An industry-based view, illustrated by Porter (1980), decides firm strategy and performance. Sustainable competitive advantages can be discovered by industry analysis and by selecting from the generic strategies. The competitive strength and the firm’s ability can maintain positional advantages through the efficient and effective implementation of competitive strategy. Secondly, a resource-based view (RBV), was demonstrated by Barney (1991), advocates that firm-specific differences determine strategy and performance. RBV emphases internal resources and capabilities of organisations. RBV portraits companies as idiosyncratic bundles of resources and capabilities that are available for distribution by the organization’s business units. Heterogeneity in the resources and capabilities is the reason of variations in organization performance. Sustainable competitive advantage is not the result of correct position in the external environment but is derived from the organization’s internal resources, which are valuable, inimitable, rare, and nonsubstitutable. Industry-based view and resource-based view are complementary because they settle the relationship between Continue reading
Business Strategies
Case Study of Zara: A Better Fashion Business Model
Zara is one of the most well known brands in the world and is also one of the largest international fashion companies. They are the third largest brand in the garment industry and are a unit of Inditex. It their flagship range of chain stores and are headquartered in Spain. Zara opened its first outlet in Spain in 1975. The headquarters of the company is based in Galicia. There are more than 2600 stores across 73 countries in the world. The Zara clothing line accounts for a huge bulk of its parent group’s revenues. There are other clothing brands owned by Inditex such as Kiddy ´s Class (children’s fashion), Pull and Bear (youth casual clothes), Massimo Dutti (quality and conventional fashion), Bershka (avant-garde clothing), Stradivarius (trendy garments for young woman), Oysho (undergarment chain) and Zara Home (household textiles). Inditex owns all Zara outlets except for places where they are not Continue reading
Case Study of General Electric: Six Sigma Implementation
General Electric, one of the most successful companies implementing Six Sigma, has estimated benefits on the order of $10 billion during the first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied Signal blazed the Six Sigma trail. Since then, thousands of companies around the world have discovered the far reaching benefits of Six Sigma, including Japan’s Taiichi Ohno used as a model for the Toyota Production System (TPS), did not let him down during bad economic times. An Overview of Six Sigma Motorola coined the term “Six Sigma” and created the original formulas in the 1980’s. The result was a culture of quality that permeated throughout Motorola and led to a period of unprecedented growth and sales. The crowning achievement was being recognized with the Malcolm Baldrige National Quality Award. Motorola factory that manufactured television sets in the United States, took over by Continue reading
First Mover Advantage Vs Late Mover Advantage
Companies across the country are consistently being faced with tough decisions regarding business moves to make that will launch them forward in a new competitive market. There are two types of strategies that companies look into when they want to diversify into a different product market. The first approach is called the ‘first mover’ theory and the second is called the ‘late mover’ theory. Both of these strategies have strengths and weaknesses that can either solidify or act as a detriment to the company’s entry into the market. First Mover Theory Advantages and Disadvantages The potential advantages of the first mover theory are numerous. For one, the corporation has the ability to attain exclusive company-product association. It can also find success through the effects of networking and see a rise in consumption as demand grows. First mover theory can help the company determine economies of scale and it can also Continue reading
Theories of First Mover and Late Mover Advantages
Business managers find themselves in a dilemma on the best market entry strategy to adopt among the first and late mover strategies when making an entry into a new market. Theoretical and practical investigations and evaluations into the merits and demerits associated with these approaches could help them make informed decisions on the most appropriate market entry strategy for their firms. Among the advantages a business organization is likely to gain with the first mover strategy is a significant occupation of the target market. This can be in terms of resource capitalization and buyer switching costs. Switching costs stem from the financial burden of initial transaction costs, employee training costs, customer learning costs, and the cost of qualifying a new supplier. Theoretically, switching costs facilitate the creation of value and share of the market although it may not translate to higher profits. Another advantage argued on a theoretical framework is Continue reading
Stakeholder Analysis – Mendelow’s Matrix
As stewards of the shareholder’s investment, directors have a fiduciary duty to safeguard their investment in the business and to work to maintain and increase the wealth of the shareholder. This is the traditional or stockholder view, but a more considerate approach states that companies should not have a limited view; rather they should have an extended view with regard to the whole society. The stakeholder view states that that as an organization is so powerful, socially, politically and economically, unrestrained and injudicious use of their power will eventually lead to the infringement of the rights of other people. The stakeholder theory thus proposes corporate accountability, not just to the shareholders, but to the stakeholders of the company as well. A stakeholder is an entity that can affect, or be affected by the achievement of an organization’s objectives. But, there is considerable dispute about who should be considered to be Continue reading