Introduction
Strategic management helps make the business competitive. The survival of the business depends to a large extent on its ability to address specific problems to the organization effectively. This is where strategy in business management comes in (QuickMBA, 2006).
Strategy provides the direction in which the business should take. Delineating company objectives clearly, establishing policies and plans and implementing plans by using resources are all parts of an effective strategy. Knowing the strategy that works then is essential for the growth of the company (Wikipedia, 2006).
Strategy based on strong brands is likely to be sustainable because it creates competitive barriers` (David Aaker, 1998 `Strategic Market Management` p.172).
Strong brands have proven their sustainability and strength throughout the years. Their strategies therefore are effective in maintaining or surpassing their leadership in the market.
In achieving a sustainable competitive advantage the marketing strategies of both successful and unsuccessful companies serve as clear examples of what works and does not work in business.
To be sure that one would be a successful in business venture, the company needs to consider some salient points. Questions don't have to be addressed all at one time but should be considered as one move along. It is also important to solicit the aid of professionals or people conversant of the process so as to facilitate the transition.
Getting into business is not only a full-time job it is also long-term. It takes some time before the company's efforts show on the financial statements so committing to the cause should be number one on the list. Without it, once obstacles show, it would be hard to go on. One needs a reason, a goal to attain in order to be clear on what on what to achieve, when, where to go and how to go about it. Commitment to business should be considered thoroughly before resources are allocated to such purpose.
Commitment from senior management is critical to the success of the endeavor. Looking at the situation on a long-term basis would enable the company to overcome initial disappointments and the hassles in business. Operating costs involved early on may seem unjustifiable compared to the sales but it pays dividends in the long run. Commitment is necessary to be able to continue in the face of obvious impediments.
As part of their strategic marketing management formulation, the company must come up with several objectives behind their goal to do business:
- To earn the reputation of taking part in the business market
- Increase in total case sales
- Increase market for distribution
- Potential for more future sales
- Selling products beyond the U.S. market needs
- Combining business with the pleasure of international travel
- Fulfillment of seeing their products used by customers
As early as 1954, Peter Drucker has come up with the idea of Management on Objectives (MBO) which is critical to management strategy. He believed that objectives provide direction for the organization without clear objectives whch later came to be known as Management by Objectives (MBO). Drucker (1954) stated that setting objectives and watching an eye on the progress should include the entire staffs from top to bottom.
CORPORATE STRATEGIES
-FINANCE
Finance strategies demand that bold moves need to be undertaken to create value such as wise use of investments through cutting down or even not paying dividends to stockholders to be able to use the money to acquire more investments such as equipment, labor, capital, etc. Another financial strategy would be to use funding from external sources such as financing institutions. Funding is necessary for the growth of the company.
Intel makes use of its finances to be able to stay competitive and ahead of its competitors. When it was threatened by less known Advanced Micro Devices when it introduced Athlon, it quickly implemented price cuts to be able to thwart its competition.
The opposite happened to struggling company Kodak. When Fuji, it's nemesis, aggressively pursued the US market by introducing cheaper cameras, Fuji refused to relent to the price pressure. As a result, losses were incurred. Kodak was forced to face the competition by introducing products with the same price as Fuji.
Payment Methods
- Agree when and how the company will be paid and when and how to compensate brokers and distributors
- If payment is from a foreign entity, know the credit risk and how to insure in case of bad credit or non-payment
- Consider the exchange rates and risks that come with them (Wine Vision, 2003)
HUMAN RESOURCES
Competent Staffs
Persons must be assigned to handle every step of the exporting process at the company such as: packaging, logistics, sales & marketing, accounting. Surveys reveal that those who designate personnel to overlook the export process have greater chances of attaining success.
OPERATIONS
Operations Strategy is used to simplify operations to maximize profit.
Information Technology and Organizational Architecture should be used for efficient flow of information, people and materials through the system. Through the use of various methods such as quantitative analysis, Operations Research models, the financial status of the company will be easily determined.
