Strategic Management in a Globalized Economy

Strategic Management in a Globalized Economy

To start a business, it is important to have a strategy whether is to set business priorities, plan for growth or determine a product roadmap. When a company generates a strategy that is sustainable and above industry average profit, the business can thrive. By recognizing the competencies of the company and leveraging them is a way to achieve a competitive advantage. Company’s strategic approach should also be designed to fit its own industry environment.

While there are many routes to competitive advantage, by giving buyers what they perceive as superior value compared to the offerings of rival sellers. Company has to be able to set itself apart from rivals by emphasizing the unique aspects that make the product superior or unique in order to compete and stand out in such a highly competitive market. According to Porter, innovating new products that creates values is the way for companies to gain sustainable competitive advantage and improve overall performance (Samuel, Siagian, & Octavia, 2017). With that said, adopting differentiation strategy is a great way to achieving competitive advantage as it has become an essential in today’s financial climate (Investopedia, 2018). By focusing on the cost value of the products and creating a perceived value among current and potential customers, it can help to build brand loyalty, which is critical to a business. Moreover, it is also important to provide a high quality product because if the customers do not perceive the value, they will turn to the competitors no matter how unique the product is. Knowing and understanding the customer’s needs is the centre of successful business as everything in marketing starts with identifying customer needs and address those needs by innovating (Ranjith, 2016). Hence, incorporating features that will enhance buyer satisfaction such as linking the competitive advantage to customers needs and desire will help to persuade potential and or existing customers to purchase the products (Porter, 2014). The company will continually innovate to enhance business and create competitive advantage as well as address those wants and needs of customers to build brand and maintain the position (Distanont & Khongmalai, 2018).

Other than the differentiation strategy, best-cost provider strategy is also another great way to aim at giving customers more value for the money by delivering superior value to buyers and satisfying their expectations on the quality or features comparing to competitors. Company not only will acquire the resources to incorporate upscale attributes at a lower cost than competitors but also develop and provide a products that delivers good quality to achieve competitive advantage with best cost provider strategy (Porter, 2014). While to implement this strategy, company will also create an effort to cut costs across the value chain, reducing the overall costs by outsourcing to retain the best provider cost differentiation, at the same time, adding features to the product offering to provide customer with value that is on par with products in the market (Turner, 2019)

Besides than having a good business strategy, developing an effective vision and mission statement is also one of the most important tasks for an organization because it provides a road map and serves as a guide for creating goals and objectives in the organization. The vision statement for the company will be compatible and would describes the inspirational and long term plan for what the company will be able to achieve as well as represent the creation of value for the customers. In addition to that, it would have the ability be to motivate the business teams as well as customer and are unique enough to distinguish from other businesses. As for mission statements, it would define the purpose and objectives of the organization, which reflect the direction that the organization is heading and the values that reflect into the world (Hawthorne, 2019). However, when creating vision and mission statement, company should first understand and define the issues that matter most to the people in the community as it is vital for the development of a strong and effective group. Other factors to consider while creating vision and mission statement is to consider the company goals and what the strategy will be as setting goals is the first steps of the plan. Company should develop a clear vision and mission statements because they act as a compass that show and guide where the organization is heading. It can be a powerful tools to lead the organization forward (Vanderelst, 2017). Another factors to consider in creating a company vision is defining the company’s values as it is absolutely critical in setting the direction for the company and business team. Company’s values can influence everything the company does from the hiring process to the products it offers. And it has been proven that companies that form core values were able to create a foundation of practices that will lead to the enhanced long-term success of the firm (Osborne, 1991). Hence, it is important to build a strong foundation of an organizational culture.

Environmental analysis is a critical part of the strategic management planning process (Pickton & Wright, 2001). To evaluate a company’s competitive position, the company will conduct a SWOT analysis to identify the strengths, weaknesses, opportunities and threats relevant to the e-commerce business. Because that E-commerce is such a competitive market, the company will need to build its strength considering the rapid development