Resource based view (RBV) focuses on the internal factors that contribute to a firm’s growth and performance. It highlights the importance of firm’s resources and capabilities. Both of them will together form a competency that can create a competitive advantage. Resources can also be divided into tangible resources and intangible resources. Capabilities of the firm in utilizing the resources have a big impact on how a firm will be able to stand out among other competitors. Competitive advantage arises when a firm has a lower cost structure, products differentiation and niche markets. RBV also concerns in value creation in order to compete with others.… Read the rest
Strategic Management Tools
What is Strategic Innovation?
Innovative thinking can be applied to the strategic planning of an organization to create new opportunities and boost market performance. Strategic Innovation is the creation of growth strategies, new product categories, services, or business models that change the market and generate significant new value for consumers, customers, and the organization. Strategic Innovation takes the road less traveled – it challenges an organization to look beyond its established business boundaries and to create possibilities in an open-minded and creative environment. It has been seen that focusing on the short-term aspects typically yields short-term results, however, firms seeking to make significant breakthroughs identify both, big and innovative ideas.… Read the rest
Strategic Marketing Tools – Ansoff Matrix and BCG Matrix
Ansoff Product-Market Expansion Grid
A useful planning tool in respect of markets and products is the matrix developed by Igor Ansoff, who is regarded by some as the ‘Father of Strategic Management’. Fully titled the Ansoff Product-Market Growth Matrix, the tool was first published in Harvard Business Review, 1957, in Ansoff’s paper Strategies for Diversification.
The Ansoff Product-Market Expansion Grid or Ansoff Matrix helps to understand and assess marketing or business development strategy. Any business or part of a business can choose which strategy to employ, or which mix of strategic options to use.
This is a fundamentally simple and effective way of looking at strategic development options.… Read the rest
Reducing Resistance to Organizational Transformations
Every organization goes through a period of change and development at one time or another whether these be big organization mergers, such as companies being bought out such as when Coca-Cola bought Costa coffee for 3.9 billion pounds, or small changes such as an alteration to a software a company uses or the development and implementation of autonomous machinery that helps create an increase in productivity. It has long been argued that companies should apply a participative dialogical approach to manage these changes to help prevent resistance to these changes. However, there is the possibility that this will be resisted due to psychological reasons or self-interest.… Read the rest
Moving to Blue Ocean Strategy – Shift from Red Ocean to Blue Ocean
In global market today, it can be supposed that there are two typical kinds of oceans: read oceans and blue oceans. Of two sorts of market, red oceans are defined as a known space for all existent industries nowadays. On the contrary, blue oceans are regarded as an unknown area for industries which do not exist.
As a result, red oceans present all existing rules related to business competition and industrial regulations. This market defines and determines the boundaries for all games and rules. In this market, companies strive to compete with their competitors and rivals in order to gain better benefit and dominate more market share of current demand.… Read the rest
What are Dynamic Capabilities?
Concept of Dynamic Capabilities of a Firm
A dynamic capability refers to company’s ability to integrate, build and transform internal and external competencies. They can help an organization to achieve innovative forms of competitive advantage through integration, building and transformation of internal and external competencies, as to respond to changes in the environment. This management theory was defined by David Teece, Gary Pisano, and Amy Shuen in their 1997 paper Dynamic Capabilities and Strategic Management. In the context of achieving organizational change, aligned to the external pressure: namely, these capabilities are perceived as business processes that use resources — specifically the processes of integration, restructuring, acquisition and release resources — to adapt or create market changes.… Read the rest