Strategic Planning Essay Example
The process of implementing cost leadership through organizational structure
If affirm wants to implement cost leadership they will do it though the establishment of a functional cost leadership through a functional manager. The chief executive officer of the company will be the only person who shall be having the multifunctional duties (Hill & Gareth, 2010). The Cost leadership shall be implemented through the chief executive officer formulation of the strategy to take place and the activities that are involved in the strategy formulation. The management control systems are characterized by the tight systems, reports that are detailed, the management emphasis on the quantitative goals and the compensation policies. The employees are offered compensation policies as a form of incentives so as to reduce the loss that are incurred in the company.
The main objective of the cost leadership therefore is the reduction in costs so as to have higher costs as compared to the competitors. The functional managers need to understand who has the cost advantage in the organization. In this way the manager is supposed to have knowledge of who has the cost advantage and then strategize against however has the cost advantage. The functional manager then shall assess the source of the cost advantage and be able to deal with it in the appropriate manner.
The process of the firm’s product differentiation through organisational structure, control and compensation policies
The organizations have got different ways of managing things. However there needs to be a clear cut policy to ensure that the policy is not stuck in the middle as compared they seek the incorporation of more than one strategy (Hill & Gareth, 2010). Differentiation is one way that porter developed of dealing with the product control. The organizational policies and the arrangements are needed to reinforce the organizational product differentiation. There is a range of skills and abilities that are required to properly carry out product differentiation these skills include: strong marketing abilities, product differentiation engineering, creativity, product reputation for quality, basic research abilities, technological competencies and the firm cooperation with other channels.
The organization is required to have very strong marketing capabilities. This will make it possible for the organization to properly differentiate the product in the market form other similarly related products (Hill & Gareth, 2010). There is also need for the product development team of highly skilled and creative employees. The employees should ensure that the product that is developed is of the highest quality possible. The employees should also be awarded incentives so as to curb the issue of loss through the product. The organization should ensure that the social amenities such as housing, office environment is of the best quality. This will in turn attract investors and the top notch employees to the organization. In conclusion product differentiation strategy should ensure that the product is placed in the market higher than the other products currently available. The consumers of the product should be able to uniquely pick the product amongst many others in the market due to its outstanding qualities.
Measures taken to ensure competitive advantage
The companies should focus on its competitive advantage through the focus on its strengths that is the focus on the making of them the core competencies. The strengths in the business is the resources that are found in the business. In the gaining of competitive advantage the business need to seal the advantage gaps that are in the business (Hill & Gareth, 2010).The advantage gaps are the gaps between what the company holds and the place the business should be in. In the case of the employees in the business they are the main people who should be involved in the future of the company. As such managers need to continually develop the skills and the abilities of the company as well as the ensuring that the employees’ behaviours are in tandem with the organizations strategic behaviour.
The competitive advantages can also be viewed in terms of the functions that are taken in the organization (Hill & Gareth, 2010). This can be classified such as the human resources, research development, finance, operations and marketing. The strategy undertaken in the business should take into account the type of the function and the context in which it is operated in so as to ensure that the strategy is in line with the functionality of the business. The type of the competitive advantage includes the financial, human, and organizational resources. The organizational financial resources are seen as being easily convertible into the other forms. The organizational resources are inclusive of the strategic planning of the organization. If the organization takes into account the competitive advantage from all the perspective such as the gaps, the function and the form tare being strengthened. At the end of it all, the organization may gain competitive advantage through these ways rather than focusing on its weak point.
How a firm management can decide to change the new technology
An organization in the current digital technological era can change the technology that is in operation into a new technology even if it is untested. This is because the digital technology remains one of the drivers of business in the 21st century (Hill & Gareth, 2010). Therefore the organization that does not have technology application that is up-to-date will definitely miss out on a particular cliché of employees. The use of new technologies can be really beneficial to the organization in terms of the decisions that will be made in the organization.
There are several factors that may fuel the organization using of a particular technology. The first cause is the simplicity or complexity of the technology used. Organizations will obviously go for less complex systems as compared to the complex systems of technology. Managers will go for the systems that the employees will have ease going for it rather than the complex systems that have been tried. Efficiency in terms of the service provision of services and products may also make an organization to embrace technological change. Information security is also important in the wake of digital technological change. This is because the technologies will change the manner in which the company’s data may be breached or its key information accessed.
Passing information on the environmental factors to the key decision makers
Information is a very powerful toll for key decision making in any given environment. The key strategic officers in any organization should understand the context that the business is in and therefore ensure that the business functions effectively (Hill & Gareth, 2010)
Environment is very important in the study of the occurrence of the business given that the nature of the business is constantly evolving. The organization need to have proper tools in place for examining the changing and uncertain environment context. The strategic leaders can get information on the environmental factors through the use of reports. This means that the reports are being undertaken to ensure that the different components of the environmental factors are taken into account. The reports are generated as part of the work requirement mostly in a weekly basis. The information can also be passed across during the meeting with the relevant stakeholders. This may serve as a good platform for even getting an immediate reply.
Management using the experience curve to determine strategy
The experience curve dictates that the more a company produces a certain product the lower the costs of production (Hill & Gareth, 2010). This means that the first benefit of using the experience curve is the reduced cost in a business. The experience curve also makes the old firms to dominate the market. New entrants are blocked from accessing the already dominated market. The experience curve also helps a business to be able to be ahead of competitors in terms of inventions and innovations.
The disadvantages that come with the use of the experience curve is that firstly the experience curve is not the only strategy available for the conduct of business. The business competitors may also choose the same strategy for the conduct of business. This may mean that the investments of both companies shall be high and the returns shall decrease considerably. Competitors who may copy the production and not look at the research and development of the particular brand may end up spending less than the given organization. Lastly, technology innovation may lead to the development of better curves. The organizations that shall enter the market late shall therefore be advantaged.
Hill, Charles W. L, and Gareth R. Jones. Strategic Management Theory: An Integrated Approach. Boston, MA: Houghton Mifflin, 2010. Print
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