Every competitive business organizations need to develop and adopt a long-term strategy that will help it penetrate into the marke (Hax & Majluf, 1984). Every business aims to create a plan that will help it achieve a competitive advantage over others in the market and outdo its competitors. The strategy needed to be thoroughly developed and implemented to produce the required and the overall goals of the organization. Strategic planning, however, depends on the type of a business and the nature of business or activities involved in. Big corporations like the Foxconn Technology Group need a well-thought policy in the development and implementation of their strategy. Its market is global, and their main aim is to expand and maintain its international markets. Their that Foxconn’s business is based is a competitive one since there is an endless list of manufacturers of electronic products in the world. Gaining control of quite a big market across international orders is therefore not a simple task (Hax & Majluf, 1984).
The main focus of Foxconn is to continue expanding its market and realize huge sales; make sharp acquisitions, to buy the computer memory chip from Toshiba and setting of a new manufacturing firm in the united state. The strategy is high-leveled considering that this will involve a substantial investment. In fact, gaining new market in the united states proves a significant challenge to Foxconn because of the nature of competition in the U.S. it is an objective of every corporate business to reduce cost and maximize on sales hence increase on the profit. Their strategy thus requires much attention, and more so, it should bring together all the main players/stakeholders and make a SWOT analysis of their business (Hax & Majluf, 1984). This should bring at around table all the departments and administrative functions of Foxconn.
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Foxconn’s primary corporate strategy before the sharp acquisition was to invest heavily in manufacturing technology. This was to counteract the rising labor in China. They aimed to replace human labor with a robot (Burgelman & Wheelwright, 2014). The strategy was lucky since they were able to realize increased revenue. This had an impact too since it led to unemployment with around sixty thousand employees being eliminated. Acquisition of Sharp is a significant boost to Foxconn if only things go in favor of their expectations. The strategy before the acquisition renders quite a significant number of its employees jobless. The move is considered not very confident. For a good corporate strategy, any business especially large corporations should ensure that policy cuts all around all the business aspects of the firm (Burgelman & Wheelwright, 2014).
When making a strategy, large enterprises should put all the factors into consideration. The level or rather the extent to which a company can go while making policies should factor all the possible impacts/ consequences the strategy will have on the business. The level and extent to which Foxconn is overwhelming. The may have big goals which require a comprehensive strategy. Foxconn, however, attained a high degree of corporate strategy. This dictates a significant boost to them. This is because it translated to growth and expansion. Expansion to Foxconn would mean a diversified market for their products. The action of acquiring Sharp is, therefore, an indication of high-level corporate strategy, and a better market share for Foxconn (Barringer & Bluedorn, 2012).
On expansion, corporate businesses like Foxconn requires a comprehensive strategy and develop an expansion criteria which would render their goals successful (Burgelman & Wheelwright, 2014). The nature of Foxconn business gave an opportunity for the sharp acquisition. The idea of buying the computer memory chip business from Toshiba was the best criteria/approach to expansion. One of the main goals of the business is to expand and grow and of most importance increase its market share. Purchase of the memory chip and later setting up a manufacturing firm in the United States is quite a strategic expansion mode. This would not just increase its market share but also play an essential role in building its reputation (Barringer & Bluedorn, 2012).
The actions of Foxconn in pursuing its strategic approach to international markets is a prudent decision to make (Kaplan, & Norton, 2015). Its offer to buy memory chip business from Toshiba and its move to start a display manufacturing plant in the united state gave them more exposure to the international market. This, however, is accompanied by its consequences. Tere is benefits and limitations that Foxconn is likely to encounter in pursuing these actions. Essentially this expansion move is meant for expansion, sustainability and finds a domination in the global market domain. Some of the benefits that Foxconn is likely to face is increased market share, global market, increased sales revenue and total profit for the firm and gained an international reputation. Featuring into the worldwide market for electronic products, there are significant forces and players which may prove a big challenge to Foxconn in pursuing its actions through (Kaplan, & Norton, 2015).
Foxconn is likely to face high operational costs contrary to their expectations of increased profit. The fate for their decision can only be determined through implementation of their strategy, other market forces such as the competitors can render Foxconn Technology Group collapse due to the vast nature of the activities and operations accompanied in coordinating all these divisional plants (Wiersema & Bantel, 2013). They are likely to face market challenges in marketing their product. For instance, their move to start a manufacturing plant in the united states can meet trials to market their products in the U.S due to the other predominant competitors in the country.they seem to have failed in developing their strategic approach in its expansion and development. One of the significant failures could be the underestimation of related costs of challenges incurred in operationalizing the entire business scope. The strategic decision is meant for improvement and prosperity in the long run. Companies tend to invest heavily in implementing their strategies aiming to achieve bigger. However, the opposite is true. Failure to plan appropriately and cost management will lead to huge losses and reputational damages. Foxconn is likely to face significant challenges in the short rung, but it may reap hugely in the long run. Their decision therefore only make sense in the long run (Wiersema & Bantel, 2013).
References
Barringer, B. R., & Bluedorn, A. C. (2012). The relationship between corporate entrepreneurship and strategic management. Strategic Management Journal , 421-444.
Burgelman, R. A., Maidique, M. A., & Wheelwright, S. C. (2014). Strategic management of technology and innovation (Vol. 2). Chicago, IL: Irwin.
Hax, A. C., & Majluf, N. S. (1984). Strategic management: an integrative perspective . New Jersey: Prentice Hall;
Kaplan, R. S., & Norton, D. P. (2015). Using the balanced scorecard as a strategic management system . Massachusetts: Harvard Business School Pub (
Wiersema, M. F., & Bantel, K. A. (2013). Top management team demography and corporate strategic change. Academy of Management journal , 35 (1), 91-121.
