A competitive advantage puts an organization in a position to remain ahead of the competition in all business seasons. It enables the organization to achieve superior margins that surpass its competitors, which in turn generates value for the organization together with its shareholders. It is impossible to duplicate an organization’s competitive advantage. For instance, an organization could attain a competitive advantage by accessing limited raw materials. It could as well have highly skilled labor and a unique geographical position to access more clients in its target market. There are different ways that the management can adapt to in achieving the completive advantage, which includes differentiation, low costs, and response strategies.
The management can achieve a competitive advantage through differentiation to gain the upper hand in the competition. This strategy can be achieved by adapting to low costs as a major practice to set the business apart from its competitors. Differentiation occurs when a business uses one or a variety of strategies that are highly marketable which are already in the company’s possession which can give them an upper hand in the competition. The organization then looks for the market segment that values the attributes, and it spreads its sales. Additionally, differentiation can take place in a different dimension when a business conducts research that helps it determine the kind of goods and services that are most preferred by the consumers, and it comes up with a specific niche market that accommodates the specific goods and services.
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Cost differentiation can be achieved by the management by offering the same products as its competitors but at a lower cost. An organization must come up with means that can enhance low production costs, and this can be achieved by utilizing the available resources in an efficient manner in comparison with the competitors. Certain additional factors such as more efficient technology can enhance low production costs to lower the price of goods and services. The management can adapt to the cost leadership strategy as an offensive strategy to get rid of the competitors out of the market by using price strategies to win over more consumers and to stay ahead in the competition.
Response strategy differentiation is whereby the management comes up with a set of actions and decisions which result in the formulation and implementation of new effective plans to achieve the organization’s objectives and to keep it ahead of its competitors. The set of plans that the management comes up with must fit strategically to the new dynamics and complexities of the shifting business environment. A competitive organization must come up with new system implementations that enhance continuous interfaces and interactions with the external environment. Strategic responses include the strategies taken by a firm that is triggered by the continuous changes within the external environment of the business. The strategy achieves organizational long-term competitive advantage as it takes advantage of new resources in the changing market to fulfill its clients’ expectations. Non-response could lead to the loss of accumulated profits and enhance the high costs of reversing such losses.
Question 2
The current working hours are 6 and she produces 20 ornaments in a day.
Productivity is the number of daily ornaments/ the current working hours
=20/8
Productivity P1 = 2.5 Ornament per hour.
The current working hours = 8
The Number of Ornaments after the use of hot glue gum = 30
Productivity P2= (Number of ornaments produced by the use if hot glue / Current
Working Hours)
= (30/8)
Productivity P2 = 3.75 ornaments per hour
Productivity without the use of hot glue gun P1=2.5 Ornament per day
Productivity with use of hot glue gun P2 = 3.75 Ornament daily
The percentage increase = (change in productivity)/2 8* 100
= ((3.75-2.5)/2 * 100)
= (0.625 *100)
Percent increase in productivity = 62.5%
Question 3
The four main global strategies include multinational, multi-domestic, global, and transnational strategy. A multinational corporation involves a firm that conducts business in more than one country. For instance, Walmart indulges in annual global sales that are larger than their economy’s dollar. International strategies help an organization in stretching beyond its borders. Such practices are meant to enhance good bilateral relationships among countries and to utilize the market opportunities in the other countries.
Multi domestic strategy is whereby a firm emphasizes responsiveness by sacrificing efficiency within its markets. For instance, MTV does not force international viewers to watch American shows, but it customizes its programs with many countries for the international consumers to watch by their own will. As much as the product can reach a wide pool of clients globally, they make the ultimate decision on whether or not to consume the product without any influence from the organization.
Global strategy is whereby a firm will sacrifice to respond to local requirements within its target markets to attain efficiency. The company might make some minor adjustments to the product or service in different markets to gain global economies of scale. For instance, Microsoft provides the same software services but in different languages depending on its market.
Transnational strategy occurs when an organization seeks to have a middle ground between a global and multi-domestic strategy as a way of adjusting local preferences in different countries. For instance, KFC has the same brand name and menu across the globe. It is, therefore true to say that KFC equally meets the needs of its consumers at an equal price globally.
