Introduction
Strategic management is a systematic analysis of the factors related with clients and competitors and the organization to generate the basis for maintaining most favorable administration practices. In addition, it is an approach that is related to formulating and implementing the main goals and initiatives used by a firm’s top management on behalf of owners. Furthermore, the formulation and implementation is based on the consideration of resources and an assessment of the internal and external atmosphere that the firm competes in (Hill & Jones, 2012, 21).
Therefore, this paper offers an overall direction to the firms in question and involves specifying their objectives. Moreover, the document tends to evaluate three analytical processes with respect to three mobile firms. The analytical processes are porter’s Generic Strategies, Porter’s Diamond and Bowman’s Strategic Clock. The firms in question are Microsoft Nokia, Samsung and Apple, based on the fact that they are the best known firms in terms of performance (Harrison & John, 2013, 36). Therefore, the outcome of the paper will entail how the models can be used by the three firms from a positive and negative perspective.
It is a company that designs, manufactures and markets mobile communication and media devices. It tends to distribute its products worldwide via its retail stores, online stores as well as through third-party cellular network carriers and value-added resellers. The services offered by the firm are iPhones, icloud and a variety of other accessories. Essentially, the Porter’s Diamond Model for a competitive advantage of nations was developed by the American scientist. The model was developed with the intention of enumerating to firms the significance of competitive advantage of the ability of firms to constantly innovate. The model is made up of five interline factors that a firm can use to integrate its strategic management in business.
Factor Conditions is a feature that Apple can use to describe the situation in a country concerning production factors which include infrastructure and skilled labor. In addition, the production factors are desirable because they are relevant for competition for Apple as a firm in the mobile market industry (Hill & Jones, 2011, 32). There is also the factor of home demand conditions that Apple Inc can use to describe the state of home demand for products and services made in a country. Related and supporting industries are another factor that entails the existence or non-existence of internationally competitive supplying industries and supporting firms. Essentially, it is where firms work together in order to reach their set target in the market (Rabin & Miller, 2011, 32). Firm strategy, structure, and rivalry factor is where the conditions in a country determine how firms are set up, managed and the characteristics of domestic competition. Last, but not least is the factor of government and chance. It ensures that the government is able to influence development and when interfering market development and unexpected events are described with the factor of chance.
Advantage and disadvantages of the model to Apple
The model is essential based on the fact that it enables Apple Inc to understand the comparative position of a nation in global competition. Apple is able to use the model for major geographic regions in terms of innovation. Basically, the model is there to ensure that the firm is able to generate a positive feedback on the market by coming up with better products and that are genuine (Hill & Jones, 2011, 7). Furthermore, Apple is able to come up with products that are good in terms of quantity and quality, and as a result, sustain the needs of clients on the market. Presence of related and supporting firms is another key strategy that has made the model significant to be used by Apple Inc.
The presence of successful government policies work well at Apple as there is an underlying determinant of national advantage that are present and reinforced by government actions. The outcome of the model in general on behalf of Apple is to promote the creation of competitive advantages. Managers can use the model during their internationalization efforts to determine if the home market can assist and sustain a successful internationalization effort. Apple is in the position of using the model to encourage their employees work harder and also stimulate the creation of better and well modified products (Rabin & Miller, 2011, 65). As a result, it generates the growth of the industry in the market. It is true as it is self-reinforcing system, which makes it presence in the market made Apple to be looked at in a positive perspective. In addition, it helps Apple to decide where to start their venture.
The disadvantage of the presence the Model is that if employees are not aware of how the model works, then the outcome will be difficult to interpret. Illiteracy of the model can generate a disruptive outcome to Apple if the management of the firm that permits new players who exploit chances arising from a reshaped industry structure is included (Hill & Jones, 2011, 11). Therefore, the understanding of the model is essential as not being aware of how it can be interpreted can lead to a negative outcome in the market. It is true as Apple as a firm would collapse based on the fact that employees might not understand its contents.
Microsoft Nokia
Microsoft has recently acquired a section of Nokia with the intention of making big changes in the way the firm operates in its management structure. Furthermore, the firm intends to fix the internal civil war dilemma. Essentially, Microsoft has to enumerate to the market that it has finally figured out how to fix its organizational civil wars that pit produce teams against product teams and causing product delay (Hill & Jones, 2012, 77). It is a path that is meant to make their collaboration a success story on the market. Their other strategic business approach is to invest in marketing entity as it is a path that will enable them to measure, respond and at the same time predict consumers’ preferences.
Spending to accumulate is designed to fix all the damages that has been made by investing in the right channels that will generate an outcome that is essential to the firm as a whole. In essence, the approach of Microsoft acquiring a section of Nokia is meant to enable the firm stay on top of all developments in this expanding narrative by following the set stream. Furthermore, Nokia also intends to concentrate on three key businesses that are network equipment manufacturing, mapping and location services (Hill & Jones, 2012, 57). Furthermore, the firm also targets to incorporate the presence of development and licensing of technology in the market.
Porter’s Generic Strategies with Microsoft Nokia
It is a model which is a framework used to outline the three major strategic options open to organizations that wish to gain a sustainable competitive advantage in the market, like the case of Microsoft Nokia. The three options need to be looked at by Microsoft Nokia especially within the context of two aspects of the competitive atmosphere. Essentially, the model entails that for Microsoft Nokia to create a competitive advantage, it ought to review their strengths and pick the most appropriate strategy cost leadership, differentiation or focus (Hill, Jones & Schilling, 2014, 29). The usage of the model in the firm will bring about a positive outcome in the market as it is designed to generate the needs of clients in the market. The generic strategies in question are cost leadership, differentiation and the focus strategy.
The Cost Leadership Strategy
It is a strategy that involves the firm’s aim to be the lowest cost producer within the industry. Basically, Microsoft Nokia can incorporate it to drive cost down for all production elements from the sourcing materials, to labor costs. It is a model that the firm can use to gain a competitive advantage. The cost leadership strategy brings about an increase in profits by reducing costs, and charging industry-average prices (Hit, Ireland & Hoskisson, 2014, 57). It will also assist Microsoft Nokia to increase markets share via charging lower prices, while making a reasonable profit for each sale because they will have reduced costs. Microsoft Nokia can acquire cost advantage by improving process efficiencies, gaining unique access to a large source of lower cost materials and evading some costs.
Differentiation Strategy
It is a strategy that calls for the development of a product that offers unique attributes that are valued by clients and that customers perceive to be better than or different from the products of the competition. If the suppliers increase their prices Microsoft Nokia may be able to pass along the costs to its customers who cannot find substitute products easily (Hill & Jones, 2012, 87). Essentially, it is a broad scope strategy based on the fact that the firm hopes that step being undertaken will appeal to a number of individuals on the market.
The focus strategy
Microsoft Nokia can use the strategy to concentrate on a particular niche markets and, by understanding the dynamics of that market and the unique requirements of clients within it come up with well-specified products for the market. Microsoft Nokia enjoys a high degree of clients’ loyalty, and the entrenched loyalty discourages other firms from competing directly (Hill & Jones, 2012, 31).
Advantages and disadvantages
The model can best be used by Microsoft Nokia via the use of the cost leadership strategy because it is a big firm. The strategy is significant based on the fact that Microsoft Nokia is able to command process near the industry average. Cost leadership strategy can be used as it offers the firm the ability to cut prices in retaliation deters potential entrants. Furthermore, it enables the firm to be looked at as better company as the firm is better placed when it comes to competing on prices (Rabin & Miller, 2011, 89).
The disadvantage entity about the model is that the choice of which generic strategy to pursue underpins every other strategic decision made by the firm, and hence its only worth spending time so as to get it correctly. One has to make the right decision concerning the best strategy for the business to be a success, and hence, it is desirable for the firm to be very careful for the model to succeed (Hill & Jones, 2012, 76). In addition, use of the cost leadership strategy which is the most appropriate for Microsoft Nokia requires a very detailed internal focus on processes. On the hand, the strategy of differentiation demands for an outward-facing and creative approach to succeed.
Samsung
It is a company that is mainly associated in the production of consumer electronic products. Their distribution is associated within domestic market and to overseas markets. It has been growing rapidly for the last ten years, and it is based in Korean exclusive historical and economic backgrounds (Nicholson, 2013, 54). The Company’s electronics have grown very fast in that period with the technological background. The presence of the triangle structure stands for the ownership, future strategy office, and the professional chief executive officers of subsidiaries. It tends to generate the fast decision making process and the backgrounds that influence them and diagnose their internal success factors with the specific cases.
Bowman’s Strategic Clock
Bowman’s Strategy Clock is a model used by a company while designing marketing strategy to evaluate its competitive position in the comparison to the offerings of competitors. The model is made up of generic strategies that represent the three ways in which a firm can compete other rival firms and offer clients satisfaction at a better price. The three ways are cost leadership, product differentiation and market segmentation (Steers, Sanchez-Runde & Nardon, 2010, 97). The significance of the model is that it shows the respective positioning of competitors competing in the market.
Samsung can use it to create a fair value for money line with competitors scattered along the line from low value-low price to high value-high price and around the line as well as some combinations of client value attributes. Bowman’s Strategy Clock expands Porter’s ideas into eight strategic options for firms to follow when comparing their competitive edge against competitors in the same way Samsung undertakes its tasks in the market (Chang, 2012, 44). The model goes to the extent of explaining the cost and perceived value combinations that are used by firms and identifying the likelihood of success for each strategy.
Low price-low value
Inferior products are used to attract clients with cost effectiveness. It is a segment with specific option and firms cannot chose to compete in this category. A firm can only chose this option if their product lacks differentiated value. Essentially, a firm can only apply this stage via cost effectively selling volume, and by attracting new and potential clients (Hill & Jones, 2011, 44).
Low price
Low price is a strategy that cannot be used by Samsung as its profit margin will become very low. Basically, if a company which is low cost leader have a large enough volume, it can sustain this approach and become a powerful force in the market. It is true as it is a strategy where the products are placed at the lowest possible price by hoping to balance the equation using high volumes (Newth, 2012, 45).
Hybrid positioning
They are interesting firms that offer commodities that offer unique attributes that are valued by clients. Samsung’s makes sure that the quality and value of product is good so clients are assured of a reasonable price. The outcome on the market is a combination that usually builds client loyalty for the particular brand in the market (Orcullo, 2009, 8).
Differentiation
It is a strategy that enumerates the product differentiation and how it is used for selling products in the market. Basically, a firm like Samsung develops phones that offer unique attributes that are valued by clients on the global market. Branding is the approach in this case which makes the firm to become synonymous with quality as well as a price point (Steers, Sanchez-Runde & Nardon, 2010, 17).
Focused differentiation
It targets specific marketing niches and it is used with the combination of high value at high prices. It is a strategy that operates in highly targeted markets and gain huge margins in the market. Essentially, it is a strategy that can be adapted by Samsung as it has a set target that is based on a global perspective (Hill & Jones, 2011, 76).
Increased price and standard product
It is a strategy that cannot work in a long-term scheme as an unjustified price premium will soon be discovered in a competitive market. In other terms, it can be looked at as a strategy that enables firms to raise prices without adding any value to the product. It is a risk approach as firm is likely to collapse if the market does not respond positively (Shinkle, Gooding & Smith, 2009, 12).
High price-low price
It can be implemented in a market where only one firm generates the goods. In the case of a monopoly firm, any price can be set and clients are likely to purchase and so nit is not desirable for firms like Samsung (Hill & Jones, 2011, 58). It is true based on the fact that apart from Samsung, there are other firms on the market that make phones.
Low value - standard price
It is a strategy that is in the position of making the firm collapse or loses its market shares. It can come about if the approach of keeping a low value product at a standard price is initiated in a competitive market (Shinkle, Gooding & Smith, 2009, 68). Essentially, the low value –Standard price strategy is not a useful strategy for Samsung in a competitive market.
Advantage and disadvantage of Bowman’s Strategic Clock
The model in general is significant for usage by Samsung as it will contribute positively to its success in the market. It is true as its incorporation of strategies is significant as they draw a better path that can be used by the firm to lure more clients for its products. Additionally, if a firm like Samsung uses the model as a guide, it can easily compare its products to other firms in the same industry. It is true as the model is designed to assist firms undertake their tasks knowingly (Afuah, 2009, 34). The model assists firms to analyze the cost and differentiation advantage that can help evaluate the competitive advantage that may be available for the firm.
The disadvantage concerning the strategies of the model is that the strategy of low value –standard price, high price – low price and increased price and standard product cannot be used by Samsung. The mentioned strategies under the model cannot be used because they can result in loss of market share. Based on the terms of price, raising prices at the wrong market will definitely generate a negative feedback on the market as it is not what the firm had anticipated. In addition, presence of raising the price for a commodity and the product has a low value among the users will definitely result in a negative feedback (Sadler, 2011, 47). Thus, all the mentioned strategies cannot all be applied by Samsung as they may lead to lose in the market.
Bibliography
Afuah, A, 2009, Business Models: A Strategic Management Approach, McGraw-Hill Companies, Incorporated.
Newth, F, 2012, Business Models and Strategic Management: A New Integration, Business Expert Press.
