Competitive Strategy, Reinventing Business Model - Assignment Example

ADDITIONAL QUESTIONS by Student’s Name Course’s Name Professor’s Name University’s Name City, State Date of submission Additional Questions Q1. Competitive strategy Strategy is the processing of creating unique and valuable position involving a set of activities. The sources of the strategic position are; serving different customers with new needs, serving few customers but with broad needs and serving many customers with broad needs but in a narrow market. Since some competitions are incompatible, the strategy involves making trade-offs in a competing market. Additionally, the strategy requires a company to create “fit” in its activities. Fit it the way company’s activities interact and support each other. Fit ensure competitiveness and sustainability. Furthermore, the strategy requires an effective leader since leadership and strategy are linked inextricably. Strategy creates unique activities. The competitive strategy involves doing things different from the rest of the competitors. It involves deliberately choosing different methods of conducting activities to deliver unique values. When companies achieve the strategy of doing things differently and create unique products or services, they perceive new position in the market thus attracting customers. New position created by the strategy creates new customers, new demand, new distribution channel, new information system and new purchase occasions arise. The strategy does not only ensure unique deliveries but also ensure that a company is competitive in any market. Competitive strategy is a method of creating new ideas, products, and services. In turn, this creates new customers, demands, market environment and different distribution channels. Therefore companies that use the competitive strategy over time are assured high growth and significant profit over a sustainable period. Competitive strategy is hence a financial strategy to ensure profitability. A balance score card can be applied to the model: the objective is creating new market space so as to create demands thus make profits. The matrices are set to measure the profits produced and demand created by the strategy. The strategy may be significant for only those companies that are not rigid and those that encourage innovation. Coming up with the idea that will create new products, ideas, and services space will require a lot of creativity and flexible management. Furthermore, research indicates that the competitive strategy only enjoys the market for only 15 years. At the beginning of the strategy, things work as planned but as times goes by there are be pressure from an increase in customers demand, the entrance of other competitors after realizing the new market as well as changes in operation strategies in the company. The business will sometimes be forced to alter its operations which may affect customers negatively pushing them away. Q2. Reinventing business model The innovation of business models have reshaped industries and have enabled companies to generate millions of dollars as well as the addition of values in companies. Despite the fruits of business model innovations, very few senior managers or companies do not take the advantage that comes with the innovation. The reason for this is because the managers or companies know very little about the dynamics and processes of business model development. Secondly, it is only a few businesses that understand their existing business model. An innovative business model should have customer value proposition (CVP), have a profit formula, have key resources and key processes. A new business model is needed when significant changes are needed in all the four elements of a business model; customer value proposition (CVP), profit formula, key resources and key processes. In a competitive environment, the new business model will attract a large group of customers that are always shut out in the current market because the existing solutions are expensive, utilizing new technology, bringing a job-to-be-done in reality, fend-off low-end disruption and respond to shifting biases in the competition. Reinventing occurs by looking at the existing business model and finding whether it is focused on the four vital elements. If the existing model does not, a new model is required to change the industry or market given making profits. Making profit is the blueprint of the new model. Profit making and business model are interchangeable. How the company makes money is a piece of the model. The new business model starts by setting the price required to deliver customer value proposition. This assists in finding what whether the scale and velocity of resources achieve desired profits. The balanced scorecard is aimed at creating a anew industry and market. The matrices used by finding whether customers are satisfied and whether the new model is making significant profits. The measure used to find out whether the objectives are achieved is looking checking whether the four elements are working together to conduct activities in an effective manner. New business model is a good strategy to improve the performance of any business. The new business model looks at important elements that are vital to perforce of the company; customer value proposition (CVP), have a profit formula, key resources, and key processes. I believe that new business models can be effective in fulfilling potent value proposition as well as making significant profits. Q3. Mapping strategy The strategy map is a description of the desired revenue growth, targeted market, value proposition, role of innovation and the investment that may be required to ensure growth of a project. The map also indicates the cause and effects of given problem, specific improvement thus creating revenue. The essence of a strategy map is to help organizations describe and illustrate the objectives, targets, initiatives and measuring the performance. In the competing business world, managers and business persons have strategies on how to improve the business, how to improve in profit or increase customer base and much more. When top executive tries to explain the strategy to the employees, they may leave important points, or the employees may not understand what is required of them. Without clear and detailed information, companies fail in their strategies. This is why strategy map comes in to communicate the strategy and systems that will be used to implement it. Traditionally most companies depended on the transformation of raw materials into finished products (tangible goods). Today companies do not necessary depend on raw materials (tangible), but they also use intangible materials. Therefore the strategy can be reinvented when making strategies for intangible materials. Most strategies start with financial strategies to increase the stakeholders’ value. There are two important bases for financial strategies; productivity and revenue growth. The financial perceptive of the strategic map, therefore, describes how a company can grow its financial base by introducing a new product, new market and improving the value of customers. In productivity, the company can reduce direct and indirect expenses, using assets more sufficiently and reducing the working and fixed capital. All these functions are aimed at increasing profit but at the same time ensuring customer services are maintained or improved as well. The key importance of having the strategy map is to have everyone on board in implementing strategies in the organization. Also, it ensures that the strategies are made to be understood by everyone involved. The strategy also advocates for innovation and creativity to satisfy customers and stakeholders. It does not only look at the current position of the organization but also predicts the future and keeps the stakeholders prepared. I feel that the strategy is excellent to use in any field of business. Q4. Sustainable competitive stability Sustainable competitive stability is the idea of reading and acting on signals o change. In the current world, businesses are faced with complex problems such as change of weather, globalization, child labor and greenhouse effects. A company can be at the top of competitive environment on a day but on the following day it falls and starts chasing the others. In such a case, businesses need to apply sustainable competitive stability strategies. To use the model, companies will need to apply four capabilities to attain adaptive advantages. They are; ability to read and act on signs, the ability to experiment, ability to manage multi-company systems and ability to mobilize. The strategy is useful in the competing world because it can be used to help businesses remain stable. Most businesses operate in the unpredictable environment. For instance, any company can be attacked by terrorists bringing it to zero and making it drop its performance. The strategy can be combined with other models since it advocates for sustainability in performance. It can be used in all businesses that operate in unstable or environments that are not predictive. Finically, it is difficult to predict how the market will be in future. If companies can predict any chances of downfall, measured can be put in place to mitigate them. The sustainable competitive stability strategy uses four abilities to have adaptability advantage. Once a company has adaptability advantage, it is also to remain stable and make profits as usual. Using the balanced scorecard, the objectives of the strategy would be ensuring that a company remains stable and productive. The matrices would be checking the profit generated, how competitive the company is and its customer base. If the company can read and act on signs, the ability to experiment, ability to manage multi-company systems and ability to mobilize then to use has the advantage of adaptability. As much as the strategy is aimed at ensuring that a company remains stable and productive in the unpredictable environment, it ignores to recognize that there are factors that cannot be predicted or even prevented. Factors to do with natural phenomena are hard to predict or prevent. For instance, in the case of an earthquake heating a given location where the business is situated, it will go down regarding perforce. If the competitors are not hit by the effects, it will mean that the competitors continue to prosper as the company goes down. Read More