Strategic Management of the Benihana of Tokyo - Case Study Example

STRATEGIC MANAGEMENT Student’s name Course &Code Professor’s name University City Date Strategic Management Strategic management refers to all the processes involved in control of organizational processes through leadership and administration processes (Slack, 2013). This management, Foss & Knudsen (2013) postulates, involves various aspects of strategic planning and implementation of strategic plans by firms with the aim of improving their operational outcome and market performance. Improvements in this case would be determined by positive returns on income and increased levels of competitive advantage that allow the firm to strongly participate in the market. Achieving strategic management incorporates various strategic measures that are key in the attainment of organizational goals. Such strategies, according to Harrison & John (2013), include; identification of challenges and opportunity, controlling organizational changes, effective handling of the operational environments and management of knowledge, resources, risk and outcome, managing competition among other things. This prospective paper, analyses two case studies with the aim of providing insights into strategic management practice as used by the Benihana of Tokyo and Barrick Gold Corporation. Notably, various differences in strategic management may occur as a result of difference in organizational management and different industrial operations of the companies, with the Benihana of Tokyo categorized under the hospitality industry and Barrick Gold Corporation, the mining industry. Case Studies Summary The Benihana of Tokyo case study examines the development of the Benihana of Tokyo from the inception stage until the later developments into restaurant chains. Notably, the study ventures into identification and explanation of management strategies employed by Hiroaki Aoki, the CEO, in establishing a successful Japanese restaurant in a foreign country, the US. On the other hand, the Barrick Gold Corporation case study, deals with the developments of the Barrick Gold Corporation in the Pascua Lama Project. The study examines the various challenges facing the corporation as a result of various external influences such as political and public resistance to the project. It furthers focuses on the strategies used by the company in countering these challenges with the aim of improving their outcome and market performance. Using these two contrasting studies; one seemingly noting strategic management practice in a more positive environment as in the Benihana of Tokyo and the other in a rather harsh environment as in Barrick Golf Corporation, management strategies are clearly exemplified. Competition In business operations, market competition is inevitable (Goetsch & Davis, 2014). As such, most companies strategize on measures to gain competitive advantages in order to effectively compete with their peers in highly competitive markets. One such strategy is in attracting customer preferences and loyalty through service and product quality ( Hubbard, Rice & Galvin, 2014; Stead & Stead, 2015). I determining the profitability potentials of companies, the five forces model analytical tool is helpful. This tool is founded on the principles of the Porter’s Five forces analysis that analyses the suppliers bargaining power, buyers bargaining power, industrial rivalry, substitute products threats and potential new entrants threats. All these forces, in effect, are considered influential in the competitive industrial performance (Hill, Jones & Schilling, 2014). As such, strategic considerations of the forces are imperative in designing management strategies for effective market performance. In the Benihana of Tokyo case, for example, the buyers have a high bargaining power due to the high number of restaurants. Additionally, the suppliers also have a high buying power due to the quality demands. There being several hotels, restaurants and fast foods services, the firm faces strong competition from its peers in the industry, hence, strong industrial rivalry. Specializing in a unique style of meal preparation and focusing on it as their core value reduces the substitute products threat. However, with new hotels and restaurant cropping up at a faster rate despite the high capital investment and production costs, the threat of new entrants is high. Considering these factors, Benihana of Tokyo operates in a highly competitive business environment. As such, various strategies in management would be essential in building and sustaining competitive advantage. Strategically, the firm relies on specific suppliers who deliver quality products through which they use to prepare quality meals for the consumers. Additionally, having conducted an indepth study of the American food behaviour, the Benihana of Tokyo specialized in the Tappenyaki table style of cooking to attract more customers who have a preference of watching their food prepared in the styles of their choice. As a result, the Benihana of Tokyo has attained market success, taking a very short time to break even and continue generating profits, with the overall success being measured in the increasing chain size. Business Environments In business operations, the internal and external business environments are key in the delivering of positive outcome. Effective management of both the environments goes a long way into improving market performances. The internal environment, in effect, refers to the immediate environment within the firm’s inside operations that implicate on performance (Clark, 2012; Witcher & Chau, 2014). These include the management roles, workers interactions, assets and resources available among other things necessary in the attainment of the organizational goals. On the other hand, the external environment includes various external factors that either directly or indirectly implicate on the organizations market performance such as the market trends, competition, political effects, public attitudes, environmental effects among various other aspects. In achieving market success, strategic management of all these factors is tantamount (Fisher & Oberholzer-Gee, 2013; Hitt, Ireland & Hoskisson, 2012). In the Barrick Gold Corporation Pascua Lama case study, the company, despite the high demand for gold that would significantly increase the profits, faces massive challenges as a result of external pressures. Due to evident environmental degradation as a result of the industrial operations of the company in Pascua Lama, the project faces massive rejection by the general public and the governments of both Argentina and Chile, affected by the operations. However, strategic management of the operations of the project is handy in countering these effects. The company ventured in infrastructurally developing the surrounding regions by building of roads, hospitals and various social amenities. Additionally, the Barrick Gold Corporation Management conducted various environmental impact assessments with the aim of reducing the environmental impacts of the operations. As such, these efforts strategically reduced the external pressures in form of political and public opposition to the projects operations. Consequently, the company improved its market performance and competition levels. Above Average Returns Models In any business operations, control and management of risks is essential in improving the operational outcomes and firm’s profitability levels (Hubbard, Rice & Galvin, 2014). While this risks, may present various uncertainties to the investors, Dess & Lumpkin (2013) argue, risks are controlling in the formulation of management strategies. Most importantly, controlling risk is imperative in the attainment of above average returns. (Andre., et al, 2012) define above average returns as excess returns expected by investors after investing with similar risk amounts. Two main ways could be used in achieving above average returns. These are the cost leadership strategy and the differentiation strategy (Mintzberg & Lampel, 2012). In practice, the Benihana of Tokyo uses both strategies by relying on low but quality supplies hence cutting down on production cost and using a special Benihana style of cooking and Tappenyaki table which are unique strategies of attracting customer advantage. On the other hand, while Barrick Gold Corporation has high production costs, its differentiation strategy in service and products grants the company competitive advantage in the mining industry. In understanding the models of above average returns, the resource based model and the I/O model are useful. Whereas the resource based model stipulates the organizational use of available resources and capabilities in achieving above average returns, the I/O model emphasizes on the effective external environment study as foundation for identification of attractive industrial opportunity and implementation of strategy (Lasserre, 2012). Considering the case studies, the Benihana of Tokyo and Barrick Gold Corporation management use both the resource based model and the I/O model in achieving above average returns in their operations. Benihana of Tokyo, for instance ventured into the study of American food behaviour hence indentifying the opportunity and strategic style to use in the restaurant business. On the other hand, Barrick Gold’s research exploitations and environmental impact assessments enable the company to identify potential project locations and effectively operate within public expectations. Both companies rely on their resources and capabilities in form of available assets, knowledge and expert skills in achieving their organizational goals. Conclusion Conclusively, strategic management is essential in contributing to positive outcome in business operations. Various management strategies are employed by different companies with the aim of achieving their operational goals and objectives. Most importantly, management strategies in businesses are designed to enhance achievement of positive return on income by minimizing production cost and maximizing benefits. Different firms however may have different strategies in management due to variations in target markets and operational environments (Wheelen & Hunger, 2011). Implementation of strategic management measures is effective in achieving of organizational goals. In these plans, companies endeavour to use the available resources and capabilities to control the operational environments with the aim of being highly competitive. Reference List Andrews, R., Boyne, G. A., Law, J., & Walker, R. M. (2012). Strategic management and public service performance (pp. 1-232). Palgrave Macmillan. Clarke, S. (2012). Information systems strategic management: an integrated approach. routledge. Dess, G. G., & Lumpkin, G. T. (2013). Strategic Management Creating Competitive Advantages (Vol. 261). 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