Strategic Management in Dynamic Environments
Abstract
Evidently, organisations, that increasingly inhibit, dynamic environments, which have destabilizing forces such as globalized competition, entrepreneurial action, as well as technical innovation, operate with amplified frequencies (Michael, Ireland, and Hoskisson, 2010, page 81). The question that walks the talk in the field of strategic management of organisations and other entrepreneurial literatures is how firms can work towards achieving and sustaining competitive advantage over others. This paper seeks to handle this question through the development of a social website. Firstly, it will discuss the role of resources and capabilities in the formulation of strategies. Thereafter, it will analyse the resources essential to the development of the social networking website. Additionally, steps followed in linking resources and capabilities will be clearly formulated, with a clear explanation of how resources are linked to competitiveness. The paper will also reflect on other existing social networking website as well as its key resources. Henceforth, the paper will come up with recommendations on the strategies the company will employ before implementation of the social networking Web site.
Role of resources and capabilities in Strategy formulation
Strategy formulation revolves around management, through identification and matching of company’s resources and capabilities with an aim of achieving outstanding success (Robert, 2010). Deductively, strategy is significant for companies as they manoeuvre through unpredictable and challenging business environments. Strategies should focus on achieving competitive advantage of which capabilities and resources are the primary sources of competitive advantage. Resources refer to productive assets owned by a company while capabilities refer what a company can do, as perceived by both employees and customers (Stewart & Gregersen, 2011, page 75). Resources and capabilities play significant roles in strategy formulation as they form the basis of achieving a competitive advantage over competing companies. Capability focuses on issues concerning quality service and product delivery to customers hence ensuring that the company achieves outstanding performance. Continued use of capabilities makes them stronger, hence, making it difficult for competitors to imitate and understand hence offering your company an added competitive advantage. On the other hand, continuous development and creation of new resources in response to changing economic conditions guarantees a sustained competitive advantage (Stewart & Gregersen, 2011, page 66). Resources do not confer competitive advantage, but work hand in hand with organizational capability, which gives an essence of superiority hence competitive advantage.
Key Resources of a social networking Website
Social websites are undeniably the latest technological trend in the industrial sector. Development of social websites requires varied resource availability. The most significant resource requirement for social networking websites is technological resource availability. A company intending to establish a social networking site should have employees with the ability to apply any leading edge technology owned by the company practically. Ownership of copyrights for a social website is also an essential technological resource. Physical resource availability is also a key resource requirement for social networking website. This includes availability of a plant and equipments needed to start a social networking site. Financial resource availability is also a basic requirement for starting a website for a company. There is need of the company to source resources/funds essential in development of a social networking website (Michael, Ireland, and Hoskisson, 2010, page 76). Human resource further makes up the list of key resources needed for start up of a social networking web site. There is a need of trained and educated employees who can operate the technological devises used for social networking. The employees you choose should be loyal so as not to betray the company when it comes to ownership of copyrights for the web site.
Things to consider before selecting social networking website as a strategy (putting resources and capabilities to work)
It is essential to appreciate, identify, and evaluate the potential and contributions of a firm’s capabilities and resources in strengthening the competitive advantage of a firm. According to Lincoln (2009, pg. 141), the capabilities of a social networking site include using the website to-
reach an extended number of users thereby expanding the company base
Improve brand equity
Boost marketing potential and improve revenue generation
allow a platform for sourcing talent and
Improve employee and customer relationships through cooperation
the company architectural platform with highly developed back-end structures
Widgets used in customizing the social networking site
links to the original company website
Information storage
A dynamic user environment to facilitate benefits from organizational capabilities
Rich content, site design, and customizable layout
The results and analysis obtained provides a framework to be used to guide the process of formulating strategies to be used in the exploitation of internal strengths and as well, in minimizing the effects of internal weaknesses (Stewart & Gregersen, 2011, page 86). Finally, the firm should identify the ideal strategy that can be followed in developing the resources and capabilities.
Competitiveness and key resources
The competitiveness of a company is based on the superiority in its resources. Establishing a competitive advantage revolves around formulation and implementation of strategies, exploiting the uniqueness of a company’s portfolio of resources (Stewart & Gregersen, 2011, page 76). Key resources are linked to competitiveness in that it shows the existing gaps in resources availability and hence enable filling of the gaps building future capacities, which offer a platform for competitiveness (Robert, 2010). Human resource, for example, provides a basis for discussion on decision making, problem solving and learning, thus help in development of plans to support and enhance personal knowledge management practices hence offering a competitive advantage over other firms, which lack human resource endowment.
Effective strategy in identification of resources and capabilities is the need to carry internal analysis of the company. Resources refer to productive assets owned by a company while capabilities refer what a company can do, as perceived by both employees and customers. Examples of capabilities include teamwork, effective leadership, and strong product brands. The first step in putting resources and capabilities into use is to identify the key resources and capabilities. This involves a draw up of resources and capabilities available within an organisation (Stewart & Gregersen, 2011, page 79). Precisely innovation is the essential capability as it shows commitment to produce strong product brands meeting the customer’s needs. Effective leadership as well as tacit knowledge are other capabilities, which are essential in decision-making. On the hand, significant resources include technically competent human resource as well as financial commitment, which strengthen the company’s capabilities thus achieving a competitive advantage over competitors. Thereafter, you carry out an appraisal based on resources significant in offering a competitive advantage. This is whereby you carry out an assessment of the company’s resources to identify existing gaps in resource availability. Henceforth, you will look for opportunities to generate more resources. It is also important to carry out an appraisal based on the company’s strengths and weaknesses.
After the appraisal, you develop strategy implications aimed at exploiting the strengths of your resources and capabilities towards achieving competitive advantage over competing firms. It further offers a chance for you to manage the weaknesses of your resources and capabilities to increase the competitive advantage of your organisation. Externals analysis of the outside environment is also essential in putting up resources and capabilities (Stewart & Gregersen, 2011, page 58). This mainly entails analysis of probable factors that significantly have an influence on the business course. These factors include customer power, supplier power, intensity of competition, competition from substitute products, as well as competition from new entrants.
Social Networking Case Study: Boeing
An example of a social networking website is Boeing web 2.0, which is an Integrated Defense Systems group with an approach aimed at effectively utilising expertise for competitive advantage. Its main resource are company practitioners working together as a community, providing methods, tools as well as techniques significant in solving specified business problems (Michael, Ireland, and Hoskisson, 2010, page 73). Prior to implementation a company’s social networking web site, there are a number of strategy recommendations to be followed. Innovation should be the priority growth engine. This should be reinforced by high-level commitment evident by investment in scientific technological facilities, which ensure customer satisfaction as well as environmental sustainability. A mission should also be set aimed at creating new technologies, providing a platform for future growth. A radical strategy recommendation for the establishment of social networking site is the need for highly technically competent employees dedicated to quality service delivery.
Conclusion and Recommendation
In conclusion, strategy emanates from planned combination of available resources and capabilities aimed at providing an avenue for profit generation of an organisation. Social websites allow for identification of profit opportunities in diverse environments hence significant in strategy formulation in dynamic business environments (Cornelius, 2010, page 33). Nonetheless, strategies should focus on achieving mutual organisation satisfaction with appropriate adjustments in technological advancements. Henceforth, organisations leaders should build an organisational capability, which enables their organisations gain competitive advantage over other competing firms.
Why social networking?
Social networking website is the ideal strategy that should be adopted by the vice president given its ability of utilizing the resource capability of a firm to improve the competitive advantage. Integration of all stakeholders helps in the exploitation of internal strengths and minimization of the effects of internal weaknesses. Coupled with the effects of internet and information technology, the nature of communication amongst individuals has been transformed (Michael, Ireland, and Hoskisson, 2010, page 44). Leading firms around the globe have increasingly taken advantage of social networking web sites to reach more clients. Other benefits include expanded market base and marketing potential, more traffic, enhanced relationships, and enhancing the brand equity.
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