What is Strategy?
In order to understand what strategy is, it’s important to know the origin of the word, guess what, Strategy comes from the Greek word “Strategos” which means the art of general. Now this word signifies the art that is associated with the general i.e. the art of war. Similarly setting up an organization in the growing and competitive market is nothing but a global war of business. Where the main goal is to conquer the market and achieve high profitability (Amit & Zott, 2012). In order to understand what strategy is one has to understand the difference between strategy and tactics. For example: If a leader suggests the following:
- Pursue a global strategy. Or,
- The main strategy is to integrate set of regional acquisition.
Here if the above-stated suggestions are considered closely, one thing can be found common between them i.e. those are tactics and objectives they are merely strategies. A strategy is something that turns out to be an action or move that helps in attaining these goals and objectives. So a leader must be efficient enough to understand and distinguish between strategy and goals. In order to formulate an effective strategy, it must cover the four most important aspects. The first one is where to compete, the second one is what is the unique value that is required to bring up to win the market, third is what are the capabilities of the resources that are required to bring out a unique product and fourth is one of the most important aspects is in sustaining to provide the unique value (Bharadwaj et al., 2013). If these four aspects are considered then bringing out effective strategies are easy and clear to provide a boost in achieving the goals.
Section 2
Organizations like electronic and technologies whether new or old must use strategies like discussed above so that they can have a clear idea for choosing the right place to compete and find what’s missing in the market. By taking up these two nodes one can clearly get an idea of where to start from and what to do. All one has to do is lookup for capable resources that can help to bring about a unique product in the market so that none of its imitations can come up by any other rival organization. Creating a product is not the only thing an organization has to look into it also has to look at the ways to sustain in providing products of such unique value to its customers (Cucculelli & Storai, 2015). Therefore, looking into the right aspects is important while formulating strategies that help in achieving the goal as well as capturing the market gradually. So organizations must adapt those key four points to attain their target. There is always a chance of imitation of a good product so such organizations must always adapt efficient mass-production techniques to eradicate any possibilities that lead to imitation of the product in future. Securing the uniqueness will help in bringing out a most wanted product in the market and becomes an obvious choice for the customers globally.
Activity 2
The captioned video (https://www.youtube.com/watch?v=B4ZSGQW0UMI) talks about the business model innovation.
Section 1
1) How innovation works in your Industry?
Business environment has seen many successful industries like Nokia and Kodak fail. The top managers fail to see why healthy and successful organizations fail suddenly fail even though they have maximum resources, top employees and profound knowledge of their market. The reason behind this is, the organizations didn’t pay attention to re-innovating their business models to create something new. They were so busy managing their daily business and serving the present clients that they barely had time to re-think about their future. Most of the time, it has been observed that the managers and employees get too caught up in doing their daily activities that they almost forget their future aspects (Casadesus & Zhu, 2013). In other words, they were so busy in embracing their present success that they didn’t care for the future. So it can be said that the present success is the enemy of future success. Innovation factor spins very rapidly in almost all types of industries. Innovation or creative thinking can lead to two ways i.e. it can increase the value of a product or service or it can lower their costs. Therefore, it creates a competitive advantage for the organization. For example, Apple, with its new innovative products creates high perceived value for the customers while the company Dell reduces its working capital & cost through different built order processes. There are many myths connected with the concept of innovation such as innovation is formed from ideas that nobody have had before, success requires more resources and innovation is always based on intriguing technologies. These myths are actually proved to be wrong (Sabherwal, Hirschheim & Goles2013). IBM did not invent the first personal computer or Apple did not invent the MP3 technique and Amazon did not invent the online bookstore concept. The basic key reason behind the success of Apple, Amazon and IBM is they learned and combined the new inventions and reinvented their own products while the actual developer perishes away. One more example of innovative business thinking is CISCO, it had almost no R&D resources but it went on to build the largest research lab in the world.
Section 2
Why and how to revolutionize the current business model?
14 out of 25 top business firms have revolutionized their business models. Organisations like Google, eBay and Amazon are successful only because of their new business model not just their new technologies. A business model innovation provides answers to a few questions like who are the targeted customers, what do they offer to them, how to create the value proposition and how to generate revenue. A new model changes at least two of these factors. The managers have to focus on one question that how can a business model innovation in another industry revolutionize their own industry? A total of 55 business model patterns have been recognized. For ex- Gillette provides cheap razors and expensive blades and this technique was copied by Espresso by providing cheap coffee machines to give expensive coffee (Cucculelli & Storai, 2015). The business model innovation has 4 steps Initiation, Ideation, Integration and Implementation. Initiation is analyzing the current business model, Ideation is confirming this model with 55 business model patterns while learning from other industries and connecting their ideas, in Integration consistency of business model is checked and finally in implementation this current model is implemented. The organizations should revolutionize their models, implement them and again return to the design phase so as not to face future issues. An organization should not only focus on gaining huge resources and new technologies. Innovation is the key factor to decrease the path dependency and gain a competitive advantage. Hence, every other organization should go on for innovate their business models.
References
Amit, R. and Zott, C., 2012. Creating value through business model innovation. MIT Sloan Management Review, 53(3), p.41.
Bharadwaj, A., El Sawy, O.A., Pavlou, P.A. and Venkatraman, N., 2013. Digital business strategy: toward a next generation of insights. Mis Quarterly, 37(2), pp.471-482.
Cucculelli, M. and Storai, D., 2015. Journal of Family Business Strategy.
Casadesus‐Masanell, R. and Zhu, F., 2013. Business model innovation and competitive imitation: The case of sponsor‐based business models. Strategic management journal, 34(4), pp.464-482.
Sabherwal, R., Hirschheim, R. and Goles, T., 2013. 11 Information Systems—Business Strategy Alignment The dynamics of alignment: insights from a punctuated equilibrium model. Strategic information management, p.311.
