Competitive Strategies for Firms in Foreign Markets - Literature review Example

Strategic Management Every manufacturer and businessperson understands that the only way of growing the business is by allocating various avenues of growth for the business and its portfolio. Every company is looking to cut a name in the industry, making it the very best in accomplishing everything it desires within the targeted framework it set in place. Having such a good strategy to enable it capitalise on all it has in the industry is an issue that companies are grappling with as they seek to take advantage of the global market. This brings into focus some of the successful strategy builders such as conducting SWOT analysis, value-chain analysis, resources-based outlook and other strategic methods that will influence the organisational culture positively and within the shortest time possible. Having a competitive strategy is an important part of any business as it seeks to capture markets outside its locality and will define the level of growth attained in the region. Competitive strategies for firms in foreign markets Niche market exporting When creating a niche market, it is critical that the growth focuses solely on the specific product in production. However, global marketing has made it difficult to have a narrow view of the world, hence the need for increased output based on the ideals that define and take into consideration the expected growth in the foreign markets (Kiechel 2010: 56). To understand how this company will overcome its specificity in a single market, a new strategy has to be in place to improve on the sales as well as exports made within a particular period. The importance of strategy comes from the need to capture the market based on quality, pricing, marketing and implementation. To meet these goals, the business must look for the different avenues of applying growth in the targeted area, providing new customer base for the products (Christensen & Kaufman 2006: 155). To reach the consumer, the business can adapt several strategies that will cushion it against competitors in the industry. The waterfall model is one good example. This allows a niche market producer to export its products by following a sequential plan that allows the processes to follow each other successively. The goal is to create a product that can be sold to the external market by allowing the consumers to have a say in whatever is taking place at the organisation. The first step is to conceive the plan and understand the requirements for the project at hand (Christensen & Kaufman 2006: 157). This will imply having a good understanding of the market and the way to manoeuvre around it. Some of the international markets are intricate in nature and require a good understanding of the regulations, the consumer tastes and the national cultures that govern some of the activities taking place in the country. After understanding the country and its consumers, the next thing is to initiate a design and analyse how well it will fit into the country’s way of life. It has to fight of any competition and capture the market as planned (Schilling 2013: 129). The construction stage follows, which now actualises the plan in the new market by providing the details of these attributes to the market as a whole. The idea is to understand and estimate the new ways and models that will improve the consumers’ experiences and test it to ensure it fits in the business industry without failure. The production stage allows the company to implement its strategy across a bigger geographical area while at the same time creating a better means of capitalising on the successes while still at the market. This will then call for the maintenance, which requires the company to have different ways of solving any problems that may arise from the use of the product s well as maintain the numbers when it comes to sales and revenues (Christensen & Kaufman 2006: 159). As a niche market producer, it is important to understand that prices do not determine the success of niche products, but the demands the products solve will determine how far the product will go. If it can utilise the mechanisms in place, it will be easy to create and recreate the market needs and establish a better understanding the clients (Kiechel 2010: 59). The aim is to produce products that will market themselves while at the same time setting the company apart in its production system. The goal is to ensure that the prices offered will not affect the company negatively but will position it at a better place for greater revenue and profit. This will maintain its competitiveness and increase its market share, harnessing as much potential as it can based on its growth projections (Schilling 2013: 128). Licensing and contract manufacturing From both big and small companies, contract manufacturing plays a huge role in determining the strategies the companies will take to keep the fair share of the market share. The goal is to enhance the ideals of the organisation by estimating the needed attributes within the market based on the cutting of costs and outsourcing of business operations (Schilling 2013: 134). Manufacturing processes have become complex in the recent past, making it difficult to ascertain the next strategic platform that will improve the role of business in that area. The aim is to establish a new method that will include different partners who in various ways create and establish processes that enable the different companies to benefit from the outsourced deals (Kvint 2009: 109). The aim is to establish new ways of reinforcing the ideals of the organisation through strategic placements. The intricacy of the regulatory processes has also made many manufacturing companies to establish platforms that define the growing need for licensing and contracting other firms so as to benefit from an increased means of responsibly operating in new markets (Nag, Hambrick & Chen 2007: 936). Critics argue, however, that licensing and contracting business services is one of the major ways of entering foreign markets. This allows them to use the models in place to gain entry into the market and strategically position themselves based on the regulatory aspects of the organisation (Schilling 2013: 137). The aim is to get a company willing to collaborate with the foreign company and set up the means of achieving success through utilisation of the laid out procedures for the benefit of both parties (Kvint 2009: 110). The increasing number of customers targeted in the venture makes the partnership more worthwhile. The foreign company will also be bringing on board different skills important for the growth of the company under various attributes in the organisation (Amaral & Uzzi 2007: 1034). The goal is to create a platform that enables firms to benefit from the sales and take the risks together due to the impact that could be occasioned by the significant fluctuations involving business volumes (Kiechel 2010: 75). This is a good way of reducing completion and taking advantage of the available mechanisms to enhance the growth of the society based on the long-term goals of the organisation. As such, a good strategy defines and elucidates the importance of having good partners when making deals in any area of marketing. The strategy is to ensure the goals of the organisation are met within the prescribed timeframe, and contracting reduces costs and increases entry into new markets (Nag, Hambrick & Chen 2007: 940). Joint ventures A good way of getting into another country is by forming partnerships with resident companies. This allows the company to reduce its operational costs by leveraging on the facilities and infrastructures of the other company. It makes it easier to recreate its products and sell them in the new market without going through the regulatory processes of starting a new company (Amaral & Uzzi 2007: 1035). The goal is for the foreign company to identify a promising company to invest with and establish a new means of understanding the new market. This may imply transferring technology to improve on what is currently present, or utilise the skills present in the other company to improve on the skills within the company (Kiechel 2010: 89). This will call for more understanding of the knowledge management attributes that will assist in the improvement of performance while at the same time creating new strategies that will increase the role of the new company in the local market. The goal is to enhance the different attributes that will be essential for the capital-intensive industries to share the risks amongst the companies in the joint venture. It will also allow the foreign company to pool resources with a local company and effectively establish an economics of scale for its operations (Kvint 2009: 119: Schilling 2013: 140). Joint ventures will open up market access for the foreign company because it does not have the basic understanding of the customers and their way of doing things. The local company will compensate this. Funding and geographical constraints will also be dealt with here. Development costs could be deterring many companies from setting base in various countries, and having a company to form a joint venture with in the country will determine the greatest ability to deal with and find the right mix to promote the business (Schilling 2013: 142). Wholly owned subsidiaries A parent company with the resources enough to come up with subsidiaries can decide to use this as a strategic entry into a market. The goal is to ensure that the parent or holding company has the ability to meet the general costs of setting up in a new market, allowing it to maximize on revenues. The benefits of these attributes is to enhance the growing need for the diversification of certain divisions which could benefit the company more if they operated as separate entities. The goal is to establish a platform that gains the parent company more advantage in dealing with external attributes combined with the internal pressures of delivering quality (Schilling 2013: 150). This is a good strategy for the parent company because it allows them to take control of the service providers and the supply chains to gain advantage of the cut costs. This also makes it easy to deal with the vertical integration attribute that allows the parent company to place all the suppliers under a common owner. The diversification also spreads the risks and opens up new markets that will enhance the growing need for a new market niche (Schilling 2013: 153). Understanding one’s market allows the company to make better judgments and investments, which integrate the growing need for customer centric goods and services. It allows the company to maximise on its strengths and support the growing subsidiaries, and this creates a new way of establishing the ideals of the organisation as a whole (Sirmon, Hitt & Ireland 2007: 273). Company analysis Value chain analysis The goal of any company at the start is to make a major investment that will profit it in everything it does. The idea is to have a value chain attribute that will act as a system, with different subsystems to make it complete. When examining a company, there are processes that define and determine the way each attribute will operate. The main method of examination is to look critically at the primary activities that define the growing need for success (Christensen & Kaufman 2006: 160; Mitchell, Coles & Keane 2009: 45). These involve the inbound logistics regarding the movement of the input materials into the organisation, management of operations that allows them to convert raw materials into outputs, and the outbound logistics that define the information flows from the end of the production line to the end user (Sirmon, Hitt & Ireland 2007: 275). It will also create marketing and sales platform that define the communication, delivery and exchange of offerings for the value intended for the clients. It also has to deal with the increased understanding of how the service will operate effectively after being sold and delivered to a buyer. How seamless these processes are will determine the viability of investing in such a company (Mitchell, Coles & Keane 2009: 48). Another important avenue is examining the procurement aspects as well as the technological development that defines the equipment, hardware, software and procedures as well as the technical knowledge that is necessary. The aspect of human resource management is important especially given the impact it has on the development of the company and its profitability (Sirmon, Hitt & Ireland 2007: 278-9). Resource-based view The ideal means of dealing with the growth of the company is based primarily on the ability to evaluate a company based on the resources it possesses. This means understanding how valuable the resources are for the company to have a great value creation strategy and increase its viability, as well as how rare the resource is to leverage the company in a great manner (Hollensen 2014: 159). An in-imitable resource possessed by a company will make sure it increases its competitive advantage when it comes to the ideal production of the resources present. This advantage will make them the best in the industry and create a platform for them to launch even better products because there is nothing that can be done to reproduce their resources with the same level of preciseness (Schilling 2013: 403). This will define in better terms the ability to maximise on the capabilities possessed by the company and make better returns based on what one does with the resources provided. SWOT analysis The strategic initiatives of the company will depend on how well a company can manage its strengths, weaknesses, act on the resent opportunities and deal with the threats. The economic aspect of the society depends on the ability to utilise the growing need for the company to adapt to the growing markets and actualise its mandate in service delivery (Sirmon, Hitt & Ireland 2007: 280). The main idea is to create a means of designing products that are of high quality, and which define the growing need for the realisation of business strategies. The SWOT analysis is an important addition to the company and a good tool for the improvement of the operations in the company as it reveals the areas that require instant attention (Hollensen 2014: 164). The SWOT analysis also shows the various building blocks essential for the achievement of the targets set. This allows the company to insulate itself against any external threats and internal pressures that could be limiting its growth and development (Schilling 2013: 398-9). Organisation structures The first company I worked for had a functional structure. This structure grouped all divisions based on their purposes and ideals. Each of the group was meant to create the new methods of identifying the ability to deal with different issues. This level of departmentalisation allows the growth of the company to be based on individual efforts of each division rather than a common approach that would create a singular team to work towards meeting the goals of the organisation (Schilling 2013: 372). The ability to mitigate any risks from affecting the company and being dealt by a single division is a good way of doing business though it brings about unhealthy competition rather than uniting the whole company as one. This was a good moment to learn about the coordination and inter-departmental communication, which was very much present in meeting the ideals of the company (Hollensen 2014: 120). I learned about the need to use the available skills and capabilities for the sake of supporting the company and the employees. The other company I work for used the matrix system, which is a hybrid of the functional and divisional structures (Hollensen 2014: 122). I was able to get a variety of skills by leveraging on the skills I had learned at the other company and I could now recreate new avenues enabling me to understand the scope of a divisional structure within a company. This multinational company seemed to integrate the two functions well and maximise on the benefits of each function. However, I noted several challenges that could hinder the development of a company because of the lack of proper communication between the different levels of management. With the functional structure, the departments were created in terms of their purpose. In the divisional structure, each division has its processes, policies and objectives. The communication in the functional structure is quite good, while the divisional structure inhibits communication because the centralised form of administration disallows the communication between employees (Hollensen 2014: 125-6). However, for a multinational, mixing the two allows them to make good use of the growing attributes of the integrated working positions across the globe. The multinationals can benefit greatly from this because of the involved platforms in strategy management. Communication is present and each division has to meet its demands as expected. Post graduation job search In my postgraduate job search, I will use the core competency strategic model. The model talks about the ability to use a combination of different resources and skills to distinguish a firm in the marketplace (Kemp 2008: 19). My qualifications are the greatest resources I have and my experience shows the skills I possess. This allows me to be a good candidate for a company looking to recruit an all-rounded employee who can serve in different capacities within different divisions. I have the ability to attract the very best in the industry and use my knowledge to make significant contribution to enhance customer experience. I will work on being a unique brand with very little capability of being imitated, and this will be visible in my style of working. I have the requisite skills the employees are looking for and the delivery of the required tasks will be done in ample time. The ability to work under minimal supervision allows me to make a better employee who works based on intrinsic rather than extrinsic motivation. Though I also use the extrinsic motivation to make gains in my profession, the intrinsic motivation present allows me to make good use of the available resources and maximise the potential of making more profits for the company (Kemp 2008: 21-2). This increases my job satisfaction and my productivity. Conclusion The strategic placement of any company depends on the analysis conducted and based on the ability to have a unique placement attribute in the market. The goal is to enhance the company’s position and deal with different methods of ascertaining the growth opportunities present. The operations present are a determinant of the journey taken by the organisation to deal with issues as they occur. It is critical that the companies work on leveraging on their resources, skills and competencies because of the importance of attaining a better understanding of the services present. It is critical to note that production of different goods and services depends solely on the ability to maximise on the benefits expected from the customer and base the growth on the required goals and objectives. References Amaral, LAN & Uzzi, B. (2007) "Complex Systems—A New Paradigm for the Integrative Study of Management, Physical, and Technological Systems," Management Science, vol. 53, no. 7, pp. 1033–1035. Christensen, C.M. & Kaufman, S.P. (2006) Assessing Your Organisation’s Capabilities: Resources, Processes, and Priorities. Burgelman, R. A.; Christensen, C. M.; Wheelwright, S. C. (Eds.), Strategic management of technology and innovation. McGrawHill. Hollensen, S. (2014) Global marketing, Boston, MA: Pearson Kemp, R.L. (2008) Strategic planning for local government: a handbook for officials and citizens, Jefferson, NC: McFarland and Co., Inc. Kiechel, W. (2010) The Lords of strategy, Washington, D.C.: Harvard Business Press. Kvint, V. (2009) The global emerging market: strategic management and economics, New York: Routeledge Mitchell, J, Coles, C. & Keane, J. (2009) Upgrading along value chains: strategies for poverty reduction in Latin America, London: Overseas Development Institute Nag, R, Hambrick, D.C. & Chen, M.J. (2007) "What is strategic management, really? Inductive derivation of a consensus definition of the field", Strategic Management Journal vol. 28 no. 9, pp. 935–955. Schilling, M.A. (2013) Strategic management of technological innovation, New York, McGraw-Hill Education. Sirmon, D.G., Hitt, M.A., & Ireland, R.D. (2007) “Managing Firm Resources in Dynamic Environments to Create Value: Looking inside the Black Box,” The Academy of Management Review, vol. 32, no. 1, pp. 273-292. Read More