Sample Business Studies Research Paper on Strategic Management

Introduction

The term strategy has been widely discussed in the business literature. Scholars and consultants have provided many definitions and frameworks used by a company to analyse strategic choices (Hambrick and Fredrickson 5). According to Porter, the strategy involves achieving a competitive advantage against opponent firms by delivering value-added customer service and having a clear and enactable way of where to position the organisation in the industry (44). The success of implementing a strategy hinges on the firm’s ability to complement various activities, thereby adding value to it. Currently, the industry market is fluid and success is not guaranteed. While there is much debate on substance, experts agree that strategy requires the company’s capabilities and its market match. However, analysts like Porter disagree and argues that that strategy does not involve predicting future outcomes and making plans based on anticipations, but rather conducting a deep analysis of the current company’s position and formulating enact able strategies to put it in a better position in future (45). Another perspective defines strategic management as putting in place a management system that will facilitate the capability of a company to respond to an unpredictable business environment, and thus not amenable to a planning approach. Nonetheless, there is no best way to carry out strategic management. The two approaches are applicable in a stable business environment. However, this approach has come under criticism from such scholars as Porter who maintains that such an environment is rare to find owing to the increased redundancies of current events, thereby thwarting creativity. This text presents a critical analysis of real-world strategic management issues, how the Al Tayer motors develop strategies for international business, the impact of internal and external factors on the strategic need of the organisation, and the strategic performance of the firm at the organisational, business and operational levels. In addition, the study will delve into what entails strategic management and factors that need to be considered while formulating new strategies.

Real World Strategic Management Issues

 In a strategic management model, the first step involves analysing the firm’s current strategy; this involves its strategic history by the managers and employees. Although in most cases, the senior management provides direction for strategic management, the employees are the ones who actualise the plans ate the point of production and delivery of the company’s products (Hambrick and Fredrickson 55). A firm’s actual strategy can be a result of the strategic planning, formulation and implementation of the plans. More often, it involves the results of the adaptation of the plan to emergent issues in the environment. In some cases, Porter argues that the actual strategy can be different from the planned strategy since the firm may not have a clear plan (56). In such cases, the strategy is defined as emergent in the sense that it emerges from the ongoing series of events and decisions. An organization like Etisalat which is in the telecommunication sector has been forced to come up with strategies due to the entry of new competitors in the industry. They focus on providing added-value services such as specialized media content and enhanced mobile data content. This helps to increase their revenue from data services. By coming up with new marketing strategies like initiating promotions for their services for a specified period of time, it may enhance the loyalty of their customers and even attract potential customers.

When managers decide that they are happy with the current plans, the can take this in two ways: first, in a proactive sense they can analyse the environment and its potential for change within the organisation and decide to continue doing what they do or change some operational or management procedures (Hambrick and Fredrickson 54). In a less activity, the managers can decide to continue with the traditional way of handling operations. Again, this comes in a variety of ways; they can scan the external environment and decide that there are major changes taking place in the business world, or they may decide to change internal business operations. Another change stimulus according to Hambrick and Fredrickson is the appointment of a new manager who may want to leave a mark in the company before leaving or change strategy for a personal reason (58). 

Before strategic changes are made, Porter contends that two issues are first considered and they include the external environment analysis and the organisational analysis (26). For the change to be effective, there must be both internal and external factors aligning, this is known as a strategic fit. According to Hambrick and Fredrickson, the ideal situation is where there is cohesion between the environment, a business need arising from the environment that is strongly felt by an objective oriented company and a management system that is effective enough to execute these strategies (57).

Environmental analysis is segmented into four elements. These elements include the general environment, the operating environment, the competitive environment and the direction for the development of objectives.  In this case, the business manager is charged with the responsibility of striking a balance between an evaluation of the firm’s externalities and internalities with a view to identifying the weaknesses and strengths inherent in such a business. A major part that bridges these factors is the stakeholders; these groups have to be strongly put into consideration when planning new strategies for the business, they include the employees, internal managers, owners of the business and shareholders. Thus, the senior manager aligns these group’s interests to arrive at a common chosen strategy in the light of the creation of an appropriate strategic vision for the organisation.

 In strategic management, aspects such as the growth sector show key decisions concerning the direction that the company may choose to follow. In addition, Hambrick and Fredrickson note that market penetration is included when the business wants to increase its market share for its present products (58). It the company decides to pursue new product development it may introduce new products to complement or replace its current products in an attempt to satisfy the customer’s related needs. If a diversification strategy is to be used, Porter argues that the firms should change its products and introduce them in new markets (16). For example, a firm operating in the UAE retail sector could enhance tis current market share by merging operations. To realise this goal, the firm has to increase its advertising. The firm could also decide to pursue new markets such as geographical expansion while also retaining current product range. The notion of a competitive advantage should govern the choice between strategic options. The firm has to identify unique opportunities for its products in the current market position. Hambrick and Fredrickson are of the view that the company needs to identify unique attributes for its strategic approach in order to realise a formidable competitive advantage (56).

Development of New Strategies for International Business

 In the present world, about 20% of the total world population living in developed countries consume more than 75% of the total global industrial production (Hambrick and Fredrickson 52). However, new markets open up every day; new customers take part in these markets, new jobs and income also increase. In most cases, the start of economic growth has been brought by low-cost production in the private sector and infrastructure development in the public sector; often at rates only the developing countries only dream of (Porter 21). The world is changing rapidly. Industries like the car manufacturing, are shifting their manufacturing from the traditional places to other ends of the world. Information technology and technologically advanced logistics have been making many companies working more effectively on a global scale. Time has come for many companies like Al Tayer motors to restructure their operations and create a global position or remain irrelevant all the same.

Although many companies seem to be doing just fine without a formal business strategy, international operations should start with direct exports (Hambrick and Fredrickson 56). These are often initiated by indispensable entrepreneurial managers and excellent salesmanship who attract huge financial returns. Nonetheless, after some time, the management in that firm begin to realise that such a profitable endeavour involves some risks and can result in fewer profits or more losses in comparison to the firm’s potential. For instance, the international export staff might overlook some good business opportunities in foreign markets (Porter 86). Other business might not have a contingency plan in case the profitable export markets suddenly disappear because of emerging trade barriers. When a business reaches this point of international expansion, they should no longer ignore the development of a formal international business strategy, from the existing multinational firms. Strategic planning involves good salesmanship to make sure the results are optimised to minimise risks. A company like Emaar Properties, which deals with the restate industry, reached a point of international expansion, thus had to come up with a marketing strategy which involves digital marketing and social media optimization. It has encouraged focus on departments such as legal and IT, where their services are advertised on the different social media platforms. By conducted a SWOT analysis of the organization, strategies can be derived from either their strengths, weaknesses, opportunities or threats. An example of a recommended strategy can be derived from the Investor Law policy in Dubai. This policy encourages foreign investment in the country, thus increasing the market. Due to the line of business Emaar Properties is involved in, this can be a great opportunity for them to expand their business. This can be done through providing incentives on offers related to their organization.

The top management should exclusively develop a business strategy. The outline is prepared and presented by the top management to guarantee the firm’s commitment to the international business strategy planned. The steps in strategy formulation process include:

Analysing the Firm’s Strengths and Weaknesses. The main issue will be a competitive advantage using the present products. Some other important aspects include the availability of international personnel, financial resources, and research and development capabilities.

During this step, clear motives for international growth should be clarified. Some of these motives include reaction to competition in order to diversify or minimise risks.

The Second is analysing the Competitors. This is crucial since the firm will face international competitors. Also important is to analyse in detail, their product lines, weaknesses, and threats. In addition, gathering information on how the competitors managed to stay relevant in the international market should be conducted

Selecting Target Markets. Selecting target markets begins with a quick screening of all the potential markets. This should be done using the firm’s product demand factors and demographic data. This screening results in some prospective target countries for which market potential is roughly estimated.

Selection of new Market Entry Modes– the entry modes below can be considered

Figure 1: (Hambrick and Fredrickson 53)

Deciding International Business Strategy at the Top Management Level. Short and precise presentations should be given the top management and recommendations presented to improve in some areas after which decisions will be made on the most suitable strategy for international growth.

Marketing Plan per Selected Market. After deciding on the main issues of international business strategy, the next step involves making detailed marketing plans. These plans are executed in the foreign international markets.

Adjusting the Existing Market. Since implementing the new international strategy might bring some consequences, it would be important expand the capacity for the current staff and adjust internal and external funds allocation. This helps the current organisation to meet the new requirements and challenges of the planned international operations.

Strategies for Attaining Competitive Advantage

International business refers to a point in which strategy meets geography. Five main geographical factors drive international business. First, the home country’s feature has great influence on the company’s competitive performance (Hambrick and Fredrickson 52). For instance, the headquarters of Al Tayer motors plays an important role in the development of the country’s economy. This is because the company is one of  the most profitable firms and pays the biggest tax in Dubai.

Second, the features of the country where production and transaction with various stakeholders takes place shape the company’s competitive advantage. For example, the recent oil crisis that hit the world made Al Tayer motors gain ground in the United States and other countries globally. Currently, the firm has an outstanding market share around the world and is a great threat to the U.S. automobile industry. This was greatly achieved through its management system. Traditionally, the company’s main agenda has been a success. Nonetheless, to adapt to its globalised market, Al Tayer motors had to adjust some of its ideologies. Some of these include protecting the environment as they manufacture the cars (Porter 21). In addition, the firm does not approve conflicts between the management and other departments and they do not tie any contracts with unions for mutual benefit. Recently, Al Tayer introduced a new management system that mainly focuses on prompt decision-making to develop their strategy of achieving global competitiveness.

Third, the feature of the foreign countries where a company serves customers determines the demand for its products. For example, Al Tayer motors has its assembly plants in America, Qatar, the United Kingdom, China, and other countries around the world. The firm has enhanced technology in their car manufacturing technology (Porter 90). Additionally, it has come up with the latest car safety technology whereby they produce cars that resist collision or protect the drivers from harm. In 2012, Al Tayer offered their United States’ employees retirement incentives; this signalled a more mature ace in the country that eroded it labour-cost advantage over other domestic opponents.

Fourth, the featured countries where Al Tayer has partners that provide complementary products affect its productivity and their appeal to customers. Therefore, competitors’ home country, supplier country, and customer countries have a great impact on a company’s competitive advantage in the international business (Porter 78). Al Tayer offers the best services to the customers in each country to maintain the competitive position and demands from its market share. Targeting customers in the customer country is a vital strategy required in expanding the international business. This can be done by analysing the features of the customer country and understanding the specific needs of the customers.

Assign a Chief Sustainability Officer (CSO) who reports to the Chief Executive Officer

Companies like Al Tayer motors, the multi-brand car manufacturer, Etisalat and Emaar Properties have appointed a CSO to implement the firm’s sustainability strategy. Their roles involve transforming the business, strategy, management of data, corporate responsibility, and communications setting new targets and innovations in production (Hambrick and Fredrickson 52).

Providing the Chief Sustainability Officer with a Budget for a Management Team Program

A firm needs to build capacity with help from the program management office covering internal communications, management of stakeholders, and innovation of new service delivery methods and products. In companies like Emaar Properties, with more than $5 billion worth revenues, sustainability PMOs employ more than ten people (Hambrick and Fredrickson 52).

Ask Functional Leaders with Impact in Sustainability to give Reports to the CSO

In every business, reporting lines to the CSO depend on which operations have the most impact on sustainability for the company. For instance, in a chemical firm like the Dow, the CSO should be in charge of the environment, safety and health, as well as the design of products.

Authorise the CSO to set Targets and Policies for Sustainability for specific Business Units

 For firms with mature sustainability strategies like Al Tayer, the CSO should involve the executive team, and the business unit generals to set sustainability goals. The CSO can align the sustainability strategies with the business operations and the language of all managers.

The CSO should Define a Portfolio of Sustainability Offerings

Businesses in industries like Al Tayer motors with huge returns opportunities from sustainable business trends should involve the CSO in establishing a portfolio of offerings to accelerate the internal operations. For instance, Deloitte, IBM, and Logica combine market-leading sustainable technological services for their customers with effective internal sustainability programs.

The Impact of Internal and External Factors on the Strategic Need for Organizations

 Internal communication. This is a major factor that defines the organisation’s culture, which includes close interpersonal relationships, training materials and other policies (Hambrick and Fredrickson 53). The staff is happier when there is mutual respect and also when the leaders notice their achievements. Thus, when there is a positive internal communication environment, the organisation can easily pull its resources together towards a particular objective.

Structure. This affects the firm’s daily operations. A firm’s structure consists of its staffs, various departments and other partner like contractors. The structure mainly affects the number of staff hired, the extent to which staff and departments collaborate to accomplish certain tasks and the hierarchy (Hambrick & Fredrickson 58). For example, a contractual structure means money spent on staff is saved, but the company owners will have less control over the end product.

Economics. The economy is an external factor that greatly affects business. Regardless of whether a company offers services or products, the customer’s ability to pay cash directly has an influence on a business’s bottom-line.  One can offer all the required business-marketing goodies, but during tough economic times, the clients can decide to allocate e their resources elsewhere. Economics might be to a specific industry or globally affecting supply and demand (Hambrick and Fredrickson 59). For instance, if the business is about making toys, and the business decline, it will suffer, thus it would be wise to diversify the products to go above economic challenges.

Conclusion

For Al Tayer motors, Etisalat and Emaar Properties, to obtain and maintain a competitive advantage and acquire a global market share, it requires formulation of effective and enact able strategies based on analysis of the internal and external factors affecting the business. The management decides whether the strategies need to be different from the current or need to be changed to acquire more market share. These companies as to consider factors such as finances, the number of employees and supply and demand before expanding its business on an international scale. New strategies may require changing the internal structure of the business and increasing the number of employees. Thus all these factors need to be considered before implementing new strategies.

Works Cited

Hambrick Donald C and James Fredrickson A. Are you sure you have a strategy? Academy of Management Executive 19.4(2005): 51-62.

Porter, Michael. The strategic management of information systems: Building a digital strategy. New York: John Wiley & Sons, 2016.

David Gorge-Cosh. Competition forces change of strategy in Etisalat.

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Gaurav Agarwal. Emaar digital marketing strategy: Its all about connecting the dots..

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