22 Aug mum of 250 words in the body Minimum of 2 sources from the literatu
Minimum of 250 words in the body Minimum of 2 sources from the literature in addition to course texts
Content must include:
Summary of the author’s Main Thread – no less than 125 words What you agreed with, did not agree with and why – no less than 125 words
Organizations must look to gain advantages through the establishment of competitive strategies. Rumelt (2011) identified the establishment of a competitive strategy as the ability to achieve sustainability. This means competitors are unable to duplicate the products or services being offered by an organization. The purpose of this post is to analyze the process of determining a competitive strategy, identify the scopes of a strategy, and discuss the decision-making models to implement this strategy. The goal of this discussion post is to identify the factors that go into determining an organization’s competitive strategy. The second purpose is to identify an organization’s competitive scope with an emphasis on the geographic and distribution scopes. Finally, the discussion post will identify the best decision-making models to properly implement this competitive strategy. The discussion post closes with a summary of assertions made by this researcher and also a recap of the main points discussed.
Process: Deciding on a Competitive Approach
It is not enough for an organization to implement a generic strategy. For organizational success, strategic advantages need to be leveraged in order for an organization to establish competitiveness (Rumelt, 2011). In determining a competitive approach, the organization needs to develop a strategy that allows for leveraging competitiveness in the market (Gamble, Peteraf, & Thompson, 2019). Developing this competitive strategy comes down to whether a company’s target is broad or narrow and also whether the company is pursuing this competitive advantage due to lowering costs (Gamble et al., 2019). These two factors allow an organization to gain a competitive advantage, which hopefully will lead to the business sustainability that is desired (Rumelt, 2011).
After an analysis has been run on the two factors that determine a company’s strategy, the next step is to look at the five competitive strategy options. A low-cost provider is trying to implement a lower cost than rival competitors (Gamble et al., 2019). In today’s market, offering lower cost can be enough to draw loyal consumers away from businesses in which frequency has already been established (Ginevičius, Krivka, & Šimkūnaitė, 2010). The next option is developing a broad differentiation strategy, which seeks to differentiate the organization’s product or service from competitors by appealing to a more broad spectrum (Gamble et al., 2019). Rumelt (2011) determined this option was a necessity, because eventually, competitors will identify how to duplicate the product or service. By appealing to such a broad spectrum of buyers, the rivals will be unable to steal consumers. The third competitive option is a focused low-cost strategy. This narrows the buyer segment by having a lower cost than competitors (Gamble et al., 2019). Most successful businesses have niche programs that treat members to lower prices, which motivates other non-members to join this niche program (Ginevicius et al., 2010). The fourth option is a focused differentiation strategy, and this concentrates on outcompeting rivals by offering customized parts that meet the desires of the niche members (Gamble et al., 2019). Appealing to consumer desires is perhaps the most effective strategy when leveraging internal resources (Ginevicius et al., 2010). Finally, the organization can use the best cost provider strategy. This gives customers more value by satisfying buyer expectations on the many facets of service attributes while beating price expectations (Gamble et al., 2019). This strategy option can deepen the advantages, broaden the extent of these advantages, create higher demand, and strengthen the competitive advantage by creating value for the customer (Rumelt, 2011). The next step in the development of a competitive business process is determining the scope of the plan, and this should encompass geographic locations and the distribution scope.
Strategic Thinking: Deciding on a Competitive Scope
Determining the competitive scope can help the organization go on the offensive and be aggressive in the market (Gamble et al., 2019). This aggressive approach will allow the organization to develop a better position in the market (Rumelt, 2011). As with chess, a business must also look to gain a positional advantage through leveraging resources and determining its competitive scope (Rumelt, 2011). A company’s scope is the utilization of activities to determine the extent of its markets reach (Gamble et al., 2019).
Horizontal Scope: Geographic
Gamble et al. (2019) identified two facets of an organization’s scope, and these are horizontal scopes and vertical scopes. The horizontal scope is the range the organization will service segments with its products located within its focal market (Gamble et al., 2019). The goal of an organization is to expand its horizontal scope by achieving new business development or acquiring other companies in a merger (Gamble et al., 2019). An organization’s horizontal scope encompasses the business’s geographic scope. Business leaders must strive to gain a competitive advantage with the geographic scope, because within the scope are organizations trying to steal away the already-established niche customers (Guth, 2009). Gamble et al. (2019) highlighted five ways to achieve competitiveness in the geographic scope. The first is to expand the product or service in two or more categories, and this appeals to a broader spectrum of consumers (Gamble et al., 2019). To do this organizational leader must have the ability to anticipate unpredictable aspects of consumer behavior and turn this into an advantage (Rumelt, 2011). Businesses look to expand into international markets to gain access to new customers, achieve lower costs, gain access to low-cost inputs of production, further exploit its core competencies, and to gain access to the resources and capabilities located in the foreign market (Gamble et al., 2019). Gamble et al. (2019) asserted five models for entry into foreign markets. These are to maintain a one country production base, license foreign firms, employ franchising strategies, establish subsidiaries in foreign markets, and rely on strategic alliances (Gamble et al., 2019). To properly expand into larger geographic scopes, the organization needs to implement a global strategy, which looks to pursue a competitive advantage by offering similar products worldwide and utilizing its same distribution channel (Gamble et al., 2019). Next, the organization must create a more cost-efficient operation (Gamble et al., 2019). Cost efficient operations are an essential strategy for organizational success. Third, the company must expand its geographic coverage (Gamble et al., 2019). The organization can acquire new businesses by offering new products or services that appeal to wider ranges of consumers (Guth, 2009). The fourth and fifth way to expand the geographic scope is to implement new technologies that offer more market opportunities (Gamble et al., 2019). A trend in the global market is the utilization of efficient technologies that provide a more competitive advantage for an organization (Guth, 2009). In addition to managing the geographic scope, an organization must determine its vertical scope.
Vertical Scope: Distribution
The vertical scope of the organization encompasses internal activities, such as the value chain system, raw material production, and service activities (Gamble et al, 2019). A major focus of the vertical scope is determining the distribution channels of the product or service. To properly establish successful distribution, the organization needs to look to expand into multi-business segments (Gamble et al., 2019). There are four facets that come into play when determining this corporate strategy. The organization must pick new industries to enter, pursue opportunities to leverage across barriers, establish investment priorities, and implement actions to boost the performance of the organization (Gamble et al., 2019). These considerations allow the organization to develop a successful competitive strategy that will expand its distribution into multiple markets. To expand the distribution method successfully, competitive forces need to be established. The economic scope needs to be determined, and if opportunities for acquisition are available they need to be aggressively pursued (Gamble et al., 2019). These factors are the determinants in whether an organization should decide to expand its distribution method into other markets. Another factor to determine in global distribution, is deciding if it makes economic sense for the supplier (Guth, 2009). The organization does not want to lose money when establishing its new market strategy, so the economic scope must be established before entrance into the international markets (Gamble et al., 2019). The organization also must look to utilize decision-making models to aid the process of strategy execution into the international markets.
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