Strategic Capabilities to Gain a Market Competitive Advantage - Essay Example

? Full Paper Case Strategic capabilities are the core services and competencies that are essential for an organization to gain competitive advantage in the market. ‘Category Manager’ was the most significant addition to eBay as it directs the 23 major categories and 35,000 sub categories from all domains including jewellery, sports, watches and even jet planes. Moreover, in order to know the customers, feedbacks are free without the requirement of incentive as compare to other online websites offering referrals. The voice of the customer group of e Bay that is used for gathering customer input is not dependent on the web. Teleconferences are held for teaching the staff that facilitates the employees to increase their selling activities. E Bay shares a massive data of suppliers and customers on the site globally. As the information technology industry tends to modify itself due to technological developments, e Bay has successfully coped up by integrating technological advances. The differentiation factor is made necessary to put up a massive potential as it contains research and development. In order to cope up with the future development of e Bay’s strategic capabilities, the development of standards, software and protocols is required. Moreover, the development of strategic alliance is also essential. E-bay must dominate the technological advances and maintain current competencies as well as construct new ones. The hiring procedure must train and grant rewards for the best staff. 2 Case 2 The western countries associated with the beer brewing industry are languishing as compared to the East, where the brewing industry is rapidly increasing. As Europe has the largest demand for the brewing industry as well as figures of largest beer consumption per person. The figures for global beer production for the market are approx 2.5 million tons per year. As the beer industry and wine industry is increasing its revenues, the spirit industry is dilapidated. From the year 1993 to 1999, the figures for beer production has raised by 12 %. Moreover, the high beer consumption countries in Europe are Czechoslovakia, Ireland and Germany. However, there is a trend for developing flavored beers. These flavored drinks are popular among the teenage group as they consume flavored alcoholic soft drinks. Moreover, trends in the context of environmental issues consist of government involvement for beers come in bottles as government charge for cans. Furthermore, government is also trying to eliminate underage drinking that may cause violence. In addition, there are trends in terms of mergers of corporate organizations. For instance, GroIsh, Heineken, Interbrew, Scottish and Newcastle Interbrew should launch product development because the people are becoming more health conscious. A product launch named as a ‘low calorie beer’ will be a good option for the consumers. Heineken can expand the variety of flavored beers and low calorie beers in order to compete in an international market. They can gain the attention of young generations by merging with Pepsi or coca cola. In this way, both companies can boost their sales, as the strength of purchasing power will make an impact on a single brand with two manufacturers. Heineken can also participate in sports events by sponsoring athletes to gain exposure to the public. GroIsh have to advance their manufacturing process and equipments. Moreover, they must stop the methods for outsourcing in order to eliminate cost to improve the distribution and transportation processes. Scottish and Newcastle mush emphasize to deliver improved quality on the brand along with the inclusion of ingredients and advantages. They can spend on research and development for distribution and technology. 3 Case 3 The Virgin group is constructed on various mixtures of businesses. It has involved itself in every business i.e. around 00 businesses. The founder of Virgin was Sir Richard Branson who started it in 1970. The Virgin brand name was considered as the most essential asset of the organization. As Virgin is known as ‘customer champion’, it has provided wonders in public relations. Mr. Richard Branson implemented hands off policy to the management. By implementing this policy, managers are encouraged by their own policies. The freedom factor boosted responsibility and ownerships among the management to flourish their skills. The rationale of the Virgin group is to penetrate in to as many markets possible in order to expand the brand name at a low cost. However, before entering any market field, it is essential that it must be in a growing phase. The strategic relationships of all the business in the Virgin group are prioritized to a five-pillar system including Travelling, leisure, entertainment, mobile phones, personal finance and retailing. Boundaries were created for businesses for protecting the assets from mixing within other companies. If an organization becomes vast, it is broken down in to another new company. The Virgin Group provides value to its business as a corporate parent by: Understanding of institutionalized Markets Virgin brand name to overcome barriers to entry Limiting Risk in joint Ventures Management is not restricted Innovation Issues that are faced by the Virgin Group are: Virgin Atlantic airline industry that is proved dangerous by 2001 as the priority is given only on the profitable factors. Moreover, Virgin rail faced a massive issue of strategic rail authority review in 2000 due to its public nature. 4 Case 4 Madonna’s strategy from 1893 to 2010 was based on three routes. The first route includes no frills. The fourth route includes differentiation and the fifth route includes focused differentiation. The no frills strategy involves low price as well as low value. There was an opportunity for a new comer to use route one as a foundation to develop volume before moving forward. The differentiation strategy focused on products and services that provide benefits from the competitors and given importance from buyers globally. The focused differentiation strategy includes high benefits by justifying a constant price to a specific market. Moreover, the premium products were branded heavily and difficult to reproduce. The foundations for sustained success were the vision to rule the world along with through understanding of the customers and industry. The crew identifies leveraging competences and weaknesses. Moreover, the implementation of the brand was consistent along with renewing the brand. The sustainability of her success was threatened by the market acceptance. 5 Case 5 As per Johnson G./Scholes K./Whittington R in their book, “ExploringCorporate Strategy; 8th edition”, strategy is defined as “the direction and scope of an organization over the long-term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations”. The case study of Electrolux includes strategic issues such as Long-term direction of the organization, Scope of the organization activities, Gaining advantage over its competitors and Strategic fit with the business environment. As illustrated in the 2005 annual report, the scope was defined by Hans Stranberg as: Continuing to cut costs and drive out complexity in all aspects of operations Increasing the rate of product renewal based on consumer insight Increasing our investment in marketing, Building the Electrolux brand as the global leader in the industry Hans Straberg highlighted higher profits in the year 2006 in both North America and Europe. The reason for loosing advantage is due to the fast growing economies that forced them to specify building Electrolux products. The three strategic levels that can be identified at Electrolux are : Corporate strategy levels, Operational Levels Business Strategy levels The environmental factors are essential as they include a difficult political, social and technological work space. Organizations must construct their strategies according to the environment. The next factor is associated with the strategic capabilities of an organization. Strategic capabilities include factors such as weaknesses and strengths. The strategic choice for an organization in association with the issues can be viewed in the below mentioned five dimensions: Corporate Strategy, Business strategy, Corporate strategy, Entrepreneurship Organization The main issues about strategy in to action are to audit the implemented strategies in order to check their credibility and functionality. It is an essential step to review the strategic processes in the context of developments at Electrolux. The success factor includes the structure of an organization, relationships, processes and the communication between all these factors. 6 Case 6 The strategy of shifting the 2G technology to the 3G technology is constructed on the basis of a 3G business model. The 3G model is integrated with various services that can be supported. As the 3G carrier can provide enhanced data services, the implementation becomes complex. The 3G model is coping up with the 2G services and it remains the same, as various new business models needs integration with the legacy ‘voice telephony’ model. The 3G business model identifies two categories that can be provided by the mobile phone operator i.e. communication provider and a mobile exchange. Segmentation is an essential stage that forces the mobile phone operators to brainstorm. The base station of the customers must be categorized as sub groups that can be characterized by different requirements. As voice is the main component, tariffs must be offered by keeping in mind the affordability factor. The 3G network will encompass voice as the core element to protect revenues. A differentiation strategy is required between the operators and the competitors. Likewise, handset is a potential differentiation. There must be a fancy look to a phone rather than an executive style, as teenagers tends to grab attention to fancy phones. Moreover, a customer service is also a factor that can be included in the differentiation strategy. The strategy along with differentiation, segmentation is based on values of people. For instance, social factors are considered more and emphasize on advanced services is given less. As 3G carrier can provide enhanced data rates for internet connectivity. Differentiation strategy for an innovative product will be an automobile. Depending on the economic position of the country, groups can be allocated to launch an expensive product for people living in expensive areas of the country or a city. 7 Case 7 Only proximate followers that were the huge accounting firms merged with the New York firms. They had an ambition to construct legal practices globally as their accounting businesses. In 1990s, the over confident accounting giants thought that they could conquer the legal field by a glance with the help of their extensive global networks. They were not successful to overcome the multinational organizations, nor were they able to entice top lawyers to their firms. Law Firms constructed their international strategy to reach their international clients by expanding their firms. Moreover, the reason of expansion for the New York firms was the rising competition from the British firms. British firms build a consensus of not buying other firms. Instead, they have constructed an informal network, explained as non-exclusive referral relationships with the ‘best of the best’ firms around the world. An agreement must be made between all of them of not to compete in to each other’s home jurisdictions. Read More