Making Sense of Strategy - Assignment Example

Making Sense of Strategy II Measures you would put in place to address each of the above four issues. (15x4= 60 Marks1000 words). The measures that I would put in place to address the issue of many business enterprises closing down would be focused on three bases: the government, enterprises and leadership. I would require the government of Oman to create an environment that promotes the establishment and sustainability of local business enterprises. Paul (2011) documents specialized factor creation as one of the critical ways through which the government could protect the sustainability of small enterprises in a country. Through specialised apprenticeship programs, private investment in companies and research efforts, the government of Oman would determine the best conditions for businesses to thrive. Application of findings from this would inform on appropriate enterprises to operate in the country. Business enterprises would be expected to come up with goals exhibiting commitment to the industry. The choice of place, promotion, product and price among these businesses, which are the four elements identified by Bressler (2012) as crucial in determining the success of businesses, must reflect their sustainability. This would ensure sustainable businesses operate in the country. Finally, the leadership of the small business enterprises should comprise of managers open to change and continuous innovation, appreciating the significance of Oman, their home country. These managers should prepare people in their organisations for continuous change for lasting growth and viability. They should involve the people in the change process, providing clear goals as advocated by Holbeche (2012). This way, the business enterprises would constantly adapt to change and attain sustainable competitive advantage thus lengthening their survival. To balance import and export trade, I would require the government to enforce export control measures to limit the goods shipped across the borders of Oman. According to Paul (2011), this would insulate the domestic economy from excessive foreign demand. Additionally, implementing protectionism strategy by raising tariffs and quotas on imports would make imports more expensive than locally produced goods as documented by Ma and Lu (2011). This could be coupled with subsidies for locally produced goods making them less costly as compared to imported commodities. This would reduce the purchasing power of the market for imports as demand for locally produced goods increase and restoring the import-export balance. The local companies in Oman should seek to promote innovation. Smit (2010) argues that innovation causes organisations to produce better quality products that meet the changing consumer demands, which they understand better than their foreign counterparts. Consumer will hence seek more for locally-produced goods as they meet their needs as opposed to imports. Furthermore, for prosperity, countries should only specialise in goods and services for which they have cost advantage in comparison to other countries and import those for which they have cost disadvantage. By enterprises in Oman focusing on products for which they have cost advantage in producing, they will realise a cost advantage which would make their product more competitive with regards to cost. This will reduce on imports as consumers demand more of local products. The rate of unemployment could have risen as a result of lack of employment opportunities or as a result of mismatch between the labour market skills and industry requirements. As such, the first strategy would be to create an environment for business enterprises to flourish and create greater capacity for employment. The government should, therefore, avail the needed factors of production to make this happen. Specifically, the government would have to ensure the adequacy of what Porter categorises as physical resources and infrastructure among the traditional factors of production as documented by Smit (2010). The government would have to make land for setting up business enterprises available and ensure that appropriate infrastructure such as power sources and transport systems are efficient enough to support the establishment and prosperity of business operations. This would in turn provide dependable sources of employment to the labour market in Oman. Business owners and managers would be required to develop policies that favour employment of people from Oman. This follows the argument by Holbeche (2012) that goals of owners and managers of organisations are critical in organisational structure. Making recruitment from local labour market an organisational objective would improve employment rates in Oman. In the same way, human resource has to be aligned to the market demand. According to Bressler (2012), the direction in which the labour market deploys its skills is important in employment. Therefore, learning institutions should adequately prepare students to meet the demands of business enterprises. It would also be important to share information which points to the available job opportunities in Oman, a crucial factor in the labour market as noted by Hussain, UlHaq, Anjum and Usman (2014). Such information would cause the people of Oman to take up courses that meet what its market demands thus improving their employability. The decrease in tenure of MNCs could be as a result of insufficient resources, shrinking market or unhealthy competition. The government of Oman would be required to put in place legislation to protect the interest of MNCs. After all, MNCs elicit competition among local enterprises causing them to be innovative and attain competitive advantage (Sweeney & McFarlin 2015). The government could therefore consider giving them subsidies or giving them favourable tax rates and tariffs that would make the market rewarding. It should ensure that factors of production are adequate enough to attract and sustain international enterprises. Such include the raw materials for which they trade in and land among others. In case of inadequacy, the government should reduce the tariffs on importation of such missing resources which Shenkar, Luo and Chi (2015) observe would reduce the cost of raw materials, making the market remain viable for MNCs. This way, MNCs will operate longer in Oman. Finally, diversification among the MNCs needs to be promoted. The reason for the decreasing tenure could be because of the exhaustion of the main business attraction to Oman by MNCs. Hill, Jones and Schilling (2015) describe diversification as involving new missions and products to a firm. It would therefore be beneficial if MNCs diversify as it would open up unexploited markets thus creating new markets that would make businesses sustainable. In fact, by diversification, MNCs are able to create related and support clusters as documented by Smit (2010) which would support their production efforts. 2. Critically compare and contrast any MNC organization and corporate parent organization in your country based on their structure and strategy adopted by each of them. (40 marks 500 words). Coca Cola is chosen as the MNC in Oman which will be compared to its corporate parent located in Atlanta, Georgia. From the account given by Coca Cola Company (2015), the first Coca Cola refreshment was created in May 1886 by a pharmacist, John Stith Pemberton, aimed at imparting stamina and good health. Over time, Coca Cola has adopted international strategies which makes the brand image identifiable and instils local practices which promote the creation and embracement of cultural differences (Banutu-Gomez 2012). Today, Coca Cola has over 450 brands selling in over 200 countries, rated among the most acknowledged brands globally (Hassan, Amos & Abubakar 2014). With its presence in Oman, a comparison of its operations in this region as compared to the corporate parent in Atlanta, Georgia would be beneficial in making sense of strategy. The parent Coca Cola Company promotes market penetration strategy by learning customer needs unique to a market and adopting its strategies to enhance consumption of its products through respective franchises. In fact, Dransfield (2004) notes that Coca Cola has adopted a structure to gain control of the market by adopting low cost distribution networks. Thus, Coca Cola has outsourced the distribution of its products to its distribution companies which distribute canned and bottled beverages from the bottling plants to the respective distribution centres and to final retail outlets. Coca Cola Oman has also adopted a similar structure by appointing local distributors such as Al Ahlia Gulf Line and Al-Taher to distribute its products from the bottling plants to various retail outlets across the country as documented by the Coca Cola Company (2015). This follows the fact that these distributors understand the local customers, government regulations, charities, entrepreneurs and other organisations which fosters the strategy of Coca Cola to sell more. The distributors also understand the advertising strategies that would best sell in the market Coca Cola Company invests in brand recognition through charity sponsorship. It aligns itself with properties which embody the experience of the brand including football, holidays, food and music (Donovan 2014). It is against this strategy that the company has sponsored various events at home including the Major League Soccer and U.S. Soccer as reported by Novy-Williams (2015). This has been replicated in Oman where Coca Cola sponsors the Copa Coca-Cola Grassroots Program targeting teens under 15 as documented by Coca Cola Company (2015). The football tournament brings together 34 teams from Oman to compete for a position to participate in Copa Finals. This provides an opportunity for Coca Cola to sell its products to the stakeholders. However, while the strategy that Coca Cola has adopted in the parent company has enabled it post incredible performance in Oman, it remains unpopular at home. Americans prefer Pepsi over Coke (Banutu-Gomez 2012). As such, instead of market penetration growth, the company appreciates this shortcoming and has adopted defensive strategies in its local market to retain the existing customers and maintain their consumption. Since the influence of Coca Cola parent company on Coca Cola Oman has elicited better performance that it could achieve if it remained independent, its MNC strategies could be said to be effective and should be upheld. References Banutu-Gomez, MB 2012, ‘Coca-Cola: International business strategy for globalization,’ International Trade & Academic Research Conference, vol. 3, no. 1, pp. 155 – 169. Bressler, MS 2012, ‘How small businesses master the art of competition through superior competitive advantage’, Journal of Management and Marketing Research, vol. 11, no.1, pp. 1 – 12. Coca Cola Company 2015, Open Happiness, viewed 21 April 2015 http://www.coca-cola.com/om/ Donovan, T 2014, Fizz: how soda shook up the world, Chicago Review Press, Chicago, IL. Dransfield, R, Fox, E, Guy, P, Needham, D & Wilde, J 2004, Business for Foundation degrees and Higher Awards, Heinemann Educational Publishers, Oxford, OX. Hassan, DN, Amos, AA & Abubakar, OA 2014, ‘An evaluation of marketing strategies undertaken by Coca Cola Company as a Multinational Corporation in Nigeria,’ IOSR Journal of Economics and Finance, vol. 3, no. 2, pp. 5 – 10. Hill, C, Jones, G & Schilling, M 2015, Strategic management: theory, 11th edn, Cengage Learning, Stamford, CT. Holbeche, L 2012, The high performance organisation, 2nd edn, Elsevier Butterworth-Heinemann, Oxford, OX. Hussain, N, UlHaq, MA, Anjum, ZZ & Usman, M 2014, ‘Flexible working: increasing labour supply and employment’, International Journal of Economics, Commerce and Management, vol. 2, no. 5, 38 – 48. Ma, J & Lu, Y 2011, ‘Free trade or protection: a literature review on trade barriers,’ Research in World Economy, vol. 2, no. 1, pp. 69 – 76. Novy-Williams, E 2015, ‘MLS, U.S. Soccer sign four-year sponsorship deal with Coca-Cola’, Bloomberg Business, April 13, viewed 21 April 2015 http://www.bloomberg.com/ Paul, J 2011, International business, 5th edn, PHI Learning, New Delhi. Shenkar, O, Luo, Y & Chi, T 2015, International business, 3rd edn, Routledge, New York, NY. Smit, AJ 2010, ‘The competitive advantage of nations: is Porter’s Diamond Framework a new theory that explains the international competitiveness of countries?’ Southern African Business Review, vol. 14, no. 1, 105 - 131. Sweeney, PD & McFarlin, DB 2015, International management: strategic opportunities and cultural challenges, 5th edn, Routledge, Oxon, OX. Read More