Strategy is the plan of action that allocates resources and activities and aims at dealing with the environment, achieving a competitive advantage and attaining the organisation’s goals. Competitive advantage refers to what sets the organisation apart from others and provides it with a distinctive edge for meeting customer needs in the marketplace. The choice that will make the organisation different is the essence of formulating strategy. In order to remain competitive, companies need to focus on core competencies, develop synergy and create value. Competitive advantage is a company’s ability to perform in one or more ways that competitors cannot or will not match. A competitive advantage is said to be sustainable when it has the means to edge out rivals when competing for the favors of customers. Although sustainability is the ideal case for advantages, the most common competitive advantages are leverageable, which means that a company can use them Continue reading
Corporate Strategies
Case Study: Nissan’s Successful Turnaround Under Carlos Ghosn
Nissan is a famous automobile manufacturing company which was founded in 1933. After the Second World War, Nissan expanded its operations globally. Nissan was very well known for its advanced engineering and technology, plant productivity and quality management. However, during the previous decade, Nissan management has emphasized on short-term market share growth, instead of profitability or long-term strategic success. Nissan’s designs had not reflected customer opinion. In addition, Nissan managers tended to put retained earnings into keiretsu investing (equity of suppliers), rather than reinvesting in new product designs as other competitors did. These inappropriate strategies combining with the Asian crisis influence on a devaluation of the yen led Nissan to the edge of bankruptcy. Nissan was in need of a strategic partner that could lend both financing and new management ideas to foster a turnaround. Furthermore, Nissan sought to expand into other regions where it had less presence. In order Continue reading
Strategic Marketing Tools – Ansoff Matrix and BCG Matrix
Ansoff Product-Market Expansion Grid A useful planning tool in respect of markets and products is the matrix developed by Igor Ansoff, who is regarded by some as the ‘Father of Strategic Management’. Fully titled the Ansoff Product-Market Growth Matrix, the tool was first published in Harvard Business Review, 1957, in Ansoff’s paper Strategies for Diversification. The Ansoff Product-Market Expansion Grid or Ansoff Matrix helps to understand and assess marketing or business development strategy. Any business or part of a business can choose which strategy to employ, or which mix of strategic options to use. This is a fundamentally simple and effective way of looking at strategic development options. Each of these strategic options holds different opportunities and downsides for different organizations, so what is right for one business won’t necessarily be right for another. Think about what option offers the best potential for your own business and market. Think about Continue reading
Defenses Against Takeover Bids – Anti Takeover Strategies
A firm having all or any of the following features may provide a temptation to an acquiring firm to take-over the former: The target firm has under performed other shares and the overall market in terms of return the shareholders in the preceding years. The target firm has been less profitable than other firms, and The promoter/owner group has lower shareholding in the target firm and the public has a higher portion. If an acquiring firm makes an offer for negotiated merger to the management of the target firm, it is up to the latter to accept or not to accept the offer. The target firm may not find the offer to be attractive and hence it may reject the offer. However, the acquiring firm may still persists with the idea either by making a tender offer or attempting a hostile take-over bid. In such a case, it is the Continue reading
Exploring the Concept of Sustainable Strategic Fit
Sustainable strategic fit is a concept that refers to the alignment between a company’s business strategy and its sustainable practices. In today’s business landscape, sustainability is increasingly becoming a critical factor for companies to remain competitive and relevant in the long-term. Sustainable strategic fit helps companies achieve their sustainability goals while also driving business value. To understand sustainable strategic fit, it is important to first define what is meant by sustainability in business. Sustainability refers to the ability of a company to operate in a way that meets the needs of the present without compromising the ability of future generations to meet their own needs. This includes environmental, social, and economic considerations. Businesses can achieve sustainability through various practices, such as reducing waste and emissions, sourcing materials sustainably, supporting local communities, and promoting diversity and inclusion. However, achieving sustainability is not enough on its own. Companies must also ensure that Continue reading
Case Study of Jack Welch: Leadership that Creates Innovation
When Jack Welch became CEO of General Electric in 1981, he was only the 11th CEO the company had seen in its 120 years of existence. Although GE was a $13 billion a year company, it began showing signs of necessary change as it had reached the stage between maturity and decline. After 20 years at the helm, Jack Welch had turned General Electric (GE) into one of the world’s most successful companies. Welch increased GE’s market value from $13 billion to over $300 billion in 2001. He guided the once struggling company to what was then the biggest corporation in the entire world as well as the most profitable. Through the use of goal setting, empowerment, and communication Welch transformed the gigantic and complacent company into an energized multi-national organization ready to face world competition. Through an analysis of the techniques employed by Welch, one can gain a better Continue reading