BUSINESS STRATEGY ASSIGNMENT
Business Strategy Assignment: Razer from Singapore
Razer is a private company that has been designed in the basement of one of the owners in order to cater for the changing need of the modern gamers (Razer, 2016). According to Hitt, Ireland & Hoskisson (2007, p. 79), a successful company is able to create a strategy that is built on the competencies and available resources. Therefore, this paper will provide a discussion of Razer’s current performance, then delve into the Industrial Organization (I/O) and the Resource-Based (RBV) models in order to evaluate the business strategy of Razer, and, finally, conclude about the lessons learned.
Razer is obviously utilizing its labor as well as capital well, and its strategic success can be seen from its worldwide presence and customers’ recognition. The most important approach adopted by Razer is its personal connection to every gamer, which is maintained by the team of employees who are the same gamers and have similar preferences. Most importantly, they understand their target audience perfectly.
The Industrial Organization (I/O) and the Resource-Based (RBV) Models
The I/O model is used to assess the organization’s external environment (Hitt, Ireland & Hoskisson 2007, p. 14). This model relates to the Razer Company extremely well, especially because it is operating in the industry with high potential for above-average returns (Hitt, Ireland & Hoskisson 2007, p. 14). Moreover, according to the I/O model, the firm has identified the strategy in the chosen industry that would produce an ability to earn these above-average returns (Hitt, Ireland & Hoskisson 2007, p. 14). In particular, Razer decided to focus on the personal connection between its employees and the customers in order to provide premium quality services as well as innovative gaming solutions (Razer, 2016). After the strategy has been established, the organization had to acquire the skills and assets needed to implement this strategy (Hitt, Ireland & Hoskisson 2007, p. 14). More specifically, Razer decided to focus on its workforce as well as their knowledge of the innovative solutions (Razer, 2016). The company has indeed managed to implement the abovementioned model well along with the continuing provision of services and unification of all devices.
What concerns the Resource-Based Model of Above-Average Returns, it is also applicable to the case of Razer. At the beginning, all core competencies that the company had were its talented employees. With a very specific and limited supply of resources, the founders managed to focus on the capabilities of their company (Razer, 2016). The tricky task was to establish a strategy for which there would be sufficient resources and which would not be too ambitious. However, the management of Razer carefully examined the resources as well as capabilities of the startup and determined a strong competitive advantage that would be guiding them throughout the company’s growth stages (Hitt, Ireland & Hoskisson 2007, p. 17). However, the only inconsistency when it comes to the RBV model is the fact that it places strategy formulation and implementation at the last stage of the process (Hitt, Ireland & Hoskisson 2007, p. 17). Razer, on the other hand, established a viable strategy as soon as the idea of the firm was born. Therefore, they have adapted an existing tool to cater for their needs and enjoyed great success.
The Lessons Learned
All things considered, the abovementioned models can be quire useful during the internal as well as external analysis of the company in question. What concerns the external factors, they affect the competitive decision of the company (Hitt, Ireland & Hoskisson 2007, p. 40). Razer is in a good external position because it is able to adjust to the changing demands of the customers quickly (Razer, 2016). The constant fine-tuning of goods designed by gamers, for gamers, provides a personalized approach that puts Razor at the forefront of the industry (Razer, 2016). What is more, Razer has created a real community of gamers who are able to connect and synchronize their devices regardless of their location. Such success that is enjoyed by Razer is not accidental. An efficacious implementation of the I/O model has allowed the company to thrive for many years. Of course, it is not the only step required for organizational effectiveness. The model has to be revised and adjusted from time to time on the basis of external environment as well as internal capabilities. Such spheres as economic, physical, sociocultural, global, legal, political, technological and demographic (Hitt, Ireland & Hoskisson 2007, p. 41) are the most important aspects of the external environment, which is dynamically and constantly changing.
When it comes to the internal analysis, the firm has to begin with the sources that it has. With the help of its capital as well as labor, the company is able to create value (Hitt, Ireland & Hoskisson 2007, p. 80). It is not necessary to establish the business strategy at this stage, but Razer managed to do so successfully (Razer, 2016). Capabilities as well as core competencies created by the resources of the firm can be combined to produce an efficient competitive advantage (Hitt, Ireland & Hoskisson 2007, p. 80). Only those capabilities that are rare, valuable and hard to imitate will create value (Hitt, Ireland & Hoskisson 2007, p. 99). Afterwards, based on the already or newly designed strategy, strategic competitiveness emerges (Hitt, Ireland & Hoskisson 2007, p. 80). All things considered, Razer managed to capitalize both on its internal and external strengths with the help of O/I and RBV models.
References
Hitt, M., Ireland, R. and Hoskisson, R. (2007). Strategic management. Mason, Ohio: Thomson/South-Western.
Razer. (2016). About Razer. [online] Available at: http://www.razerzone.com/about-razer/ [Accessed 15 Aug. 2016].
