Organizational Strategic Planning - DVALOP Company - Case Study Example

Organizational Strategic Planning Name: Course: Tutor: Institution: Date: Introduction As already established by the global changing market structures, operational structures in these markets have significantly change. In this regard, the global business platform has evolved over the years to incorporate the new structures and trends. On such area of increased business and industry changes is in the concept of international and foreign markets. Over the years, the foreign market has increased in popularity leading to increased multinational organizations spread and expansion in such foreign markets (Barrow, 1996, p.443). However, the spread of this approach in business environment has increased the relative concept of business competition. Technological developments and globalization has enabled the development and expansion of business organizations both local and international. As such, the global platform remains highly competitive. In order to enhance increased market presence and competitive sustainability, organizations have resulted to increased adoption of strategic approaches in the market. This incorporates the development and adoption of unique strategic approaches facilitating increased organizational success (Osgood, 2004, p.106). In my working experience, I have evidenced my employer organization employ such approaches. This essay is a review of the approaches adopted by the DVALOP Company in its quest to retain and attain an increased market presence and competitiveness on the global platform. Moreover, the essay evaluates instances at which the current strategies may grow irrelevant and subsequently develop strategic alternatives in the market. Efficiency Enhancement Approaches The DVALOP Company has over the years sought to venture in the global electronics industry. On this case, the organization has gradually and continuously adopted supportive strategies that enhance increased market performance in the industry. As such, the organization employs the concept of continuous improvements. Gleich, Motwani and Wald (2008, p.243) developed a study to evaluate the concept of continuous improvement in organizations. The study established that the market faces increased success by organizations adopting this strategic approach. As such, it argued that the continuous improvement process allows the respective organizations to develop the appropriate strategic frameworks to support their eventual success. Therefore, the study argued that the adoption of the continuous improvement process is not a strategy approach itself but a supportive framework for the development of other strategic approaches in the market. Similarly, the DVALOP Company has over the years employed this strategy in a bid to increase the overall organizational performance. Through its continuous development process, the organization developed two strategic approaches namely the pricing and the work based incentives. The application of these approaches has led to the organizational increased success in both the local and international markets. This essay section reviews these strategies and their implications on the overall organizational performance and eventual success. Price Discrimination Strategy Basuchoudhary, Metcalf, Pommerenke, Reiley, Rojas, Rostek, Stodder (2008) conducted a study to evaluate the implications of an organizations prices in the overall industry functioning. In this case, the study evaluated the implications of price on the law of demand and supply. In its analysis, the study established that prices in the market implicate on the functioning of the market equilibrium. On one hand, high prices increase organizational desire to supply products in the market as the sale of each product unit increases the overall marginal profitability levels. In this case, high prices lead to increased supply. However, this results to decreasing consumer demands. As such, high prices decrease the ability by consumers to purchase products .With constant earnings in the market consumer base consumption ability decreases. Therefore, this lowers average organizational profits. On the contrary, reduced prices increase consumers’ purchasing power thus increasing overall purchase and the overall profitability levels. In recognition of these theoretical arguments, DVALOP Company employed the pricing strategy approach in enhancing increased market success. In this case, the organization based its strategy development on the recognition that pricing and its acceptance is based on a range of external factors. McAdam and Henderson (2004, p.53) conducted a study to evaluate the external factors influencing pricing acceptance and the eventual consumer buying behaviour and the decision making process. In its analysis, the study established that the earning levels in an economy have an influence in the market price acceptance levels in an economy. For a population with improved standards of living and increased market earning levels, the market is willing and able to purchase products with high prices. On the other hand, markets with reduced earnings levels, the consumer base would be attracted to reduced priced products. An additional evaluation on the factors influencing prices acceptance strategies in an organization was evaluated in the case of market competitiveness. To this effect, Mild and Taudes (2007, p.315) conducted an evaluation study, to investigate implications of price changes in competitive and non competitive markets. On one hand, for a competitive market, the consumers negatively respond to price increments. As such, such increments lead to consumer loyalty shifting onto alternative substitute products. On the other hand, the non competitive markets lack alternative products and thus their demand remains relatively static. As such, despite the increment the consumers retain their purchases for lack of alternative strategic options (Nguyen, 2007, p.299). The DVALOP Company recognized this concept and as a result employed the pricing approach in the market. As such, the organization adopted the price discrimination approach. In its implementation of this approach, the organization segmented the market into respective segments. In its segmentation process, the organization applied the earnings and standard levels in the market. Moreover, the market segmentation process was bas on the nature and competitive levels in the market. Through this approach, the organization segmented its markets respectively allowing for price discrimination. As such, for the markets with high income levels and reduced competition, the organization charged high market prices. Such prices allowed for increased market profit margins increase. On the other hand, the organization charges low prices for the markets with reduced earnings as well as those highly competitive. Profitability in these market segments is based on the concept of quantity sale. Although the profit margins obtained per unit are low, volume sales increases the overall market profitability. The adoption of this approach has enabled the DVALOP Company attain two key strategic objectives namely increased profitability and market influence. Through the adoption of a combination of these approaches, the organization has established a stable financial stability levels in the industry as well as enabling it attain increased market control and consumer loyalty, a valuable aspect in enhancing organizational competitiveness sustainability. Human Resource Asset Development Organizational industrial performance is based on the presence of sufficient organizational resources. John, Awino, Pokhariyal and Beatrice (2013, p.451) in an evaluation of organizational resources definition, established that organizational resources were both tangible and intangible. In this regard, the study established that the tangible organizational resources include organizational equipments, financial resources as well as the human resources. On the other hand, the intangible organizational resources include identity, reputation and brand name. Arguments have been developed on the concept of organizational resource base development as a strategic expansion market tool. In this case, organizations in the market have increased the overall utilization of the respective resources to enhance their performance in respective industries. Karjalainen (2010, p.101) argued that organizational resources serve as unique selling points to the consumers as well as investors in the market. This is because for peers and competitors in the market to emulate and attain these resource levels, they require huge investments applied in the long run. Therefore, the application of organizational resources’ as their strategic market competitive edges is a sustainable competitiveness. Curado (2006) conducted a study to evaluate the application of organizational resources as a market competitive edge. Under this approach, the study evaluated the merits of organizational resource base adoption in developing market competitiveness. The analysis established that organizations applying this approach gained not only market competitiveness, but also relatively high competitive edge sustainability levels. Therefore, the study recommended the adoption of these approaches. Further, Rant and Rozman (2008, p.91) evaluated the contribution of a workforce as an organizational resource and its implication on the overall organizational success levels. Under this study, the authors evaluated the concept of human resource contribution to organizational success. The study established that the recruitment, retention and development of a qualified and experienced human resource workforce increased the overall organizational performance levels. Therefore, the study concluded that through the adoption of HR as a strategic expansion tool enhances organizational competitiveness through increased market quality services. In recognition of these issues in the market, the DVALOP Company applied the human resource management as a strategic resource in enhancing its increased strategic performance. In this regard, the organization sought to establish a framework for increasing the overall employees’ productivity. In this case, the organization sought to establish an increased framework for motivating its employees. As such, the organization developed an elaborate motivation strategy through the development of appropriate incentives in the market. One such approach was the establishment of performance based payment approach. Through the application of the performance based payment approach, the organization motivated its employees to strategically increase their performance and productivity levels. Studies conducted in the market have confirmed the theoretical argument that performance based approach increases the market overall productivity. One such confirmatory studies can be cited in the case of Hussey, Sorbero, Mehrotra, Liu and Damberg (2009, p.1407) study. The study established that the adoption of this approach motivates employees to increase their productivity through increased earnings. As such, the study established that the system allows for increased employee performance with increased working conditions in the market. Therefore, the adoption of this approach by the DVALOP Company increased the organizational performance. As a result, the organization becomes increasingly competitive and attractive to potential workforce. Therefore, the organization has over the years recruited a qualified and highly experienced workforce. Thus, this has enabled it develop a reputation for quality as the employees produce quality products as services, based on their qualifications and experience. Further, the organizational employees are increasingly productive. Under this approach, the employee unit output is significantly increased. This allows for reduced cost of production. Therefore, the adoption of this approach is a supportive strategy to the organizational price discrimination approach especially the low cost approach to market segments with low earning levels (Fitzgerald, 1991). Although the DVALOP Company has applied an increased number of strategic alternatives in its expansion strategy, the above analyzed two, the price discrimination and resource based approaches respectively are the dominant models. Therefore, this analysis single out the two as the basic approaches for expansion adopted by the organization. A review of these strategies, based on the overall continues improvement process increases the organizational strategic influence in the electronics industry, Systems evaluation Strategies Evaluation Despite the fact that the discussed strategies adopted by the DVALOP Company have earned it increased market success and competitiveness, it is imperative to evaluate their sustainability levels. On one hand is the price discrimination approach, where diverse market segments are charged varying prices for similar products. Although the strategy works perfectly in the current global market setting, international market forecasted changes negate its existence and success. With increased technology growth and free international trade, the global market is bound to establish a balance. As such, Scott (2001) argued that the markets will attain average development levels and allow for increased consumer knowledge, enough purchasing power as well as competition. As a result of this, all markets under the expected global perfect competition structure. Therefore, it will be impossible for the organization to retain segment markets based on competition of earnings level. Thus, at such an economic and market performance level, the strategy will be irrelevant to the organizational expansion strategic aim. On the other hand, the performance based approach is currently working to the advantage of the organization as it motivates employees to work hard and increase their ultimate productivity levels. However, this will not be applicable in the long run. The system is a form of financial reward on the employees’ performance. Therefore, the organization employs increased financial rewards on its workforce in order to stimulate their increased performance. This follows the Maslow’s hierarchy of needs motivation theory (Razafindrambinina and Kariodimedjo, 2011, p.4). The theory held that satisfaction of employees’ needs categorized into five stages the physical, safety, social, esteem and self actualization. The theory argued that employee needs changed up the ladder as each needs level was successfully met. Therefore, although physical needs such as financial Rewards would motivate employees in the short run, the employees’ physical needs are met and therefore the same rewards fail to motivate them in the long run. This is the impending scenario for the DVALOP Company strategic expansion platform. Based on the Maslow’s theory, the strategic approach will grow irrelevant once the organizational employees shift from the physical needs level to the safety level. Strategic Alternatives Based on the above critical analysis on the organizational expansion strategies, it is apparent that the organizational strategies risk failure in the long run. In this case, it is imperative for the DVALOP Company management to establish a framework through which the organization can facilitate its long term operational success on. As such, this essay recommends two strategic approaches to this challenge. Human Resource Development Currently, the organization applies a resource based approach through which it motivates its human resource based on performance rewards. With the realization that this strategy is unviable in the long run, this essay develops an alternative to it through human resource development. Evaluated theoretical and empirical studies in this essay reveal that the adoption of organizational resources enables organizations develops sustainable market competitiveness. Further, organizational evaluation on DVALOP Company establishes that with its performance based approach, the organization has attracted an increased large pool of qualified workforce. Therefore, it is apparent that the organization has the required workforce capacity. Developing this workforce would include allowing the employees advance their career academic qualifications (Gleich, Motwani and Wald, 2008, p.243). Further, it incorporates the enhancement of career development through organizational facilitated or sponsored workshops and seminars. Moreover, motivational aspects such as promotions and recognition, in addition with other non financial rewards, serve as imperative HR development enhancement tools. Ho, Li-Hsing and Chen-Chia Chuang (2006, p.169) argued that organizations that develop their employees workforce appropriately increase their overall success rates and market competitiveness through performance and quality guarantees in the long run. Therefore, upon the application of this approach, DVALOP Company is bound to increase its overall market competitiveness in the long run. Quality Management Systems The DVALOP Company serves in the highly competitive and sensitive electronics industry. As such, quality is of paramount relevance in order to develop and retain strategic market influence. Currently, the organization uses the price discrimination approach to venture into this market. However, this approach faces strategic long term challenges as well as increased cost of production challenges. As such, it is imperative for the organization to adopt an alternative strategy to this. Such a strategy is quality management systems. Currently, organizational quality is based on the acquired raw materials and employees efficiency in the production process. However, this should not be the case. The industry has increased competition as well as consumers’ knowledge. As such, consumers demand for high quality products that reflect value for their money. Quality production can be facilitated through the adoption of approaches such as the six sigma production approach adoption. Ho, Li-Hsing and Chen-Chia Chuang, (2006) argued that the adoption of this approach will benefit the organization on two fronts. On one hand, products quality will be enhanced through reduced defective products. As such, this will reduce on the production costs on production waste products. On the other hand, the adoption will serve as a marketing tool to influence the consumers’ perception of the organization and its subsequent market reputation. In summary, the adoption of six sigma quality control system, the organization will increase both its tangible and non tangible assets in the market in the long run. Conclusion In summary, this essay evaluates the strategic performance approaches adopted by DVALOP Company, serving in the global electronics industry. An evaluation on this organization’s strategies establishes that strategically, the organization adopts a continuous improvement approach where it reviews its strategies regularly to refine and improve them. Strategically, the essay establishes that the organization employees’ price discrimination and performance based payments as the key performance enhancement strategies. On one hand, the essay establishes that in order to facilitate successful price discrimination strategy application, the organization segments is consumer based on their earnings and market competitiveness levels. As such it charges high and low prices for markets with high earnings and low earning levels respectively. Further, the essay establishes that in its performance based approach, the organization has gained increased attractiveness that has facilitated its acquisition and retention of qualified workforce. However, an evaluation of the strategies application in the long run, establishes that both strategies risk growing irrelevant in the long run. On one hand, the price discrimination approach will be irrelevant once the global market attains a perfect market structure. On the other hand, the performance based payment approach will be irrelevant once employees needs shift from the physical to safety level. Based on this analysis, the essay develops strategic recommendations for the organization namely human resource development and the adoption of total quality management systems. This essay concludes that with the implementation of the proposed strategies, DVALOP Company will increase its market competitive sustainability in the long run. References Barrow, C.W. 1996, 'The strategy of selective excellence: Redesigning higher education for global competition in a postindustrial society. In: Higher Education, 41, Kluwer Academic Publishers, Netherlands, pp. 447-469. 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