced the profits of the buying firms. Bargaining power of buyers- in this if bargaining power of the buyers is strong then they can demand lower price or higher product quality from industry producers. Threats of substitutes- This factor consider the threat of alternatives, in which it is easy for buyers to find the substitute products with attractive prices or better quality and when buyers switch from one product or service to another with little cost. Rivalry from existing competitors- this force is considered as major determinant on how competitive and profitable an industry is. This model determines a structure of the industry and the competition level exists in the industry. In case any industry have low barriers in context of entry, very less buyers and suppliers, but with number of alternative products and competitors will be considered an competitive industry and therefore not very attractive because of its low profitability.(Dzemyda, 2014) Issues faced by strategy makers: Strategy makers face various issues while making the strategy for external environment factors. In other words, organizations face various issues while conducting strategic planning process and it is necessary to understand and address these issues. Some of these issues are stated in detail below: Task environment of any business includes the components of the environment that directly affects the company, and these components include suppliers, customers, and competitors. It is necessary for strategy maker to consider these components while making the strategy. This can be understood through example; customers is the most important part of the strategic decision making and any strategy which does not consider the needs and requirements of the customer can potentially results in great loss to the organization. Strategy makers also face the issue related to identification of components which indirectly affect the business activities such as government, socio-cultural, technological and economic conditions. This can be understood through example; organization must comply with the taxation, labor market and industry-related regulation and in case strategy makers fail to consider these factors will face severe issues such as loss of opportunity and new threats in future(ISU, 2015). Another issue faced by strategy makers is identification of reliable source of innovation. It must be noted that environment holds different reliable sources of innovation for the purpose of an entrepreneurial venture. Any success or outside event which is not expected by the organization can indicate a new business opportunity for the business. Strategy makers must frame the strategy which has scope of necessary innovations for the purpose of grabbing new opportunities in the market. Factors related to issues: Following are some factors of external environment which cause issues for strategy makers while conducting strategy planning process: Economic condition- economic conditions of any country directly influence the spending criteria of the consumers such as increase in rates of interest or high unemployment will reduce the consumption of non-essential goods. Competition- competition strength of any organization is a factor which constantly changed in the external environment of the business. Competitors affect various other factors such as they change the marketing strategies, products lines and prices. Technology- another important factor is technology and in this changes occurred on continues basis, and this factors continuously impose pressure on the business or organizations. Climate- changes occurred in climate is the severe threat because this change is only recognized if considered on a decade-by-decade basis. Effects of changes occurred in climate not fall equally on all nations and all businesses(Khalique, 2014). Law- changes occurred in taxation provisions and other laws directly affect the strategies framed by business. Sometimes these changes occurred overnight and with very little warning because o which business organizations does not get any time for the preparation. Media- another important factor which results in this issue is media, as it also result in important and continuous changes. The main driver which results in this change is technology and the rise of internet. Discussion: The main aim of strategic management is to understand the advantages of understanding the external factors of environment while framing the strategy. It also includes the understanding of these aspects and prepare for them. There are number of organizations which spend more resources and time for addressing the change instead of preparing them. Conclusion: After considering the above facts it can be said that Strategic process of any organization creates an important connection with the external environment for the purpose of conducting strategic analysis. External environment of the organization must be considered as important part for strategic analysis and this environment is broader in scope. Recommendation: It is also recommended to the business entities to evaluate all the necessary aspects of the external business environment before framing the main strategy of the organization, and for this purpose they must include all direct and indirect components of the external environment. Action plan: Action plan for strategic analysis of external environment analysis is stated below: Actions and objectives stated in the strategy and in this action are taken for defined objectives. After that manager decide the person or team who conduct these actions for achieving the objectives. Management also states the time and place when these actions are taken place and they also arrange the resources for the same. Lastly, progress and necessary information is communicated to the relevant person(Voiculet, 2010). References: (2010, 10 26). Retrieved 2 3, 2018, from Future orientation: (2015). Retrieved 2 3, 2018, from ISU: Ansoff, H. (2007). Strategic Management Classic. Hamsphire, UK: Palgrave MacMillan. Barney. (1997). Gaining and sustaining competitive advantage. Prentise Hall, New Jersey. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, Volume 17. David, F. (2007). Strategic Management Concept and cases. Prentice Hall: upper saddle river, pearson. Dzemyda, I. (2014). Retrieved 2 3, 2018, from STRATEGIC MANAGEMENT: Grant. (2008). Contemporary Strategy Analysis. Oxford Carlton: Blackwell Publishing Malden. Grant, M. (2005). Contemporary Strategy Analysis. Wiley. Khalique, M. (2014). Retrieved 2 3, 2018, from Strategic Planning and Reality of External Environment of Organizations in Contemporary Business Environments: Voiculet, A. (2010). The impact of external environment on strategy. Retrieved 2 3, 2018, from MPRA:

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