Introduction
Strategic management entails a revolutionary mode of management and is perceived to be the most essential aspect in organizational management. It gives a statement of where the business intents to be in future and sets the necessary framework to attain the objective. Strategic competiveness entails the capability of an organization to outdo its competitors and apply the necessary strategies surpassing those of the competitors. It entails proper market planning and analysis, from where the firm puts in place strategies, which enable it to attain a competitive advantage in the industry. To attain a competitive advantage, the organization should come up with a strategy from external as well as internal environments of the organization. The external environment presents to the firm the competition level it faces and helps it in formulation of strategy. On the other hand, the internal environment dictates the available resources for implementation of strategy. This paper will discuss strategic management and strategic competiveness in relation to Eaton Corporation.
Eaton Corporation
Eaton Corporation has being operation for more than hundred years. This organization deals with electrical, mechanical and hydraulic technologies. It has emerged as among the leading technology giants globally. In 2012, Eaton Corporation reached $16 billion in sales across the world. This company operates in more than fifty countries worldwide and has more than seventy thousand employees. This company enjoys a global presence with key technological companies looking for its services and advice since it is significantly efficient. The vision of the company is to be the most admired company in different markets and has a mission of providing efficient, safe, reliable and sustainable power management solutions to its global customers.
Impact of Globalization to Organization
Production and markets globalization has significantly affected Eaton Corporation. First, market globalization had increased the client base of Eaton Corporation and this explains the increase in sales. Additionally, globalization has as well necessitated that the organization change its operation modes. In more than fifty-two countries, the organization has many foreign development investments; therefore, it has embraced diversity in its management strategy.
The organization has employees from diverse cultures and origins; the strategies of diversification of Eaton Corporation take in different opinions, ideas and cultures of its employees to attain teamwork and meet the organizational goals. Because of globalization, the organization has changed its system of management from ethnocentric methodology to a geocentric approach. Through this, it has integrated the culture in the countries of its Greenfield investment in the management it employs. Production globalization has been beneficial to the organization since it now has the capability of outsourcing resources from countries where they are cheaper and hence reducing its operation cost that has had a general impact to increase its profitability (Melissa 2010).
Markets globalization has led to unparalleled competition for the company. Eaton Corporation faces firm competition from other leading technology countries such as Japan. This has made is needful to implement strategies to ensure competitive advantage for this company (Melissa 2010). Among the strategies that have been enforced to this effect are diversification, innovation and differentiation. Irrespective of the high competition level, the company has had the capability of achieving stability in its sales.
Technology Change Impact to the Organization
Technology has enhanced the organizational efficiency, cutting down of production cost and increased sales. It has been among the leading organizations on technological innovation, and this has been used for developing a competitive edge. Key leaders in technology have sought for assistance from Eaton Corporation to improve their products due to the efficiency of the products from organization due to its high-tech nature. Eaton Corporation has aligned itself with technological changes and used them for creating its competitive advantage.
Industrial Organization Model Assessment of the Organization for Returns above Average
The I/O models explain the dominance of the external environment in determination of the strategic actions of a firm. The major inspiration behind the model of Industrial Organization is competition. The firm’s performance in this industry is to be determined by factors like production differentiation, diversification, economies of scale, degree of concentration of firms and barriers to entry. The organization can only earn above average returns through formulation of strategies that are adherent to the industry competition.
Products differentiation enables the organization to attain greater sales as compared to those competing with it. The company ought to embrace admirable features in its products to attract potential customers. The firm should also diversify its operations to have a competitive advantage. It should deal with varied product line to the extent that a loss of a single brand is compensated by profits from another brand. Additionally, diversification should as well be in personnel whereby the organization ought to outsource talent to ensure that its skill surpasses that of its competitors. Economies of scale can as well make it possible for the organization to get huge sales, purchasing inputs at large scale will enable the organization to get high trade discounts. This will considerably cut down its cost of operation and accordingly allow it to attain above average sales (Porter, 1998).
Organizational Resource Based Model Analysis
Contrary to the I/O model, resource based model centers on the internal environment in attaining competitive advantage. Resources to be considered by an organization in the determination of its strategic action comprise of labor force skill, managers’ competency and availability of capital. The organizational competency to attain above average returns is dictated by the ability of the firm to formulate strategic actions based on the available resources.
Therefore, Eaton Corporation ought to come up with its strategy in line with the available resources; the actions plans it puts in place should be within its abilities. It ought to consider its SWOT analysis prior to making a move in its strategies since strategies outside the company resources have high likelihood of failing. The organization can still make its strategies better through enhancing its resource base. Organizational skill can be enhanced through organizational poaching to get better talent. Availability of capital can be improved through technology utilization to enhance the capital efficiency. These actions will enable the organization to attain above average returns irrespective of the stiff competition in the industry.
The organization’s vision is to be the most admired organization in the different markets it operates. This enhances its success as it tailors its products to fit and surpass the expectations of its customers, and this has made it possible to maintain high sales level. The organization’s mission is to offer efficient, reliable, safe and sustainable power management solutions to its global customers. This has as well enhanced its success since its products meet the preferences of customers together with standards and in turn, they have developed loyalty to them and as a result maintained high organizational sales (Verma, 2009).
The organization’s stakeholders entail the management, employees and the customers. The customers are contributors to the organizational success through the purchase of its products; the employees have worked as a team towards the organizational vision while the managers have ensured that there is outstanding performance by managing people and resources efficiently.
References
Melissa A. S. (2010). Strategic Management of Technological Innovation, 3/e, New York University, McGraw Hill New York, NY. ISBN: 007338156x
Porter, E. P. (1998). Competitive advantage: Creating and sustaining superior performance. New York: Free press
Verma, H (2009). Mission statements- a study of intent and influence, Journal of Services Research, 9, p 153-172.
