Issues of Strategy Management
Music Industry is best example of regular strategy challenge being faced by the managers in this environment. Over the decades the rate of CD sale has been degraded to almost 50% that too from the top. Most of the music retailers have also been affected by this situation other than musical companies. In what manner did this affected the retailers? Retailers are forced to make adjustments by giving some of their space to different products.
For some example, Best Buy one of the best national electronic retailer, has started with their musical equipment’s sell. In the year 2010 this company has started their 100th instrumental department for sell. Other similar category retailers were Walmart, have also started selling their space to others. Most of managers are looking for ways that could help them succeed such situations easily. Thus for musical stores these diversification has been important. Strategic challenges have made many of the business change their whole areas of work.
In fact, managers have to face stiff competition for higher performance by the customer as well as investor. Here we will go through current three forms of strategy management issues with the need of strategy leadership, flexibility and strategies that emphasis electronic business, innovations and customer services.
Need for strategy leadership:
The CEO of Spain’s Inditex, Pablo Isa the owner of chain Zara has been seeing expansion these days. They have decided to add up 450 stores per year, with a three tier of store on the Chicago Michigan Avenue. With retail space being available in US, Isa is still thinking for better chances for deals.
Strategies of any organization is developed and taken care of by the managers. CEO being the top of a company works with respective team like COO, CFO, CIO, and some other individuals with varied title manages the work. CEO turns out to be the oldest channel through strategist, developer as well as architect for structure. Whereas other roles would include the key decision making, leading the vision, political acting, monitoring and interpreting changes of environment as well as strategy designers.
It doesn’t matter how the top level jobs are been described, but from other perspective of organization this is not less than other organization jobs. For actions of every organization employees top class managers are mostly the reasonfor every decisions. They play a strategic leaders role quite well. Some of the organization research studies leadership with relation to those of strategy management just because the managers should be able to serve with effective strategies of leadership. How would you describe this strategic leadership? In better terms this is the ability for anticipation, maintaining the flexibility, thinking strategically, and working with organization in order to make changes for the future of each organization. But how can the top rated managers serve with strategy leadership? This can easily be done with the eight key dimensions shown in Exhibit 9-6. Dimensions being mentioned below are mainly sued for determining an organizations vision, maintaining and also exploiting the core competencies of the organization, development of human capital, sustaining strong culture through organization, maintain the bets relations of organization, reconstructing the present era of organization by asking varied questions and making assumptions, emphasizing upon various ethical decisions of the organization, and also keep a balanced control over organization. Here in the figure each dimension is configured for the important parts of strategy management procedure.
The economic recessions have transformed the ways of strategic planning for many organizations. For example, Spartan Motors one of the specialized vehicles maker, has tried drafting one year of the strategy plans along with 3 years of financial planning. They even review each of the plans at the financial quarters. CEO John Sztykiel had mentioned that, “most of the inflexible methods bear a kind of blame for the Spartan’s sharpest dropping through sales and their gross profits.” According to him, this company responded late while shifting demands. The company has aimed at using strategic plan of three years that are usually updated by top managements. On the other hand for the J.C Penney Company, a best of five year strategy based growth plan has been followed that too in the year of 2007. But simultaneously this has to be kept under hold just for the economic being floundered. The CEO named as Mike Ullman III has made a temporary plan for bridge for the guidance of the company. Slowly the plan worked for the profit margins of the company with less employee layoffs.
The former CEO Jurgen Schrempf of Daimler AG Has stated somewhere that moving faster and making mistakes is a better choice rather than moving slow. Moving faster would help you to improve those mistakes. In fact, it reduces the chances of mistake. When it comes about strategy management often managers who run large organizations are seen making mistakes. In fact, most of the time when they make decisions there is no guarantee whether it would go right or wrong. Today’s businesses support these assertions. Responding quickly is definitely needed when any of the strategies are not working. In other terms, a need of strategy flexibility is required. This is needed in order to maintain the ability of recognizing external transformations, be quick towards resource commitments, and also to find out when strategy decisions do not work. Today’s environments are uncertain and managers have to work in these environments only. The figure 9-7 suggests more about flexibility strategy for development.
Important Strategy for today’s organizational environment:
The ESPN.com has been collecting over 16 million users every new month. You might be highly surprised to this news! But yes of course 16 million is simply more than the twice of NEW YORK’S population. In fact, their online businesses is similar to those of the ESPN does. Originally this ESPN was founded as a TV channel but now they are working as a programming, online, gaming, radio, ESPY awards, global, ESPN zones, X games, and would be moving towards coverage of local sports. When it comes about entertainment then the company’s president George Bodenheimer has been successfully running the high class entertainment franchise. Not only this, the president is also able understand the goals of different strategies as per the environment. Three strategies namely e-Business, innovation and customer services are equally important.
The major reason behind using e-business strategy was to develop further better sustainable competitive advantages. This e-business can easily be used by a leader of cost in order to reduce the costs to some extent. For example, the company might make use of online techniques of bidding and other processes such that too eliminate the sale calls need and also decrease the forces of sales expense. Other than this the company could also make use of web based control systems such that storage costing gets reduced and also online evaluation of applicant’s job.
What does a differentiator require to do? The major work of differentiator is to offer various products along with services that a customer can easily perceive as well as value them. A business can also make usage of internet service such that they can cut down the response time for each customer, provide regular responses to the requests made for service by customers online, and automate the purchasing system as well as payment options for providing a detailed report to the customers.
The focuser mostly target towards the narrow segments of markets with various products range in order to serve them with discussion board for allowing the customer to communicate well with others having similar interest. Design the website of Niche for targeting specific group with different interest, or else make use of websites that can perform well standardized functionalities.
Various researches have made it clear that perfect e-business strategies could be clicks-and-bricks strategy. Thus the term click-and-brick describes the term that makes use of both online as well as traditional stand-alone location. For instance, the Walgreen’s online site made for order of prescriptions from a near store instead of shipping them to the customer’s house. Instead of ordering online customers preferred getting them from near stores. This made it called as a clicks-and-bricks method of strategy.
Customer service strategy
Most of the companies aim at having excellent service for customers. What they need is cultivation of strategies from the top to the bottom for better chances. Strategies that aim at serving customers with services that they demand, effective communication, and serving employees with raining upon customer service are equally important. Let’s have a look at strategy with which customers would get what they demanded.
Important customer servicing strategy is to serve them with the desired services. This is in turn the organizations major strategy for marketing. For example, a brand new athletic shoe by New Balance has the potential to serve customers with unique products range with varying width. None other company could serve you with this varying shoe size facility in a practical manner.
Pursuing an effective way of customer communication service is one of the important services for customer as per the strategies. It is the duty for managers to know what exactly is going with their customers. The managers are required to make interactions with customers in order to find what customers liked about the products and what they didn’t about purchase. This can be achieved simply by interacting with the customers about their product. In fact, sometime it also gets necessary for the managers to let their customers learn what’s going on within the company related to products. This is done certainly to avoid products purchasing. For example, a company named as Retailer Hot Topic is relatively curious about the feedback of their customers which they collect in forms of report cards. CEO of the company Betsy McLaughlin replies to over 1000per week.
Organization’s culture plays a vital role for excellent rate of customer service. For providing this employees are required to be trained well for better service. For instance, the example of Singapore Airlines could be considered as they are great at their customer service. An analyst says that, “they never scrimp up even after facing all things in front of customer”. Employees are there to provide services to customers thus they should be good at this.
The best example would be from the Procter and the Gamble who purchased the business for Iams food, they did a regular technique of transforming technology to make their new division of products. One of the outcome forms these cross division processes are: new tartar ingredient that was included in the toothpastes of the adult pets.
This instance shows that the innovative strategy does not focus on radical, and breakthrough products. In fact, the uses of existing technologies to form new products can also be done. The best thing is that organization has attempted both of these approaches. In today’s surrounding what type of innovative strategy is required? Strategy that could reflect innovative philosophy, with two strategies especially innovative emphasis and timing works well for today’s environment.
It is the duty of all managers to decide what would be their first emphasis. Where the organization is trying to focus more is it basic scientific point, development of product, or else improvement of processes? The basic scientific researches demand more of the commitment as they probably involve nuts and bolt of all scientific work. Any organizations experts are the only key for their sustainable competitive advantages. It is not vital for every organization to commit for such scientific research for higher performance. In fact most of them depend on the product development strategy. This type of strategy requires a resource investment as they are not from scientific research areas. The organization tries to improve the existing technology for better usage. They did it in a similar manner just like the Procter and Gamble did. The approaches towards strategic innovations could help to achieve higher differentiation level. This turns out to be suitable for competitive advantages.
The ultimate strategic process would be innovative emphasis. This genuinely focuses upon development of processes. With this strategy, organization could find out for ways that could improve their working processes. With this organization could develop newer methods for their employees. Ultimately this leads to lower costing and benefits for the competitive advantages.
Often very few organizations are seen being first at their innovations whereas others follow those innovative mimics. Every manager should be able to decide about the innovation effort first and then start deciding the innovative timing strategy. A first mover is an organization who can bring any of their first innovations to use through markets. But for the first movers it has always been profitable. They will get advantage over strategy. Few of the advantages as well as disadvantages are listed in the Exhibit 9-8.
Most of the organizations follow this trend of route in order to develop better through sustainable competitive advantages. Being a follower could also bring you with sustainable competitive development advantage. Usually these first movers are moving ahead and others are being their followers. This solely depends upon an organizations manager which path they are choosing with resources and capability.
Links of Previous Main Topic:-
- management and organizations a managers dilemma
- Understanding managements context constraints and challenges
- Managing in a global environment
- Managing diversity
- What is social responsibility
- Managing change and innovation
- Managers as decision makers
- Foundations of planning
- Strategic management
Links of Next Fundamentals of Management Topics:-
- Case 1 application gaga over gaga
- Case 2 application faded signal
- Summary of chapter nine with learning outcomes
- Contemporary planning processes
- Planning tools for the techniques module
- Preparing tips for the career
- Techniques for resource allocation
- Techniques that will focus more upon environment
- Basic organizational design
- Adaptive organizational design
- Managing human resources
- Managing teams
- Understanding individual behavior
- Managers and communication