Competing Capabilities in Business - Essay Example

Competing Capabilities Introduction Companies made a discovery about time being a new source of competitive advantage. Companies speeding new products to the market, manufacturing timely or responding promptly to customer complaints tend to be good at other aspects as well (Savitt 2014, p. 12). The other aspects of specialty include consistency in high-quality product production, high ability in new market exploitation among other unique aspects. Wal-Mart’s Success Case Study The success of any business or entrepreneurial activity is highly dependent on the owner’s personal inputs and the type of employees hired (Kor & Mesko 2013, p. 234). The employees reflect the company’s organization externally and determine customers’ retain ability through customer relation initiatives. Most explanations associate Wal-Mart’s remarkable success to a few familiar and highly visible factors. The inspirational features of the founder Sam Walton to his employees and the relatively spacious stores are the fundamental factors associated to the success. Effective customer relation mechanisms leading to strategic business decisions is the transformational factor of the company to capabilities based competitor. Customer contentment in terms of quality, pricing, and timely availability of the commodities as per the customers’ expectations is the baseline of Wal-Mart success (Roberts & Berg 2012, p. 13). Case Examples Illustrating the Capabilities-Based Competition Rivalry is dynamic outmaneuvers and overtakes the established companies. An initial illustration of this is in the Wal-Mart case study. The following are the other featuring examples illustrating capability-based competition. First, in the days after World War II, Honda became a good manufacturer of a 50 cc engine designed for attachment to a bicycle. Contemporarily the company is challenging a veteran company General motors and Ford for dominance in the global automobile industry. The principle illustration proves the dynamic nature of markets and competitions. The second illustration is the case of Xerox that invented xerography and the office copier. In the 1976 and 1982, Canon brought more than 90 new models, reducing Xerox’s share of the mid-range copier market in half (Stalk, Evans & Shulman 1992, p. 61). Currently, Canon is a key competitor in both mid-range copiers and high-end color copiers. Such competition is very healthy to the customers, as a company must strive to incorporate a relative advantage over the other. The third illustration is a case in which the utmost challenge to department store seniors like Macy’s comes from the Limited. The Limited is a $5.25 billion design, procurement, delivery, and retailing machine-exploiting multiple of consumer segments with the alertness of many small boutiques (Stalk, Evans & Shulman 1992, p. 61). The anticipated competitors were other large department stores and small boutiques. Competition is not dependant on the age of size of the company in the market but lies in the relative advantage existing in production and sales. The final illustration is the scenario where Banc One enjoys highest returns on Assets in American banking industry as compared to Citicorp. Citicorp remains the largest Bank in America in terms of assets despite the challenge from a comparatively smaller corporation. The scenario is a proof that the size in terms of assets is not the only considerable factor in market competition. In addition, it is an indication of the revolutionary and dynamic nature of competitions in the market (Magin 2006, p.10). Market Nature in Relation to Competition More dynamic business environments demand correspondingly more dynamic strategies to gain relative advantage in the market over other competitors. According to Wierenga implementation of entirely new dynamic strategies, obviously changes past behavior and common marketing activities like new product development alter the nature of competition in the market (Wierenga 2008, p. 240). Four Principles of Capabilities-Based Competition The building blocks of corporate strategy are the business processes, products, and market. The central focus is lying on business processes. Verbeke refers to a specific firm advantages and dominance of regional markets as business processes accounting as key prosperity building blocks (Verbeke 2013, p.551). Success in competition depends on altering a company’s core processes into strategic capabilities that constantly provide superior value to the customer. The whole process is achievable by conducting systematic market assessment where consumers’ feedback and inputs in production acquire critical consideration (Keillor 2013, p.124). Companies create the capabilities by making strategic investments in a support infrastructure that links together, transcends traditional Strategic Business Units, and is the Chief Executive Officer (CEO). Cross docking at Wal-Mart is an illustrating example of a business process as a business process (Ray 2010, p.173). It is an essential component of the overall process of keeping retail shelves filled while minimizing and purchasing in truckload quantities. The titleholder of capabilities-based strategy is the CEO because capabilities are essentially cross-functioning (Cornelissen 2004, p.130). The head and founder of a given business should reflect the results in terms of performance in the business. Strengths and Weaknesses The article by Stalk, Evans and Shulman (1992), presents an obvious strength in its exclusive detailing of competition capabilities using numerous real-time case examples. The case about Wal-Mart in the article gives details of Wal-Mart in terms of asset and relative marketing capabilities in relation to its competitors. It highlights the input of Wal-Mart management towards the success of the company indicating that the top management has a role in helping individual store managers in learning from the market and one another. The concept of strategic marketing and rational business decision-making playing a fundamental role within Stalk, Evans and Shulman article, this is the strength. Strategic marketing strategies has gained numerous emphasizes throughout numerous marketing competition theories (Kneer 2009, p. 3). The article is analytical and logical in explaining the nature of competition between the companies. It cites that companies that compete effectively on time by increasing the speed of transporting new commodities to the market stands out in the competition. In addition, corporations manufacturing in a timely manner and addressing customer complaints promptly tend to stand out amongst the competitors. The weakness noted in the article is its lack of fairness while addressing the case of Wal-Mart. It ignores and assumes the negative aspects of Wal-Mart bin relation to competition capabilities (Chen 2008, p.6). By mentioning that Wal-Mart’s goals were simple though hard to execute, the article fails to address whether Wal-Mart has achieved the hard to achieve goals or not. The article has a weakness in its lack of clarity in addressing the company’s transformation into capabilities based competitor. The concept of shift in a strategic framework in order achieves aggressive goals are not clear. Using Medequip as the case example, the article cites that the managers at Medequip transformed what looked like a win situation. The link between the subject matter and the content is not clear citing a weakness in the article. Conclusion Capabilities are mutually exclusive. The occurrence of one capability does not trace cause by another. Choosing the right capability is the real meaning of strategy. Management of any business has a fundamental role to play in order that the company becomes successful. Bibliography Chen, J. (2008). Wal-Mart Case Study - China Operation. Munich: GRIN Verlag GmbH. http://nbn-resolving.de/urn:nbn:de:101:1-201311174702. Cornelissen, J. (2004). Corporate Communications: Theory and Practice. London: SAGE. Keillor, B. D. (2013). Marketing in the 21st Century and Beyond: Timeless Strategies for Success. Santa Barbara, CA: Praeger. Kneer, C. (2009). The Wal-Mart Success Story. München: GRIN Verlag. Kor, Y, & Mesko, A. (2013), Dynamic Managerial Capabilities: Configuration and Orchestration of Top Executives Capabilities and the Firms Dominant Logic, Strategic Management Journal, 34, 2, pp. 233-244. Luo, Y. (2001). Strategy, Structure, and Performance of Mncs in China. Westport: Conn, Quorum Books. Magin, V. (2006). Competition in Marketing Two Essays on the Impact of Information on Managerial Decisions and on Spatial Product Differentiation. Wiesbaden, Deutscher Universit̃ts-Verlag. http://site.ebrary.com/id/10231775. Ray, R. (2010). Supply Chain Management for Retailing. New Delhi, Tata McGraw-Hill Education Roberts, B. & Berg, N. (2012). Walmart: Key Insights and Practical Lessons from the Worlds Largest Retailer. London, Kogan Page. Savitt, R. "Time, Space, and Competition." Managerial & Decision Economics 7, no. 1 (March 1986): 11-18. Stalk, G., Evans, P & Shulman, L. (1992). Competing on Capabilities: The New Rules of Corporate Strategy. Harvard Business Review, March-April, pp. 57-69. Verbeke, A. (2013). International Business Strategy: Rethinking the Foundations of Global Corporate Success. Cambridge: Cambridge University Press. Wierenga, B. (2008). Handbook of Marketing Decision Models. New York, Springer. http://public.eblib.com/choice/publicfullrecord.aspx?p=364637. Read More