What are the Four most Reliable Strategic Approaches for Setting a Company apart from Rivals and Winning a Sustainable Competitive Advantage?
For a company to stay competitive and way ahead of its rivals, it must have careful thought and planning through well-crafted strategies whose implementation leads to its continuous success as far as profit maximization is concerned (Coulson?Thomas, 2005). Four major strategic approaches should be used by the company management to make sure that it has a sustainable competitive advantage. All of them take care of the market dynamics that ensure that consumers are more likely to adopt the products that the company produces or sells than those of the rivals.
The first of such strategies involves the company setting up to the low-cost provider of a particular product on the market (Coulson?Thomas, 2005). Consumers will more often than not buy the product with the lower cost if the quality of two products is similar and the two products perform similar functions. As such, the company whose products are priced competitively on any market will always do better and have a more significant percentage market share than the other goods on the market. Providing low-cost goods is a long-term strategy that starts when the company starts producing goods at the lowest possible cost. The company can sell such goods at a lesser price than the competitors products. For instance, Wal-Marts success can be attributed partially to its competitive pricing of goods.
The second strategy involves product differentiation. Consumers will react to products that are different from those of the rivals. The company can do this by ensuring higher quality and better performing services and goods (Coulson?Thomas, 2005). Furthermore, the company can also achieve product differentiation by making sure that the services are value added in comparison to those of the competitors. An addition of a useful attribute to a companys products that the rivals are unable to do will also help in product differentiation. An example is Mercedes-Benz that despite tough competition continues to be the prime carmaker in the world because of its differentiating features such as unique engineering design and performance.
Thirdly, a company should seek to narrow a market niche (Coulson?Thomas, 2005). This involves focusing on a particular aspect of the market to satisfy its particular aspect. Market niche also involves satisfying a certain price range of the market. This ensures that the company can focus on satisfying a particular segment of the market rather than producing goods or services of a general type that are of low quality and poorly priced. An example of a corporation that has stayed competitive because of its narrow market niche is Microsoft whose Windows platform is the most used for personal and business computers in the world.
Lastly, a company should develop expertise and resource strengths that are not easily matched or copied by rivals (Coulson?Thomas, 2005). The appropriate term for this is a capabilities-based competitive advantage. This ensures that the company can stay competitive even after the other companies on the market discover the reason the particular company remains competitive. For instance, few companies can match Fed-Ex's next day delivery of small packages.
Discuss the Business Case for Ethical Business Conduct and Socially Responsible Business Behavior
Business ethics provide the moral principles, values, and guidelines about what is acceptable in the conduct of a business (Porter & Krammer, 2007). Socially responsible business behavior, on the other hand, refers to conducting a business in such a way that it acknowledges that a company should not only focus on profit maximization but also embrace social responsibilities.
There are several advantages of conducting a business in a way that is both ethical and that acknowledges its corporate responsibilities. The first one is that the company can attract and keep its three most important facets: investors, employees, and customers (Porter & Krammer, 2007). While the lack of ethics is not synonymous with illegality, a business that works in an ethical manner is more likely to attract and keep investors and employees as both of these groups want to avoid getting caught up in unethical business practices that may spiral out to be illegal. In the same vein, customers are more likely to buy products of a company they feel has ethical praises and engages in socially responsible behavior.
Secondly, an ethically-minded business is less likely to lose money from fines to suits due to poor behavior like anti-business practices, environmental sustainability issues, and money laundering (Porter & Krammer, 2007). First, this ensures that the business does not receive bad publicity if the press reports on such practices, and secondly, that it does not lose money on unnecessary expenses like payment of fines.
Thirdly, one of the most critical aspects of a business is its reputation. It usually takes many years to build one, and rebuilding it after a business has lost it is usually very hard. Reputation can determine how a business performs on the market (Porter & Krammer, 2007). For instance, a bank with a reputation for dealing with corrupt foreign government is likely to suffer in the long-term as other customers start questioning the integrity of the management. A coffee company that gets its coffee beans from severely deforested areas, thus indirectly supporting deforestation, is likely to lose environmentally conscious customers. Upholding ethics and socially responsible behavior, like ensuring that a company does not have an association with corrupt, despotic governments from abroad, and socially responsible practices like environmental conservation policies will lead to a good reputation that the company will be able to convert into goodwill. Bad reputation, on the other hand, will most certainly lead to investors, customers, and even potential employees avoiding the company.
In addition, ethical practices and social responsibility ensure that there is a level of connection between the business and the community. This is mostly done through the company getting involved in community projects like charitable issues, around which it either produces or sells its goods. This way, the community will identify the company by the products it manufactures or supplies and will seek to buy them, preferring them to those of the companys competitors (Porter & Krammer, 2007). Accordingly, the company will have a loyal and sustainable customer base. This will translate to more sales over a long time and more revenue.
Discuss what Constitutes Effective Managerial Leadership in Achieving Superior Strategy Execution and Operating Excellence
The first aspect of effective strategy execution by the management is dedication to the customer satisfaction (Ackoff, 2005). The cliche that the customer is always right holds true. This becomes more apparent when one considers the fact that to thrive a business should not only attract but also retain customers. The operations of the business should always be centered on the customer with services and orders delivered in time. Whenever the customer brings up a complaint, it is good to listen to them and understand what they have to say. After that, constant and immediate response is crucial when responding to the issue the customer has raised. Letters by customers and other communication like emails, telephone calls, and faxes should be replied timely and appropriately. This will help keep and retain such a customer, as he/she will be confident in the companys services.
In the same vein, one should also ask the customer questions about unclear orders and instructions. In addition, regular surveys and feedback should be sought from customers. This brings to light those areas a company needs to correct to ensure that the customer is satisfied. The company should deliver goods promised to customers, or any other service should be provided on the agreed dates and manner. The expectations should be set correctly and delivered accordingly. In case that fails, the management should notify the customer in time. Finally, everyone in the company should respect the customers. The philosophy should state clearly how the company values its customers, and everyone must be bound to that golden rule. These important tenets will retain a stream of loyal customers and thus, company profitability.
Another aspect of managerial leadership is cost control (Ackoff, 2005) Cost control involves better economic ways of completing each task by minimizing wastage. Cost control operates where the company has set standards that are measured against a performance standard. If there are deviations from this performance standard, they should be corrected in time since such cost control tries to attain the lowest cost transactions in any given operations of the company. The first element of cost control is laying the goals and objectives that the business will use as standards. Secondly, the plan is passed to the staff responsible for executing the plan. Thirdly, the management should motivate the entire company to work towards the set standards for cost reduction. Lastly, there is the process of controlling, where performance is measured against the set standards and deviations if any corrected.
Thirdly, the management should encourage strong work ethics coupled with ethical business conduct in the company (Ackoff, 2005). Making stakeholders aware of a commitment to ethical business conduct is crucial. The leader should play a big role in setting the agreed ethical behavior. The management should, for instance, make this clear in the employee manuals. Furthermore, as a last resort, proper punitive measures should be clearly set out in such a way that those who do not adhere to ethical conduct are punished. The leaders should set example for other workers in upholding ethics in the workplace. For instance, they should have respect for all workers in the company. Finally, the leaders should respect the opinion of the employees and the customer requests and do their best to honor them.