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
Strategic Management Concepts
Importance of Strategic Planning
Strategic planning encourages, managers to take a holistic view of both the business and its environment. The importance of strategic planning is its ability to harness a series of objectives, strategies, policies and actions than can work together. Managing a company strategically means thinking and accordingly taking suitable action on multiple fronts. Due to involvement of multiple operations objectives, strategies, policies or actions may, on the surface, appear contradictory and mutually exclusive, but in reality they can work together. Strategic planning provides the framework for all the major business decisions of an enterprise-decisions on business, products and markets, manufacturing facilities, investments and organizational structure. In a successful corporation, strategic planning works as the path finder to various business opportunities, simultaneously it also serves as a corporate defense mechanism helping the firm avoid costly mistakes in product market choices or investments. Strategic planning has the ultimate burden of providing a corporation 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
Reducing Resistance to Organizational Transformations
Every organization goes through a period of change and development at one time or another whether these be big organization mergers, such as companies being bought out such as when Coca-Cola bought Costa coffee for 3.9 billion pounds, or small changes such as an alteration to a software a company uses or the development and implementation of autonomous machinery that helps create an increase in productivity. It has long been argued that companies should apply a participative dialogical approach to manage these changes to help prevent resistance to these changes. However, there is the possibility that this will be resisted due to psychological reasons or self-interest. This essay aims to find out if psychological reasons or self-interest make it impossible to have a truly open and participative approach to organizational development? While looking at how leadership plays in to preparing and guiding through an organizational development. Despite probable positive results, Continue reading
Competitive Strategies for Business
Competitive strategies are concerned with how a strategic business unit achieves competitive advantage in its domain of activity meanwhile competitive advantage is about how an strategic business units (SBU) creates value for its users both greater than the costs of supplying them and superior to that of rival SBUs. An SBU can have lower costs than its competitors or it can have products or services that are so exceptionally valuable to customers that it can charge higher prices than competitors. There are two basic criteria that can help in identifying appropriate SBUs: Market-based criteria and Capabilities-based criteria. For Market-based criteria, if the parts of an organization are targeting same types of customers through the same sorts of channels and facing similar competitors, they might he regarded as the same SBU. As for Capabilities-based criteria, if they have similar strategic capabilities then the parts of an organization should only be regarded Continue reading
Definition of Globalization – Stages of Globalization
A very commonly used term, globalization can mean different things to different people. At a broad level, globalization refers to the growing economic interdependence among countries, reflected in the increasing cross border flow of goods, services, capital and technical know how. At the level of a specific company, globalization refers to the degree to which competitive position is determined by the ability to leverage physical and intangible resources and market opportunities across countries. “Globalization refers to the multiplicity of linkages and interconnections between the states and societies that make up the present world system. It describes the process by which events, decisions, and activities in one part of the world come to have significant consequences for individuals and communities in quite distant parts of the globe. Globalization has two distinct phenomena: scope (or stretching) and intensity (or deepening). On the one hand, it defines a set of processes which embrace Continue reading