The Value Chain and Competitive Advantage - Case Study Example

Section A B. Examine how choices about which activities a company chooses to carry out within the value chain can help companies achieve competitive advantage. In most cases, the activities of a company are specifically meant to create value chain so that it can be in a better position to gain competitive advantage. Essentially, customers are interested in deriving value from the products and services they purchase for final consumption. This can only be possible if the products are valuable to the consumers. An effective strategy that can be implemented in order to attain this feat is the use of value chain analysis. This concept is discussed below to illustrate how value chain can help the company gain competitive advantage through the use of the case of Whole Foods Market. Dahl (2010) posits to the effect that many decisions made by the company are meant to give it competitive advantage so that it can operate viably. This notion is supported by Arline (2015) who states that; “Value chain analysis relies on the basic economic principle of advantage — companies are best served by operating in sectors where they have a relative productive advantage compared to their competitors.” In this case, a company chooses to pursue activities that will give it a competitive advantage through taking into consideration aspects such as product design, marketing and distribution, all which fall under the ambit of value chain analysis. Indeed, the company should set precedence in determining the strategies that can be implemented in order for it to create and sustain a value chain that in turn can also sustain its operations in the long run. For instance, Whole Foods Market has managed to achieve competitive advantage through leveraging on its value chain specifically designed to offer organic food products to the customers. As people become conscious about their health, this strategy has helped the company to gain competitive advantage as the customers switch to organic foods. The strength of the company lies in its capability to differentiate the products it offers to the customers. There are other competitors emerging in the organic foods sector but according to Whole Foods Market’s official website, the company has managed to gain a significant market share by virtue of maintaining a unique value chain that is characterise by quality organic products. Its products also have premium prices that are specifically meant to denote quality. Over and above, it can be seen that value chain analysis is a very influential strategic decision making tool that can be implemented in the operations of the company in order for it to gain competitive advantage. The case of Whole Foods Market helps to illustrate that value chain analysis is indeed a viable strategy that can give the company competitive advantage. This company has managed to maintain a large market share in the organic foods industry as a result of its ability to maintain an effective value chain in its operations. Quality products are prioritized throughout the entire supply chain and the customers are satisfied by the products and services they get from the company. Section B C. Analyze how uncertainty influences strategic decision-making. Use examples and cases to support your arguments. Organizations operate in a dynamic environment that is often characterised by unprecedented changes. There are certain unknown conditions that can impact on the operations of the organization. However, this cannot stop business from operating if a holistic approach is taken and effective strategies implemented. As such, this paper seeks to discuss how uncertainty influences strategic decision making. Some businesses often encounter challenges with regard to attainment of the desired goals and objectives as a result of uncertain environment in which they operate. According to Courtney, Kirkland and Viguerie (2015), uncertainty can help in influencing strategic decision making through development of multiple scenarios. The first thing is to read the future and determine the uncertainties that exist in the market. In case of investment, the managers can bet big, hedge or wait and see (Courtney, Kirkland and Viguerie, 2015). Each scenario has got its own advantages and disadvantages in some cases. Therefore, after scrutinizing the scenarios available, a meaningful decision can be made. According to Merchant (2008), a good strategy is derived from the situation obtaining in the environment in which the organization operates. It is essential for the responsible authorities to scan the market and identify possible threats and opportunities that exist. From this assessment, the organization becomes acquainted with the industry and is in a better position to decide strategies that can be implemented. A good example can be drawn from the case of Kodak. For a long period since its inception, Kodak has been a leading giant in the physical film business. However, due to tremendous technological developments, the company has been facing viability challenges. Due to the emergence of digital technology, pictures and images can now be stored as soft copies using computer technology. According to Trifilova (2013), Kodak has been facing uncertainties following the disappearance of the physical film business. At one point, the company filed for bankruptcy in 20011. However, the company has harnessed digital technology through massive investment and it has managed to gain a significant market share. As of 2010, about 75% of the company’s revenue came from digital product lines involving business to business market. This uncertain development in the industry sector has helped the company to come up with an effective strategy that has helped it to turn around its fortunes. It can be noted that in most cases, uncertainty can influence strategic decision making in business. It is imperative for the company to scan the environment and get to terms with the situation taking place. In the event that uncertain conditions exist in the environment, then the managers can design their strategies based on this particular scenario existing in the market. As illustrated using the case of Kodak, it can be seen that to a larger extent, uncertainty can influence strategic business decision making and this can also significantly turn around the fortunes of the company. Therefore, the success or failure of the organization operating under uncertain conditions mainly depends on the strategies implemented. References Akbar, Y.H. (n.d). Understanding Dynamic Strategies: Strategic Posture. HULT International Business School. Arline, K. (January 26, 2015). “What is a Value Chain Analysis?” Retrieved from: http://www.businessnewsdaily.com/5678-value-chain-analysis.html Courtney, H., Kirkland, J. & Viguerie, P. (2015). “Strategy under uncertainty.” Harvard Business Review. Courtney, H., Lovallo, D & Clarke, C. (2014). Deciding How to Decide: A tool kit for executives making high-risk strategic bets. Harvard Business Review. Dahl, H. (February 25, 2010). “How to Develop a Business Growth Strategy.” Retrieved from: http://www.inc.com/guides/small-business-growth-strategies.html IBM (2015). “Searching for competitive advantage? It’s in the clouds.” Retrieved from: http://www.ibm.com/smarterplanet/us/en/centerforappliedinsights/article/globalcloud.html Merchant, N. (September 11, 2008). “5 Structural Elements of Strategy.” Retrieved from: http://www.entrepreneur.com/article/196932 Trifilova, A. (2013). “Leveraging knowledge assets to create new innovation space within Kodak.” Retrieved from: http://www.innovation-portal.info/wp-content/uploads/JB-KodakMay21.pdf Whole Foods Market (2015). Retrieved from: http://www.wholefoodsmarket.com/ Read More