Competitive Strategies Applied by Growing Businesses - Research Proposal Example

Competitive Strategies Applied by Growing Businesses By student’s Name Institution Course Prof Name 1.0 Introduction The growth and survival of any business today depend on the selection and adoption of competitive strategies. Excellent performance may be realized in a competitive business environment only if a firm pursues the appropriate strategies. This study, therefore, aims at determining the competitive strategies applied by an instant growing business to achieve competitive advantage. The study variables include first, cost leadership strategy, where firms sell goods at a lower cost while targeting broad market. Lower cost structure may be achieved by reducing the cost of production, low priced raw material purchase and use of cheaper labor. Secondly, differentiation strategy where firms offer value added product services to its customers. Lastly, focus strategy where firm targets specific market to meet the customers need and preference hence develop customer loyalty. This study will utilize descriptive research design because Saunder et al., (2009) says that descriptive research design portrays an accurate profile of situation. It offers to the researcher a described relevant aspect of the phenomena as well as presents data in a meaningful form that help researchers to understand characteristic of a group in a given situation. The data collection methods that will be utilized include both the structured and unstructured questionnaires that will be posted to different respondents. The questionnaires will be complemented by interview which will gather more information about the topic. 1.2 Statement of the problem In the last two decades, there has been huge growth in both small and medium businesses in various main towns and its surrounding. The increasing population, change in consumer preferences, improved purchasing power, increased local production and manufacturing of goods and services are some of the factors affecting the business sub-sector. According to Miner and Appleton (2008), this trend is expected to increase further as innovation and entrepreneurial is being encouraged in the society and hence result to intense competition. How to survive in the present changing competitive environment remains a key question for many ventures. Therefore, this study seeks to evaluate competitive strategies applied by instantly growing business to gain competitive advantage in the dynamic business environment. 1.3 Research Questions What are the various strategies applied by instantly growing business in the market? How have those competitive strategy given instant growing business a competitive advantage? 1.4 Significance of the study The results of this study will be useful to the following group of people: policy makers and government, management team and researchers. First, to the policy makers and government the results will provide insight on how small business competes to survive. The government will be able to know which growth to support for general economic development of a country. Secondly, to management team, the results of the study will enable them be aware of the key strategy to formulate and implement in their business venture to enable them remain competitive. Finally, to researchers, the results of the study will enable them to use it as a reference guide while carrying a research on related topic. 2.0 literatures Review This chapter presents a review of some of the studies that have been undertaken in the past related to this study. They include; theoretical literature review, empirical literature review and conceptual framework. 2.1 Theoretical literature review This involves theories and models as well as government Act that explain more about competitive strategies applied by instantly growing businesses to gain competitive advantage. The work of John and Scholes, (2011) on resources based view paves ways for studies on competitive strategies firms adopt to gain competitive advantage. They argue that competitive advantage occurs when a firm implements a value adding strategy which other current, existing and potential firms are not implementing. Firm’s resource plays a crucial role in the growth of a business since they are the key determinant to its success and sustainability. They further add that firm resources compose of both the intangible and tangible assets which are used by the firm to implement its competitive strategies such as price, product and place strategies. Businesses with these resources are able to surpass those without the resources because they are rare and in exploitable by other businesses. In addition, a business may enhance its competitive advantage and performance by implementing and controlling its key resources by developing a unique strategy hence making it difficult for its competitors to challenge the business. Valuable resources enable businesses to formulate and implement strategies that contribute to low net cost and increased net profit of the business. They argue that competitive advantage may be gained when a firm is able to economically generate high valued goods which their counterparts cannot be able to imitate and identify source of the benefit. This is because different firms possess different bundles of resources due to factor immobility across firms’ hence intense competition. Based on resource based view theory, competitive advantage exists when businesses in a given industry are not able to duplicate products of their counterparts. 2.2 Empirical framework These are content written by researchers considering critical points of current knowledge including essential findings and procedural contributions to the production areas. It indicates what these researchers did, the methodologies applied and their findings. 2.2.1 Competitive strategies John and Scholes, (2011) defined competitive advantage as the center on which any business unit may gain competitive advantage in its industry. This may be through provision of customer needs and wants more efficiently and effectively than their counterparts and in ways it is difficult for them to imitate. A business competitive strategy entails of its initiatives to attract customers and achieve its objectives as well as to strengthen its position in the market. It therefore entails how a business competes in a given market. 2.2.2 Generic strategies Every firm should aim at developing unique capacities and competences which their competitors lack. Generic strategies therefore are main ideas a firm may best compete in in an industry. According to (Porter, 2010), he analyzed three dimensions that a business can pursue to achieve competitive advantage. These include; focus strategy, differentiation strategy and cost leadership strategy. He further argued that competition arise due to firm possessing the same products, selling at same price and targeting general consumers. A cost leadership strategy is one which a firm target broad spectrum of customer in a market with a product which is produced at low cost. Cost advantage may be acquired by firms through maximum outsourcing, purchasing low cost materials and through vertical integration. Differentiation strategy is one which firm targets a broad market with products that have unique features (Porter, 2010). The unique feature portrayed by the product dictate a premium price which covers the cost of adding the unique feature. This strategy emphasizes on brand image, reliable distribution networks, proprietary technology and quality services among others. Focus strategy involves a firm targeting its product to a specific segment of customers in a market. It can be either low cost focus strategy or differentiation focus strategy. Therefore the firm serves the identified segment more efficiently and effectively than its counterparts. This results to a firm having power over its buyer since it might be the only firm supplying. Buyers have low bargaining power resulting to a competitive advantage over other firms. Threat of new entry is protected through customer loyalty developed between a business and its customers. To gain competitive advantage, a firm must adopt only one of the three strategies (Porter, 2010) 2.3 Conceptual framework Independent variables dependent variables Figure 2.1 conceptual framework 3.0 Methodology This chapter provides the methodology that was used in the study. It includes the research design, population, and data collection procedure and data analysis. 3.1 Research design Descriptive research design will be employed to study the research problem with the aid of a case study. Case studies are suitable because it gives in-depth information on competitive strategies they adopt to gain competitive advantage. 3.2 Population The target population will be entire emerging small and medium business in the country. A census survey will be conducted to the entire management of this business. A census survey involves collection of data from the entire population of interest. This method is reliable since information obtained reflects the real situation on the ground about the topic of interest. 3.3 Data collection This study will utilize primary data with the main tool of data collection being questionnaires which will contain both structured and unstructured questions. A pretest will be carried on selected non-household. The objective of pretesting is to allow correction of mistakes, evaluating the relevance of a given question, add relevant information, exclude irrelevant information and make overall improvement on the standard of the questionnaire in line with the objectives of the study. After the pre-test, the questionnaire will be modified and used in face-to-face interviews to the target population. The questionnaires are a convenient method of collecting data as it is easier for clarifications to be sought where necessary hence more accurate data can be collected. 3.4 Data analysis Descriptive statistics will be employed to analyze data as data collected will be mainly quantitative in nature. Questionnaires will be checked for completeness, consistency of all entries checked and coding will be done before analyzing data. The study findings will be presented and analyzed by use of mean scores, tables, percentages and frequency tables. References John, A., & Scholes, P., 2011, Business Strategies for Small and Growing Business Organization. New Delhi: Response Books. Miner, J. T., & Appleton, L., 2008, Proposal planning & writing. Westport, Conn: Greenwood Press. Porter, T., 2010, Proven proposal strategies to win more business. Chicago, IL: Upstart Pub. Co. Saunder et al., (2009) The McGraw-Hill handbook of more business letters. New York: McGraw-Hill. Read More