Strategy For Modern Competitive Environment: Importance, Challenges, And Implementation

Discuss about the Strategy for Modern Competitive Environment.

Strategy is the very important concept that has been studied since years. For making improvements in the business, strategic approach by management in every function is important. This assay deals with the discussion of the strategy and its importance for business and for a non-profit organization. The later part of the essay discusses about the challenges faced by the organizations in developing and implementing the strategy. The concept of modern competitive environment and its relation with strategy is also discussed in the essay.

Strategy is the concept that has been adopted in businesses by military. Strategy can be defined as the set of activities that bridges the gap between the means and the ends. The term strategy has entered the business area by describing the activities or the steps that the company takes in order to compete in the industry and to enhance the customer’s base (Besanko, Dranove, Shanley and Schaefer, 2009). Strategy is the result of the decision that has been made by the company’s top management regarding the process or the policies that needs to be followed by the organization in order to work effectively. It can be defined as the patterns of the actions that are being implemented in order to perform (Ireland, 2007). It can simply be explained as the direction in which the company performs in order to achieve its goals.

Strategy provides direction to the company: as discussed that strategy is the set of activities that needs to be conducted in the company in order to perform the tasks. These strategies provide the direction to the company to achieve its gaols. Thus it is very important for the business to make the strategies to perform each and every task.

Strategy helps in using the resources optimally: making the strategy also helps in using the resources effectively and intelligently (Johnson, Langley, Melin and Whittington, 2007). There are many resources available with the organza tin. Excessive use of these resources may increase the cost of production. Thus, framing the strategy helps in using those resources effectively so that cost of production can be maintained.

Enhancing business and customer’s retention: Strategy needs to be framed by the company in every function such as marketing, sales, HR, operations etc. making the strategy for different function results in enhancing the business practices and also helps in retaining the customers as the customers also prefer to associate with the company having proper functioning (Gobble, 2012).

Importance in business

Example: Woolworth is the company that operates in supermarket retail industry in Australia. It is one of the leading companies in the industry and its strategies are its competitive advantage. Its effective strategies allow the company to compete with its competitors. The company evaluates the industry and the market and develop the strategies accordingly. The recent strategy of the company is to reduce the prices and cater the market (Dos Santos, 2011). As far as the expansion strategy is considered, the company focuses on developing new stores in Australia so that customers reach can be enhanced.

The importance of strategy in Non-profit organization is slightly different from the for profit organization. This is because the success of the strategy in for-profit organization can be measured by its revenue, sales etc. Non-profit organizations also need strategy but their aim is different (Nestorovska, 2013). The effectiveness of strategy in this organization can be determined by the large number of people the organization is serving.

Effectiveness: Strategy helps in making the process effective in the non-profit organizations. This is because if the processes of these organizations are effective then only the organization can attract more number of people (Doole and Lowe, 2008).

Fund raising: Non-profit organisation need funds and cash inflow, which they cannot earn but have to get it from the other organizations (Teece, 2010). This process also required the company to make strategy so that more and more profit organization invest and support the non-profit organization.

Planning: It is one of the major advantages the non-profit organization has by making the strategies. Planning is not only important for non-profit organization but also for the for profit organizations.

Different non-profit organizations have different gaols and have different strategies to achieve the same. Some runs their firm to support the animals, some support the poor people. So, this organization works for a social cause. Oxfam is one of the NPO in Australia that believes in implementing different strategies to cater the service to the people. As far as the recent strategy of the company is considered, they are concentrating on empowering women so that the social cause of domestic violence can be removed (Eyben, Kidder, Rowlands and Bronstein, 2008). Thus making strategy of educating the women and supporting them has supported them to achieve the gaols.

Environmental challenges: the major challenge that the organizations face in order to develop the strategy for the company is environmental challenge (Dul, Bruder, Buckle, Carayon, Falzon, Marras, Wilson and van der Doelen, 2012). The internal and the external environment of the company affect the strategy development of the same. This is because the change in the internal environmental of the company and the variations in the industrial environment have to be considered when the strategy of the company needs to be developed.

Importance in NPO

Challenges of resource availability: It is very important for the companies to make use of the resources available in optimum manner (Freeman, 2010). This is because if the company does not use the resources optimally then it may raise their cost of production. The availability of the resources is also challenge for the company as the company needs to make the strategy according to the resource available to them.

Sustainability as a challenge: These days, sustainability is the big challenge faced by the organizations (David, 2011). This is because the practices of the companies are harming the nature and the atmosphere. Thus making the strategy according to the sustainability laws in mind is necessary.

Legal and governmental policies: different policies area framed by the government for different industries. Thus, the organization needs to frame the strategy in accordance with the legal policies made by the government (Hitt, Ireland and Hoskisson, 2012).

Insufficient partner buy in: implementing the strategy requires the process to be followed. Kit has been analysed that it is not necessary that every partner needs the change or can adapt the change effectively. Thus, it is very difficult to make the changes or implementing the strategy in the process.

Insufficient leadership attention: implanting strategy requires effective leadership. This is because here the leaders have to pay their part in implementing the strategy and helping thee people to adapt the same. Implementation of the strategy fails when there is weak leadership.

Weak strategy: for implementing the strategy effectively, it is required to make strong strategy that is appropriate to achieve the desired gaols (Hill, Jones and Schilling, 2014). If the strategy that has been made is not related to the goals that have been set then it is not possible to get the desired outcome and thus the implementation of the strategy also fails. Making the strategies that are appropriate and aligned with the objectives that need to be achieved then the implementation of the strategy become very easy as it automatically gives best results.

Resistance of change: there are employees in the organization that resist the changes that have been made in the company’s process (Peppard and Ward, 2016). This is because the change in the processes requires the organization to make changes in the associated function as well. The employees need to adapt those changes and require to get trained in new processes and skills. Some of them resist these changes as they need to make so much effort to adapt such changes.

Challenges in developing strategy: for business and for NPO

Example: Oxfam is the non-profit organisation that has faced many issues at the time of implementing the strategies. One of the issues or the challenge is the weak management role. This is the major challenge that has been faced by the company called Oxfam (Eyben, Kidder, Rowlands and Bronstein, 2008). Some of the other problems are unaligned structure of the company, lack of communication between the department etc. these problems need to be resolved so that the strategies cam be implemented easily in the company.

A modern competitive environment can be defied as the external system that affects the practices of the company or the business. It is the environment where all the companies function and compete with each other to get large customers base and market share. If there are large numbers of sellers in the market then the industry has to face large competition as the customers have many choices. In other case if there are less number of sellers than customers have fewer choices and thus the competition is also low in that industry (Wheelen and Hunger, 2011). This competitive environment also involves the competitors that can be divided into two categories. First one is the direct competitors. These are the competitors who sell the similar type of products while the indirect competitors are those who sell different types of products but still compete with the other companies. For any business, it is very necessary to conduct competitive environment analysis so that information about the industry and the competitors can be analysed in order to frame the strategy. There are many factors that affect the competition the industry. Two of the factors are indirect and direct competitors. The third factor that affects the competitive environment in this modern world is the regulators elements. Government makes different policies for different industry. The last element that makes the environment competitive is the social and technological trends. The social and technological trends are changing and thus making the environment more competitive for some of the companies. This is because the companies have to change their processes according to the new technology.

Strategy formation is that major function that needs to be conducted in the organization and environment of the industry is major component that affect the formation of the industry. This is because the change in the environment and the level of competition in the industry allow the company to make changes in its strategies so that it can compete in the competitive environment of the industry. It has been analysed that porter’s five forces is the technique that helps the organization to analyse the five factors that makes the environment competitive such as the threat of competitors, substitutes and new entrants and the bargaining power of seller or buyers. Change in these factors affects the level and intensity of the competition in the industry. For example, the fast food industry is becoming highly competitive these days (Besanko, Dranove, Shanley and Schaefer, 2009. This is because of the changes in the demands and choices of the people from the fast food companies. McDonalds have realised that the environment is becoming competitive and thus developed the strategy of serving the people with different types of meals other than burgers such as McPuff, McFlurry etc. this facilitates the company to cater big market and customers base. There are many companies such as Woolworth and Coles who understands the competition level in the market and this make the strategy accordingly.

Conclusion:

It has been concluded from the report that Strategy is the very important concept that has been studied since years. For making improvements in the business, strategic approach by management in every function is important. Strategy is the concept that has been adopted in businesses by military. Strategy can be defined as the set of activities that bridges the gap between the means and the ends. It has been analysed from the report that strategy is very important for the business and for the Non-profit organizations as well. This is because for running the business and achieving the desired goals, it is required by the company to frame the strategies that provide direction that needs to be followed.

References:

Besanko, D., Dranove, D., Shanley, M. and Schaefer, S., 2009. Economics of strategy. John Wiley & Sons.

David, F.R., 2011. Strategic management: Concepts and cases. Peaeson/Prentice Hall.

Doole, I. and Lowe, R., 2008. International marketing strategy: analysis, development and implementation. Cengage Learning EMEA.

Dos Santos, M.A., 2011. Minimizing the business impact on the natural environment: a case study of Woolworths South Africa. European Business Review, 23(4), pp.384-391.

Dul, J., Bruder, R., Buckle, P., Carayon, P., Falzon, P., Marras, W.S., Wilson, J.R. and van der Doelen, B., 2012. A strategy for human factors/ergonomics: developing the discipline and profession. Ergonomics, 55(4), pp.377-395.

Eyben, R., Kidder, T., Rowlands, J. and Bronstein, A., 2008. Thinking about change for development practice: a case study from Oxfam GB. Development in Practice, 18(2), pp.201-212.

Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge university press.

Gobble, M.M., 2012. Innovation and strategy. Research-Technology Management, 55(3), pp.63-67.

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases: competitiveness and globalization. Cengage Learning.

Ireland, R.D., 2007. Strategy vs. entrepreneurship. Strategic Entrepreneurship Journal, 1(1?2), pp.7-10.

Johnson, G., Langley, A., Melin, L. and Whittington, R., 2007. Strategy as practice. Research directions and resources. Cambridge.

Nestorovska, T., 2013. The role of the human resources in the creation of the competative advantage in the modern buisness environment. European Scientific Journal, ESJ, 9(34).

Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a digital strategy. John Wiley & Sons.

Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning, 43(2), pp.172-194.

Wheelen, T.L. and Hunger, J.D., 2011. Concepts in strategic management and business policy. Pearson Education India.