Strategic Management - Strategy for a Business Undergoing Change - Essay Example

? MANAGEMENT STRATEGIES Strategy for a business undergoing change For the success of any business, a good business strategy has to be developed and implemented. Strategy involves a set of ideas done with a purpose of meeting the goals or objectives of a certain business. Porter generics strategy can be applied in a business that is undergoing an enormous change. It is done with a purpose of achieving competitive advantage. The business undergoing changes should differentiate their products and their services from their competitors by reducing costs so as to attract more customers ahead of their competitors. The company should use the generic strategies to achieve competitive advantage. These generic strategies include; differentiation, focus and cost leadership. Cost leadership strategy strongly emphasizes on working towards a goal of producing low priced products. Many people would be attracted to companies that offer lower prices for their services and products. For example, South West airlines have used this strategy, and the profits have grown immensely through application of cost leadership strategy. Differentiation strategy emphasizes on production of unique products and services that are better than their competitors and are valued more by customers. For a company that wants to make great changes, differentiations of their products is very important. Focus strategy means developing a certain market target. A focused strategy targets market segments which are less vulnerable to any substitutes or in situations where competition is weakest. This will enable a company to attain competitive advantage. For a business that is undergoing large change, marketing strategy implementation is also very important. A company may be undergoing a change like change of product, change of process; change of location change of product composition etc. customers may not be aware of these changes and may become reluctant to buy their products (Paley, 2006 pp.21). These changes may have a negative impact on the company if they do not follow well defined strategies. The initial purposes for change which in most cases are done with an aim of increasing profit may not be met if they are not well advertised. For example; a company may decide to change their products. When these products get to the market customers who are not aware of them may be reluctant to buy. Buyers have to be made aware of the products through good marketing strategy. They need to be made aware of the benefits of using the products. Advertisement is a good marketing strategy in the business set up undergoing massive change. Appealing means of capturing people to buy your product cannot be under weighed (Foxall, 2005).The advertisements should be made in such a way that it targets many people. For example; advertising in popular television and radio programs can capture millions of people. Similarly, advertisements can be done by use of large and attractive billboards in busy streets. For example; using a popular celebrity in your advertisement billboards can attract more attention. Good marketing strategy should be based on well developed ideas and well budgeted. It would require a good sum of money especially if large commercial advertisements have to be done. It should also ensure that the targeted population is reached. For example; a product that targets youth should have marketing strategies that adequately draw their attention more. Strategic management theory Strategic management is the approach and the process of pointing out the objectives of an organization and implementing policies that will ensure achievement of these objectives. In broad term, it can be seen as a combination of the formulation, implementation and evaluation of the strategy. Management theory provides a framework for knowledge organization. It also provides blueprint for actions that can guide organizations in achieving their objectives (Parnell, 2004 pp.34). Many managers rely on these contributions that were made by past industrialists. Scientific management was the starting point in which managerial aspects in an organization analyzes and practice in their daily running of their organizations. Management theories were developed with an aim of meeting the needs of organizations and companies. These strategic theories can be applied in all businesses that need to be competitive. Several approaches are used by managers in order to achieve their objectives following strategic theory approach. These theories are applied with an aim of maximizing profits in a business set up. Management theories include; agency theory, survival based theory, profit maximizing and competition based theories, human resource based theories and contingency based theories. Overreliance on this theory may render businesses less innovative. There is a need to go beyond this theory and come up with more innovative strategies. Businesses that solely rely on this theory may fail to come up with their innovations that would help them in realizing their profits. The world is changing very fast and new innovations are discovered every day. Businesses should be aware of this and should make efforts to be more competitive. Research should be done in extending the existing theory and attaining a competitive advantage. Businesses should realize that every business is fighting to maximize its profit and that they are doing anything possible to achieve this. They should strive to come up with more competitive means of achieving their goals. Managing knowledge Firms identify knowledge as a valuable asset that enables organizations to sustain a competitive advantage. The importance attached to knowledge has facilitated the need to manage knowledge. In today’s world, competition in a market depends on the knowledge applied by the organizations. Several economists believe that success in a business largely depends on the speed of knowledge generation and dissemination that cannot be copied by the competitors. Knowledge management has become important by organizations that seek to be competitive and beat out their rivals (Schnaars, 1998 pp.59). Some people however say that knowledge cannot be managed. It is impossible to know the knowledge one possesses and hence impossible to manage. These opposing people continue to say that knowledge is inside ones brain and that managing it would mean manipulating ones brain. The argument proposes that people are complex and the knowledge that they acquire will depend on the environment where one is being taught. Uptake of knowledge varies between individuals and managing it is impossible. On realization that knowledge cannot be directly managed, managing knowledge according to scientists is creating of good environments that create knowledge based activities. Although knowledge itself cannot be managed, knowledge based activities and processes can be managed. According to (Bartholomew, 2008 pp.66), the success of managing knowledge will depend on individuals who are engaged in knowledge based activities. Organizations can make management of knowledge happen up to a certain degree. The only thing organizations can do is create good environments that can facilitate knowledge. In order to create an environment in which knowledge can prosper, the right conditions have to be set in; good infrastructure, right leadership, common processes and many other proper conditions (Buckman, 2004 pp.11). Therefore, for effective management of knowledge, a satisfactory knowledge management system with a set of facilities that enhance knowledge development should be created. Changes in the management process, culture, infrastructure and other aspects of the organization should be enhanced for effective knowledge management. These changes cannot be immediate and different organizations change differently. Though knowledge cannot be directly managed, it is important to note that knowledge related activities can be managed. It is important to acknowledge that different organizations have different levels of knowledge maturity. Knowledge management should be seen as a system in the organization management and should be effected. Knowledge management can further be seen as applications of computer bases information systems and communication in support of management of the knowledge. It is thus important for organizations to realize and enhance knowledge management as it is a good tool for business development. The organizations should realize the importance of knowledge management in organizations management. References Bartholomew, D. 2008. Building on knowledge, developing, expertise, creativity and intellectual Capital in the construction professions. United Kingdom: Blackwell Publishing Limited. Buckman, R. H. 2004. Building a knowledge-driven organization. New York: McGraw-Hill. Foxall, G. R. 2005. Strategic marketing management. London: Croom Helm. Paley, N. 2006. The manager's guide to competitive marketing strategies. London: Thorogood Parnell, J. A. 2004. Strategic management: theory and practice. Cincinnati, OH, Atomic Dog Publishers. Schnaars, S. P. 1998. Marketing strategy: customers and competition. New York, Free Press. Read More