Discussion 1 peer responses.
Respectfully respond to these students posts about how does strategy formation differ from a small vs. a large organization? How does it differ from a for-profit vs a nonprofit? Use 200 words when answering to each student. Start off by saying “Hello(name)”.
Marie
Strategy
formation is important for all kinds of organizations, irrespective of
their size. However, the approaches of strategy formation differ between
large and small organization. This difference in strategy formation
between large and small organizations depends heavily on the core factor
of strategic planning, which is the business environment. Large
businesses approach strategy formation with more focus on the external
environment because it already has developed strengths and efficiencies
necessary to run its internal environment. Large businesses have
well-established internal business environment, through acquiring the
best experts to manage its various departments and leveraging internal
resources with great efficiency to overcome the challenges that would
come about in the external environment. Additionally, large
organizations have better control over the internal controllable
environment than the external unpredictable and uncontrollable
environment.
Small
organizations, on the other hand, approach strategy formation with more
focus on the internal environment factors. The small organization
focuses its strategy formation practices on the internal environment
because it is yet to develop sufficient competencies and is likely to
collapse due to extreme pressure from the external unpredictable
environment. More specifically, small organizations have limited risk
management competencies compared to larger organizations, because they
lack sufficient internal resources and expertise that can handle the
ultimate effect of uncertainties both in the external and internal
environment. Small organizations risk collapsing if they do not focus
their strategy formation in strengthening internal departments,
functions, and processes, and it would bring about a situation where the
firm would be shooting without proper aiming. A profit organization would engage strategy formation with more focus on activities that would generate the highest amount of income possible for the organization. A non-profit organization would engage in strategy formation with more focus on activities aligned to its goals that may not entirely generate high levels of income, but high levels of goal achievement.
Jenny
There
are a few ways strategy formation differs for a small versus a large
organization. For one, with small firms, the process is usually more
informal. This is due to its size and limited resources compared to a
large organization. In addition to this, in a large firm, there are four
levels of strategy making: corporate, divisional, functional, and
operational. On the other hand, in a small firm, there are only three
levels: company, functional, and operational (David et al., 2020). As a
result, a large organization requires coordination of resources and
communication amongst more levels and people to accomplish their
objectives. Strategy formation for a large organization is more complex
and the process may stretch over a longer period of time.
The
first difference between a for-profit and a nonprofit organization is
the existence of shareholders. When formulating and implementing
strategies, for-profit companies need to take into consideration what
will return dividends to shareholders. In some cases, shareholders may
also be investors that have lent money to the organization. Therefore,
for-profit companies might rely on additional funding from investors to
move forward with a strategy. However, with nonprofit organizations,
their focus is to have enough money to fulfill their purpose and
continue operations. Furthermore, for a for-profit company the people
who are involved in strategy making are part of the organization while
for a nonprofit company the people involved include employees and
volunteers. For the latter, strategy formation can be more challenging
since with employees their main priority is the organization but with
volunteers, they may have other obligations outside which means less
time to contribute.
Reference
David, F. R., David, F. R., & David, M. E. (2020). Strategic management: A competitive advantage approach (17th ed.). Pearson Education, Inc.
Discussion 2 peer responses.
Respectfully respond to these students who answered the question: Could a firm simultaneously pursue focus, differentiation, and cost leadership? Should a firm do this? Why or why not? use 200 words when answering to each student.
Elizabeth
When a firm may be able to pursue cost leadership and differentiation simultaneously
Each
of these are mutually exclusive and a firm needs to choose which one it
would like to pursue, however it has been conceded that under certain
circumstances it may be possible by Porter he also outlines only three
conditions which a firm may be able to achieve cost leadership and
differentiation simultaneously.
In
a situation where the competition is inefficient including where a
particular firm is so far advanced from its competitors or the
competitors are ineffective, so that it has not made the choice yet
between leadership or differentiation.
Also,
in a situation where a firm is pioneering a successful major
technological innovation. A significant technological innovation can
open such a gap between a firm’s performance and that of its
competitors, that both cost leadership and differentiation can be
pursued concurrently.
In
a situation where cost is strongly affected by structural
interrelationships or the possibility of sharing between industries
exists. If it is correctly positioned a company can reduce the cost of
differentiation through a sharing of the cost of by exploiting important
relationships.
Jenny
A
firm could simultaneously pursue focus, differentiation, and cost
leadership. However, for many organizations, if not most, implementing
all three is not the best option and in some cases actually hurts the
business. Aiming for every aspect is complex and more difficult than
various companies can carry out. Cost leadership entails keeping costs
down and offering low prices to consumers but at the same time
differentiation involves providing something unique and in order to do
that it more often means raising specific costs and prices. Also, the
process may require more resources, such as funds, employees, or
technology, which organizations are limited on. Furthermore, companies
need to take into consideration of the products and services that they
offer. With Porter’s focus strategy, firms concentrate on a niche
market. However, there are certain products and services where
organizations may realize greater profitability catering to a broad
target market rather than focusing on a narrow target market. For
example, a company that sells toothbrushes and toothpaste. Since these
are products many people in the world use, it might be beneficial to
market to a broad audience. Finally, firms should look at what their
consumers’ interests are. If an organization offers a luxury product or
service then customers might not be concerned so much about price but
more on the quality. Therefore, cost leadership may not produce an
advantage for the company. On the other hand, if another organization
provides everyday products and services their customers might not be
concerned about them being unique but rather if it is affordable. While
pursuing focus, differentiation, and cost leadership could allow firms
to obtain the benefits of each strategy, ultimately for many, the
optimal course of action would be to concentrate on one.
Draft Statement of Preliminary Findings
Assume
you are a strategic consultant for the firm you chose as your case.
Create a draft statement of your preliminary findings to the board of
directors that summarizes your long-term strategic action, if any. You
will have the opportunity to change this strategy as you conclude your
final case work. But for now, the board wants to know what your thinking
is so far. Add to the Discussion Board.
Peer Review a minimum of two projects
Post
a peer review on the discussion board to at least two classmates
regarding their assignment post, adding value to their work or offering
recommendations.
*The case I choose is attached below and once again use 200 words when responding to each student. use 300 words when writing the draft statement.
Marie
Strategic
planning can be designed for long term objectives of Gap. INC. company.
This post will be made for the framework that can be made for the
company. This discussion will go to the board members for final
decision. In this pandemic situation outsourcing has reduced a lot and
due to that the company is facing huge problem (Teixeira & Junior, 2019).
Long-term strategic planning will be helpful to make the framework
suitable for the organization. Strategic framework is beneficial to
evaluate the current situation and according to that intervention will
be implemented in the business. The strategies must have included with
all the components that will solve the problems as well as it will be
beneficial for making decisions for Gap. INC. company. Gap. INC. company
should have taken review from the employees who are working for the
organization. By analyzing the entire situation, executive can do
necessary changes and make the planner according to the change (Xie et al., 2018).
Strategic planning will increase critical thinking within the employees
who are associated with the project. The management and employees can
have a discussion regarding strategic planning and decision can be made
after that.
Reference
Teixeira, G. F. G., & Junior, O. C. (2019). How to make strategic planning for corporate sustainability?. Journal of Cleaner Production, 230, 1421-1431.
Xie,
F., Liu, C., Li, S., Lin, Z., & Huang, Y. (2018). Long-term
strategic planning of inter-city fast charging infrastructure for
battery electric vehicles. Transportation Research Part E: Logistics and Transportation Review, 109, 261-276.
Jenny
Dear board of directors,
As
the strategic consultant for Spirit Airlines, Inc., I would like to
bring to your attention findings that will be of interest in regards to
the company’s long-term strategic action moving forward.
In
the last several years the company has expanded to new routes and
destinations and plans on continuing to do so. Accordingly, it would be
beneficial for Spirit to adopt a market penetration strategy. Since the
organization’s target market is price-conscious leisure travelers, it
will be essential to increase advertising expenditures and publicity
efforts to reach consumers. Secondly, the company should look into new
training programs for employees. For a number of years now Spirit has
been one of the top airlines in the industry when it comes to receiving
customer complaints. To address some of these complaints, training
programs should place focus on providing better customer service and
more communication. Lastly, I suggest the organization consider the
possibility of forming a strategic alliance with a foreign carrier for
international flights. Spirit can contribute their technology while the
foreign firm can provide opportunities to gain local management in their
country. While these proposals may seem to conflict with the company’s
well-established strategy of cost leadership, spending more in the short
term will help the organization save money and cut costs in the long
term during its expansion internationally.
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