A strategic change cycle is mainly utilized to correlate the planning process of an organization with the vision, mission and values of an organization. This implies that an organization should focus developing its strategies that may assist it to accomplish its long run vision. This will assist the organization in managing the entire organization in a strategic manner in order to gain a sustained growth in the future. The key objective of the strategic change cycle is to make sure that the organization continues to provide maximum value to the stakeholders by undertaking the right strategies at the right time. With the help of the strategic change cycle, the organization should also ensure that a proper vigilance is kept on the internal and external environment to understand the future challenges and opportunities. Hence, this is one of the key concepts that may assist an organization to gain success. 10 Steps Continue reading
Strategic Management Tools
Managing Collaborative Relationships with Stakeholders in Organizations
Understanding the principles of effective collaboration with other organizations is important in an organization as the current stakeholders have an active interest, the interests could be financial, environmental or charitably within the organizations. Within an organization, building relationships with stakeholders can prove to help your business by using their expertise’s and knowledge. There can be both moral and business reasons to collaborate with stakeholders. By working with stakeholders that have current interests allows you to have a common ground and want the best outcomes for your organization, it allows you to create outcomes together, improve current systems and work on these together to create a better functioning organization. Collaborating with stakeholders allows new ideas and helps towards problem solving. Looking at the stakeholders allows you to gain experience and feedback to create a better working business, it also allows you to build relationships which can help towards future cost, flexibility Continue reading
Institution-Based View of Business Strategy
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
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