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Firmsthat make an effort to succeed in all the areas end up not fulfillingat all. It is, therefore, important for companies to identifyspecific areas that generic business is to be employed. Firms thatdifferentiate by providing high quality products have the risk ofundermining the same quality. Sometimes the quality of the goods andservices may not be adversely affected but the firm may depict anambiguous image which would highly affect the performance of all itsproducts and services (Rothaermel2015). Therefore to be successful, acompany should only employ one of the generic strategies (Saloner,Shepard & Podolny, 2001).. Failure to do so will make the firmsget trapped at the center and hence fail to exploit competitiveadvantages over other companies.
Ina focused strategy, there is the risk of rivals creating workingpolicies that could equal the focuser’s potential and abilities toserve the niche market. That provides them with an opportunity to eatinto the segment of the market formerly served by the focuser(Birkinshaw, 2004). There is also the risk of the market segmentbecoming so much attractive and hence gets crowded with rivalproducts which contribute substantially to reduced profit margins
DQ6.3 Coca-Cola Cost- Leadership Value Chain
All entire activities related to receiving and storage of outside sourced materials
The makers of products and all services
Entire activities connected to acquisition of completed products and services to customers
Marketing and sales
Basically information activities-communicating to customers about goods and services.
Entire activities connected to maintaining the performance of product after they have been sold.
DifferentiationValue Chain at Coca-Cola
This is about resource acquisition for an organization
Entire activities related to recruiting, advancing, motivating and giving incentives to the workers of a business.
Activities related to managing information and processing of information
Related to a various range of support mechanisms and functions including finance, together with planning and quality control, and entire senior management.
Integrationbusiness-level value chain at Coca-Cola
Integrated cost leadership differentiation
Coca-Cola leads in the competition through provision of more options natural fruit juice and effective service.
Innovation in production and advanced use of technology
Advanced levels of diversification
Application of synergy between other Coca-Cola distributors to enhance savings
Collaboration with other distributors to distribute Coca-Cola products
Multinational strategy allows Coca-Cola to respond to the changing business contexts around the globe.
Theindustry chosen is the TV manufacturing industry. At the introductionstage, as expected, there were few competitors, and there were nosignificant challenges from related products as the sector was notyet advanced (Rothaermel2015). The buyers have little power, andhence, the supply of the sets is small. The manufacturers are quitein control because there are small volumes, and the industry is quiteinsignificant to the supplier.
Duringthe growth stage, the number, of manufacturers of the TV setsincreases quickly as many companies penetrate the rapidly expandingindustry. Due to the increase in demand, there is small supply whichreduces competition among the manufacturers. On the other hand, thepower of the customers is low. At this stage, the industry is highlyprofitable as the company’s position themselves to enjoy a biggershare of the market.
Inthis stage, TV manufacturing companies settle for dominant designmodels to maximize on the economies of scale. The smaller players inthe market are acquired by bigger companies, or alternatively theyare compelled to exit the industry. This is the stage where thebarriers to entry become very high as companies reorganize andconsolidate gains made in the past years.
Atthe maturity stage, the consumers have an increased power. That isinformed by the fact that supply is equal to or slightly higher thanthe demand. There is reduced power of the suppliers because thenumber of TV sets bought in the sector is significant tomanufacturers. There are increased levels of threats from substituteproducts informed by the growing number of manufacturers. There is anintense competition that could necessitate mergers. However, thepioneers of the industry are performing well and making good profits.There are reduced profits due to the fierce competition. Companiesare making deliberate efforts to retain their grip of the market.
Thereare a few stumbling blocks at the decline stage the capacity of theindustry is more than the supply which enhances the power of theconsumers. Due to competition, the poor performing manufacturers arecompelled to quit which reduces competition among the companies. Itis at this stage that firms join forces to request for governmentinterventions and other protections to save the declining industry(Rothaermel2015). There is the threat from the substitutes, but thepositive side of it is that well-managed firms still survive as thereare no new industries. The well established industries continue toperform well even as others cry foul due to the poor performanceexperienced in the entire sector.
Appleis a company that has been highly innovative in all aspects. This isinformed by the fact that the firm has a clear strategy andwell-defined goals. The company uses innovation as means to reach itsclear objectives. Due to continuous and real leadership and settingof strategic goals by the firm, it has become a market leader in itssector (Birkinshaw, 2004). It is a visionary company that is focusedon the achievement of its objectives. The firm also has some of themost productive employees in the industry who are always generatingfantastic ideas for the company. The company does not just makeinnovations but also implements the changes made which differentiatesit from most of the companies(Saloner, Shepard & Podolny, 2001)..The boldness, in which the corporation approaches and applieschanges, ensures that the firm is open and ready to embrace failureas part of change and learning process. This highly encouragesemployees of the company to adopt innovative ideas because they havethe support of the business. The firm also creates an environment oftrust, with employees being encouraged to come up with ideas,however, ridiculous they may sound.
Appleapplies radical innovation it its growth process. All the innovationsby Apple have massive impacts on the market and the there arecontinuous changes by the firm which enhance the performance of thecompany. Disruptive innovation is also used by the firm. It is aninnovation model that favors only the most motivated and henceinnovative group of employees can be able to sustain it.
Onelow level technology innovation was made by Irving Naxon, whoinvented the crock pot, which was known as Naxon Beanery. Afterretiring in 1971 he sold the enterprise to Rival Manufacturing. Thenew owner streamlined the design, and renamed it the Crock Pot.Naxonwas determined to come up with a way that could cook with use ofminimum heat or electricity. He wanted an element that was low incost and energy (Birkinshaw,2004). .The crock pot is significant incooking among the Americans. The innovation has been modified by manyindividuals and companies but the original concept is the same. Forexample the fireless cooker basket is a low-level technology that hasbeen considered very successful in Africa. The cooker has beenmodified by groups of women who felt that they could play their roleto save forests. The only way they could do that was by modifying theinnovation to adapt it so that little or no fire is required incooking. The basket is highly insulated and cooks by preventing heatlosses from pans that are heated for a few minutes hence softeningthe contents slowly. It is a popular product among communities thatearlier used firewood as their main source of energy. It is certainlyan innovation that has revolutionized the way of life of the people,and saved a lot of trees and electricity consumption.
Thiswas a business-level strategy of differentiation. This is informed bythe fact that the firm used the strategy that could make the firmstand out in the market. The objective of the company inincorporating grocery stores was an effort to become a low-costprovider in the industry to exploit the available ways todifferentiate itself from the competitors (Sadler, 2003). Themanagement of the firm identified the opportunity that could give ita competitive advantage. The company also capitalized on itsposition as a market leader to further exploit an untapped market.With the massive resources that the firm has, it could afford todiversify. By focusing on cost and cost leadership, the firm was ableto exert its position as a market leader in the sector (Saloner,Shepard & Podolny, 2001). Wal-Mart was making the deliberateeffort to make its brand stand out through the provision of uniqueproducts to fill an existing gap in the market. The firm was able toidentify significantmethods used by customers at the stores andwas able to design the products to meet the specifications of thecustomers. The company was determined to make the business focus on aparticular segment of the market in which it could align itsstrengths.
LiveNation acquired would benefit from economies of scale and enhancedmarket power plus an increment of the market share (Rothaermel2015).The acquisition also led to the reduction in the cost of productionand also reduced competition which has a lot of influence on theprofitability of the firm. The addition provides a centralizedmanagement and diversifies its products and services to utilize theincreased infrastructure. The firm could also be able to, lower theprices due to the reduced costs of production to achieve more salesvolumes to enhance its profit margins (Heskett, Sasser, &Schlesinger, 2003). The company also acquired improved market powerdue to the increased levels of control. It, therefore, was able toexercise more control over the suppliers and distributors. They wouldalso enjoy increased power over customers. The power over thecustomers, suppliers and distributors were derived from the reducedcompetition informed by the acquisition (Sadler, 2003). Theacquisition also provided the firm with an opportunity to penetratenew markets. That could be done through collaboration withdistributive networks offering related products and services. Thatwas an important factor in the enlarging and penetration of themarket.
Themerger, however, had a downside in the firm because there were legalconsequences from competitors who felt that live nation was out tocreate a monopoly through an acquisition of the competitors.
Iagree with him that companies should not just implement strategiesbut should rather evaluate them so that they select those that couldfit their individual circumstances (Rothaermel2015). Firms andorganization should be aware of the fact that they are unique innature and what works out for one organization may not work out foranother. Certainly the world is not flat. Business should rely onreliable data to guide them in their expansion endeavors.Globalization is an unavoidable phenomenon that is sweeping acrossthe world, and firms and companies that position themselves againstit are more likely to suffer harsh repercussions.
Weshould not fall victims to "globaloney" by insisting thatthe world flat just like so many in the past. We should analyzerelevant and available data before we make any conclusions. Data isreadily available, and we should use analytical skills so that suchdata could be of importance in making more accurate businessdecisions
Acompany strategy is the road map for the entire business, and itarticulates how the business utilizes most of the resources. It isthe plan that guides the company to achieve specific objectives.Organizational structure is the way the various blocks that make theorganization fit internally (Saloner, Shepard & Podolny, 2001).It is, therefore, to say that plans and strategy on one hand must beenjoined with the structure on the other so that the potential of theorganization could be realized. Structure refers to the hierarchicalnature of the society. It defines the tasks, assign responsibilitiesand put the entire workforce in place so that the goals of theorganization could be achieved. The structure ensures that there iscollaboration in all the levels of personnel to provide the rate oftargets achievement is not hampered (Sadler, 2003). The strategyhelps the organization construct is structure. Alignment is therecrucial to enable the organization to delivers its mandate. Thestructure is all about the people, positions, teamwork among otherelements of human resources (Rothaermel2015). The structure of anorganization is dependent on proper analysis of the strategy. Thefunction of the structure is, therefore, to implement the adoptedstrategies to achieve goals and objectives of an organization. Anynew policy within an organization is only implemented after thoroughconsultation and reorganization of the workforce to ensure a smoothimplementation.
Iconsider an organization that I worked for, some years ago. In theorganization, integrity was one of the core values. Actions andconduct of all had to put the reputation of the organization at thefore (Rothaermel2015). In dealing with the stakeholders, highestethical behaviors were adhered to protect the image that the grouphad built over the years. Orientation to customers was paramount, andtheir concerns were taken seriously and addressed whenever theyemerged. Teamwork was emphasized in all the departments and wasconsidered an effective management strategy for moral issues inorganization management (Rothaermel2015). Innovation was anothervalue that was stressed and supported by the entire management.Performance priority value was found as the avenue to demonstrateskills and experiences acquired over the years.
Thenorms of the group included leadership and supervision whereby eachof the employees was supposed to show leadership skills in theimplementation of the strategies of the organization(Rothaermel2015). Everyone was considered a leader in their way.Communication was well structured so that it could be effective inthe management and to the rest of the employees. Teamwork was alsoemphasized to enhance performance in all sectors of the organization.Cordial administration-employee relations were another norm that washighly upheld in the organization
Thetop management should clearly define the responsibilities of keymanagers. They should be accountable for all the major decisions theymake in the organization. That ensures that they only make decisionsas defined in their list of responsibilities so that they don`t makedecisions that could be detrimental to the welfare of thestockholders. By being accountable at all times, the managers areable to demonstrate their commitment to serve the employees. Thereare well-defined evaluation measures so that the managers are judgedby their results and not on other unquantifiable mechanisms(Rothaermel2015). Well adherence to the three rules ensures that keymanagers cater for the interests of all the stakeholders. Auditingcould also play vital role especially in the balancing of financialrecords to ascertain the financial position of the departments theyhead. There should generally be good monitoring systems to ensure themanagers are always on track in line with responsibilities and goalsof the organizations.
Nikecould adopt corporate social responsibility activities to enable theorganization relates more with people in different regions.CSRfunctions enable the organization to have more impact ant reach morepeople around the globe. In the activities create awareness and theorganization could eventually penetrate markets that it couldn`treach before (Rothaermel2015). The organization can cover widergeographical areas and hence further acquire the opportunity toenhance the goals of the firm (Rothaermel2015). The role of CSRcannot be understated in relation to a multinational such as Nike. Itcould lead to discovery of new frontiers that could capture theimagination of the company.CSR activities provides an opportunity toorganizations such as Nike to demonstrate its compassion andactivities aimed at giving back to societies that have been sosupportive for so long.
Birkinshaw,J. M. (2004). Strategicmanagement.Cheltenham, UK: Edward Elgar Pub.
Heskett,J. L., Sasser, W. E., & Schlesinger, L. A. (2003). Thevalue profit chain: Treat employees like customers and customers likeemployees.New York: Free Press.
RothaermelFrank,T(2015).strategic management McGraw-hill education.e-boook
Sadler,P. (2003). Strategicmanagement.Sterling, VA: Kogan Page.
Saloner,G., Shepard, A., & Podolny, J. M. (2001). Strategicmanagement.New York: John Wiley.