Impact of High-Performance Work Systems on Individual and Organizational Performance - Literature review Example

IN WEEKS 1 TO 11 E-LEARNING MATERIAL By (Name) Course title Name of tutor Institution name Department Date of Submission In Weeks 1 to 11 e-Learning Material Week 1: Competitive Strategy It is not enough to just have any strategy. The strategy depends on the context, the environment in which an organization operates. Porter (1980) writes: “The essence of formulating competitive strategy is relating a company to its environment” (3). In this particular regard- and in all cases for that matter- strategy involves beating the competition. The intensity of competition depends on Porter’s 5 Forces: supplier power, customer power, rivals, threat of new entrants and threat of substitutes. To beat competition, an organization should ensure a collective strength in all these areas. To do this, an organization should offer what customers do not find elsewhere. That is what sets the services and/or products apart giving the organization a competitive edge over other companies. Blackberry, for example, has failed in the smartphone market because it has failed to take into serious consideration these factors. Having led the way in the smartphone market, Blackberry failed to anticipate the rise of rivals and substitutes and take the appropriate measures. Even now, Blackberry’s competitive advantage in the smartphone market has been high security and has, consequently, relied too much on the government and corporates segment. But it is possible for its competition to replicate this high security and enter this segment (Randhawa et al 2009; Cheng 2013). Blackberry should, therefore, pursue other avenues of competitive advantage and target other segments. Week 2: Market Entry The need for a sound and effective market entry decision is a vital part of global strategy. This decision influence the organization’s decisions on marketing mix. In making market entry decisions, organizations should consider the market targeted; the goals of that target market; the mode of entry; when (that is time of entry); plan for marketing mix; and a system of control to check performance in the markets entered. But these are not easily arrived-at decisions. Selecting the target market, for example, involves collecting data on what markets and/or segments offer best opportunities for growth. Decisions on mode of entry involve considerations of market size and potential growth, risks, related government regulations, local infrastructure and competition. Indeed, every organization seeks new markets and targets new segments for growth. Therefore, it is only possible to research and anticipate the potential for growth. These involves taking a holistic view of the potentially new target market, examining the interrelatedness of micro- and macros-environmental factors and how they might help or hurt the market entry. Blackberry should look beyond the government and corporate markets (dependent on the high security of its devices) and target markets (looking for other features). But the company must conduct proper market research and make the right decisions. Week 3: Porter’s 5 Forces of Strategy According to Porter, as shown in the week 1 discussion, there are five forces that influence competition: supplier power, customer power, established rivals, new entrants and substitutes. Suppliers can constrain profits by charging higher prices. Organizations should neutralize supplier power to be able to dictate its wishes and have it. Customers can force prices down by forcing rivals to war. An organization should seek to offer varied services and/or products to make it hard for customers to leave. Offering products and/or services that are distinct from the rivals enhances competitive advantage. Elevating fixed costs of competing (such as increasing expenditures in Research and Development) scares off new entrants. Finally, offering better service and/or product value through wider accessibility limits the threat of substitutes (Porter 2008). Blackberry failed to consider opportunities in the smartphone market and, as a result, left a platform for new entrants. The smartphone market is now highly saturated. Still, there are a number of opportunities to exploit, such as emerging markets (Cheng 2013). The company should invest more in R&D to develop varied products and services. It should seek to build new platforms of competitive advantages. The company must also invest in marketing and increase its brand visibility and presence to newer customers. Week 4: SWOT Analysis as Part of Strategy For a business to create an effective strategy, it must know its surrounding environment, both internal and external elements that define hat context. This is where SWOT analysis plays a key role, providing a framework for what Porter (1980) refers to as ‘the structural analysis of industries’. SWOT is an acronym for Strength, Weakness, Opportunities and Threats. The first two elements (strengths and weakness) are internal factors and the last two (opportunities and threats) have to do with the external factors. Ultimately, SWOT analysis involves looking at the interrelatedness of these factors. In this respect, SWOT analysis is an effective tool for analyzing and understanding of environmental data and information and in what ways an organization can use this information to define and achieve its strategy. In relation to Blackberry, the company’s key strength is the high security that its smartphones offer. However, its main weakness is its over-reliance on the government and corporate segment (Cheng 2013). To enhance its growth, the company should look for new opportunities in the smartphone market (including the almost-guaranteed expansion of the smartphone market especially in the emerging markets) and find ways to exploit them, such as through R&D. But this should be accompanied by efforts to overcome threats related to Porter’s 5 Forces. This would constitute a vital part of Blackberry’s corporate strategy. Week 5: Ansoff Matrix and Product Life Cycle Ansoff matrix is a vital framework for market entry. This matrix, in this regard, emphasizes four main strategies: market penetration; market development; product development (product life cycle) and diversification. Market penetration aims towards enhancing a quick entry into a market. This involves increasing advertisement and sales people to increase sales, accompanied by competitive pricing and discounting, among others. This can also be done through initiatives to increase usage. This strategy works for new entrants looking to beat established rivals. Market development happens once a product is known in the market and can be done through the introduction of new sales and channels of distribution as well through strategic partnership with established businesses. Product development focuses on customer retention. Essentially, Ansoff’s matrix aids the analysis of the potential of each of the strategies mentioned in relation to the product life cycle (that is, whether the organization is entering a new or an existing market) (Hassan 2006). Blackberry’s strategy in its efforts towards expanding its market base would vary depending on what market it focuses on. For example, the company has a fairly good brand presence in the US. Its market expansion strategy would therefore involve market and product development as well as diversification. Market penetration would perhaps be advisable in new markets or whether it is promoting new products. Week 6: Blue Ocean Competing in overcrowded markets does no god for an organization’s high performance goals, neither does it sustain such performance. Real opportunity, therefore, is in less crowded markets, the ‘blue oceans’ (contrasted from ‘red oceans’, which are the high-competition markets). But these markets are not obvious, otherwise everyone would be there. Organizations must, therefore, take radical steps to attain this goal. In this regard, the Blue Ocean strategy calls for the need to create new uncontested markets and, ultimately, make competition irrelevant. This follows in the frame of what Kahane (2012) refers to transformative scenario planning (discussed better under Week 11 below). The blue ocean strategy is about smart competition, which involves giving customers what the rivals do not. Blackberry very much needs that. Blackberry should not compete Samsung and Apple directly to gain new markets. It should curve its own niche and exploit it. The high security feature for its smartphones has worked well for the company. But it has been losing out in other areas. But entering looking to compete equally with its peers does not mean doing it their way. Blackberry must do it its own way. Week 7: Diversification as a Strategy Diversification is also a key factor in the growth and progress of the organization. There are two perspectives here. First, there is the diversification of products and services (which translates to expansion into diverse market). But the path to achieving this involves the diversification of the workforce, which opens up the capacity to enter newer markets, including minority markets. IBM’s initiative to diversify its workforce, for example, dramatically expanded its presence in the minority markets (Thomas 2004). The diversification of products and/or services captures a wider market. It makes it hard for customers to leave because they have a wide range of choices. Diversification of the workforce brings about a varied pool of talent and experience, which can provide great opportunities and insight into how to enter new markets. In this regard, diversification is a vital ingredient of long-term organizational goals and objectives. Blackberry, for instance, should diversify its product range if it is to reach new smartphone markets. That means offering products that sell on the basis of other features other than just security. This would make it possible for Blackberry to target other segments other than just its current focus on governments and corporate personalities and institutions. Week 8: Corporate Strategy Corporate strategy refers to the organization’s overall long-term goals and objectives. Corporate strategy is accompanied by strategic direction and objectives. These are expressed in the organization’s mission and vision statements. Viardot (2004) argues that the mission statement seeks to provide answers regarding the organization’s business and what it should be in the future. In this regard, when formulating mission statement, the organization considers five factors: the current business, the customers, what it is the customers value the most, the current position/situation of the business, and what it must do to create value of its customers. Ultimately, the mission statement is articulated in the vision statement; that is, long-term strategic intent and aspirations. Indeed, there is always a lot to do in management. But no organization can do everything. In fact, no organization should try to do that. Besides, the environment in which the organization operates plays a key role in determining what it can or cannot do. The context not only influences what the organization should not do, but also, perhaps most importantly, what it should do, owing to the opportunities and its strengths (that is, its capacity to exploit such opportunities). Blackberry has largely failed in the smartphone market. As it were, the company does not have any known mission or vision. Having been a pioneer in smartphones market, Blackberry failed to take a holistic view of the environment (including the rise of potential competition). In the end, it failed to exploit the opportunities in the market and has since been surpassed by Samsung and Apple (Randhawa et al 2009; Cheng 2013). To compete effectively, the first thing Blackberry should do is go back to the drawing board and draw a new all-encompassing corporate strategy. Week 11: Scenario Development and Planning Scenario development and planning is a vital tool for strategic planning. Scenario development involves sketching a picture of the market situation, including the interrelatedness and impact of micro- and macro-environmental factors. But it is not enough to create such a picture. To ensure validity of that picture, that sketch is reviewed, challenged and expanded where appropriate. Scenario planning now involves looking for ways of dealing with the developed scenario: addressing the obstacles to the organization’s strategic plan and the exploiting the opportunities cited (Harris 2013). In a number of ways, therefore, scenario planning is very much like SWOT analysis. It is a learning process, utilizing modeling and research. However, scenario planning is not about accepting thing as they are, but also changing “unacceptable, unstable or unsustainable” (Kahane 2012, 19) situations and make them work for the organization. Kahane (2012) calls this ‘transformative scenario planning’. Blackberry needs transformative scenario planning to get into the market and exploit the opportunities. The company needs to reframe its strategic plan. The current plan exposes it to too much to competitive vulnerabilities. The high security feature can be copied soon. Plus, the competing companies are already encroaching into the government and corporate segment. Through transformative planning, the company must understand the diversity of customers in the smartphone market and seek alternatives (that is, what other competitive advantage strategies it can adopt to gain new markets). Bibliography Cheng, R 2013, How BlackBerry is fixing its once 'broken' brand, CNET. Retrieved http://www.cnet.com/news/how-blackberry-is-fixing-its-once-broken-brand/ (Accessed 30 August 2014) Harris, G 2013, ‘A continuous-learning process that updates and enhances planning scenarios.’ Strategy & Leadership, vol.41, no.3: pp.42-49 Hassan, MS 2006, Strategic marketing. Thesis for Master of Business Administration, University of Leicester Kahane, A 2012, ‘Transformative scenario planning: changing the future by exploring alternatives.’ Strategy & Leadership, vol.40, no.5: pp.19-23 Porter, ME 1980, Competitive strategy: techniques for analyzing industries and competitors. New York: Free Press Porter, ME 2008, “The five competitive forces that shape strategy.” Harvard Business Review, no. R0801E: pp.1-18 Randhawa, L, Lin, E, Duong, T, Korotana, D, Colusso, N & Dall’Antonia, M 2009, Blackberry’s rise in brand power: the dueling marketing strategies of RIM versus Apple. Retrieved http://zenportfolios.com/lavreet-randhawa/files/2009/11/Marketing-Case-Study-RIM-vs-Apple.pdf (Accessed 30 August 2014) Thomas, D 2004, “Diversity as strategy.” Harvard Business Review: pp.1-11 Viardot, E 2004, Successful marketing strategies for high-tech firms, 3rd Edition. Boston: Artech House Read More