Organization Strategy for a Business - Essay Example

First Organization strategies Organization strategy is a broad based procedure for how business is going to be competes, what goals it should have, and what policies will be needed to carry out these goals. The real meaning of formulating competitive strategy is relating a company to its environment. It is a constant process within an organization; the people responsible for the success of strategic planning outline the preferred future, then devise a strategy for making it happen. The nature of strategic plan is adaptive and the devisor is always raising it to be relevant for the future. Key environmental factors are predicted and their influence on the organization looked at and then optimum measures are taken so the organization can benefit from these environmental factors (Mintzberg 1976). Strategy looks at long-term direction and guides short term plans. It is understood at the top and middle levels of the organization. A strategy is as such clear that there is no way delicate. The results are defined; this is involved with the translation of strategies in to realities of the organizational structure, operations, policies and products. This in essence closes the gap between the companies' current position and where it would like to be. At last significant matters are identified and prioritized. Outcomes are positive statements of the changes the company needs to make to it and the results that it must carry out in its environment to fulfill strategic requirements. Outcomes are the steps for an organization towards strategic closure. Discussion Organization strategic plans are in general prepared of many interconnected elements; Vision, mission, Values, assessment, goals/objectives, strategy and outcomes. They have also major role in integration of strategic management principles and models. A feasible example of a strategic plan follows: The Vision gives a proposal about the objectives of the organization and broadly capture future services, markets and structures but do not go in to great detail. The Mission statement delineates customers, competitors and markets. It demonstrate a preferred location in a predicted future world" and a "bulls eye or target of the strategy."A mission should not consign a firm to what it must do in order to survive but what it chooses to do in order to thrive. Values are what the company believes to be true; values offer guides for staff on how to act within the company and ethical standards for all the stakeholders. Values set the company independently from its competitors and show the reliability of the organization. Measurements of the organization are the external and the internal forces, which will affect the company in making its mission and vision successful. These can be carried out in an environmental scan, which includes the following components; 1. Internal analysis of the firm 2. Analysis of the firm's industry (task environment) External macro environment (PEST analysis) A SWOT (Strengths/Weaknesses/ Opportunities/Threats) task can also capture the overviews of a business. Outside factors can vary from economic condition to changing technology and competition and are shown as threats and weaknesses. Inside factors can be anything which may belong from assets to liabilities and are usually shown as threats and weaknesses. Then the transition to the future is assessed with regard to industry and competitive environment, general and organization specific environment. PEST stands for political, economic, environmental and technological. The PEST analysis and explain the components of a macro environment within the organization and these can also be converted to fir in with a SWOT analysis. To create competitive advantage for an organization, it is identified that there are three strategies, Cost Leadership, Differentiation and Focus. The suitable standard strategy will make location of the firm to leverage its strengths and defend against the adverse effects of the five forces (Porter 1980). Cost Leadership comprehends having low profit margins and selling lots of units of a product this way, essentially undercutting the rivalry. This usually happens in the supermarkets on certain brand labels so customers will come in to their store and potentially buy other higher priced goods, this can be known as a loss leader. Differentiation is when organizations produce different products or give services which are different from everyone else; an example of this was the door-to-door selling by Avon in the past. This was not the usual way to provide products for housewives but was different and seemed to work. Firms need to identify customers' needs, design the production and service strategies to meet their needs, and measure the results to improve such strategies. Customer desires and requirements drive competitive advantage, and statistics show that growth in market share is strongly associated with consumer satisfaction. Customer satisfaction is also an important factor for the bottom line. Achieving strong profitability and market share requires loyal customers, who stay with the company and make positive recommendations to others. Loyal customers will only make business with a particular organization and will go out of their way or pay a fee to stay with the company. If organization wants to achieve customer satisfaction, products or service must get together or go above customer expectations. Supplier and organization are interdependent on each other. This liaison develops and nurture strong business ties and make both needed each other to achieve desired goals. The ties can become stronger when both an organization and a supplier are highly dependent on each other. The most important thing is that an organization cannot offer customers superior service if the suppliers are not giving the organization the same. It is important that the organization must have a high communication frequency and information sharing with its suppliers. A good frequent contact and information sharing helps routine issues such as product availability, order handling and delivery issues and reduce uncertainty. When the organization has frequent communication with its suppliers, it can give the supplier the chance for operational improvements and product development. This can indirectly help the organization because when the advice is accepted, the efficiency and effectiveness of the supplies can be improved. If the role of the supplier is underestimated by the organization, the organization could prevent itself from improving and developing. The offering A high level of product quality usually leads to customer confidence. An organization cannot build that confidence if their supplier cannot produce a high quality supplies. The role of supplier here is to make sure they can produce quality product that an organization is expected as well as its costumers. Transaction cost is also another important element in supplier's offering. Transaction cost give emphasis to the efficiency of inter-firm ex-change and the magnitude of transaction cost is what determines the degree of relational behavior between firms. Transaction cost includes frequency of transaction, uncertainty and asset specificity, such as location of firms and the delivery. Cost Organization seeks suppliers that give the best price, such as cost of the products, materials of components purchased and other costs involved process. Organization seeks suppliers that give the best price, such as cost of the products, materials of components purchased and other costs involved process. Brand and country of production Brand and country of production provides value both to the Customer and organization. The quality of the product is always associated with the brand and Country of production when costumers are making quality judgment. The supplier therefore has an important role when the organization is setting out its marketing strategies. Conclusion Organizations move through discernible life cycles as they established and grow. As organizations pass from each cycle and then next, they must reassess the way they operate and make organizational changes that suit their new stage of development. What worked in one stage must not necessarily work in another. Research demonstrates that strategically organizing the life cycle requires well-rounded managers who can understand the changes an organization need to enable it to stay competitive at each stage of its development. In the growing phase effective managers are required, as they understand the certainty of their environment - its values, goals, politics and limits. They set realistic objectives that acknowledge organizational restraints and dovetail with corporate goals. No general formula exists on how to downsize and re-configure an organization but it is important to concentrate on some key aspects and to learn from the mistakes as well as the successes, incorporating these experiences into the process. That happens with right organization strategy because it will effect on every factor of organization which is needed for its survival. Without a proper organization strategy business can not run and will not be able to achieve its corporative and prime objectives. Works cited Porter, M. E. Competitive Strategy. The Free Press.1980. Mintzberg, H.The Design School: reconsidering the basic premises of strategic management, Strategic Management Journal. 11, pp. 176-95. Burke, Kenneth. Language as Symbolic Action: Essays on Life, Literature, and Method. Berkeley: U of California P, 1966. Read More