Should Advaark Stick To Its Core Business Or Diversify ✓ Solved

Should Advaark Stick To Its Core Business Or Diversify Apply And Expl

Should Advaark stick to its core business or diversify? Apply and explain your reasoning with the Strategic Sourcing framework. Also, support your recommendation with a VRIS (Please ensure you state the specific resource/capability that you focus on for the VRIS analysis) and SWOT analysis. Be sure to explain how your proposed recommendation leverages the strengths, minimizes the weaknesses and helps neutralize some of the threats being faced by the company in the industry.

Sample Paper For Above instruction

Introduction

Advaark, a company operating within a dynamic and competitive industry, faces a strategic dilemma: whether to focus exclusively on its core business or to diversify its operations. Strategic decisions of this nature are critical as they influence the company's long-term sustainability, growth, and market position. This paper explores this dilemma by applying the Strategic Sourcing framework, conducting a VRIS (Valuable, Rare, Inimitable, and Non-substitutable) analysis, and performing a SWOT analysis. The goal is to provide a well-supported recommendation that leverages the company’s strengths, mitigates its weaknesses, and addresses industry threats.

Strategic Sourcing Framework Analysis

The Strategic Sourcing framework emphasizes the importance of aligning procurement and supply chain strategies with broader organizational objectives. It involves analyzing the company's core competencies, supplier relationships, and competitive positioning to decide which activities to couple internally or outsource. For Advaark, the question revolves around whether the core competencies—such as technological innovation or customer service—are sufficiently strong and valuable to sustain competitive advantage solely through focusing on core activities or if diversification into new markets or products would add strategic value.

Focusing strictly on the core business allows Advaark to deepen its specialization, improve operational efficiencies, and reinforce its competitive advantage, especially if the core activities involve proprietary technology or unique customer relationships. Conversely, diversification might reduce dependency on a single revenue stream, open new markets, and spread industry risks. According to the framework, the decision hinges on evaluating whether diversification enhances or dilutes the company's strategic focus and resource allocation.

VRIS Analysis

The VRIS model provides a method to evaluate the company's resources and capabilities for sustainable competitive advantage. Focusing on Advaark’s technological innovation capability—considered a critical resource—an analysis shows:

- Valuable: The company's R&D capabilities lead to innovative products valued by customers.

- Rare: Few competitors possess the same level of patented technologies.

- Inimitable: The unique organizational culture and proprietary knowledge make replication difficult.

- Non-substitutable: No equivalent resource can fully substitute for its innovation capacity.

Given this, maintaining focus on its core technological resource strengthens competitive positioning. Diversification could risk overextending resources and diluting focus, risking loss of this valuable capability.

SWOT Analysis

Strengths

- Strong R&D and technological innovation

- Established customer relationships

- Proprietary technologies

Weaknesses

- Overdependence on a single market

- Limited diversification reduces resilience

- Resource allocation skewed toward core activities

Opportunities

- Expanding into related technology markets

- Strategic alliances for diversification

- Leveraging technological assets for new products

Threats

- Increasing industry competition

- Rapid technological changes

- Market saturation and commoditization

The SWOT analysis indicates that Advaark’s core strengths could be harnessed in strategic diversification, especially into related fields that utilize existing technological capabilities, thus enriching revenue streams while mitigating industry threats.

Recommendation and Rationalization

Based on the application of the Strategic Sourcing framework, VRIS, and SWOT analysis, the recommendation is for Advaark to focus predominantly on its core business while selectively diversifying into related technology sectors. This strategy leverages Advaark’s proprietary technological resources and R&D capabilities, aligning with its core strengths. Selective diversification can buffer against market threats and create new growth avenues without diluting strategic focus or overextending resource commitments.

This approach ensures that Advaark not only sustains its innovative advantage but also reduces vulnerability to industry volatility. It allows the company to build on its inimitable resources while cautiously exploring adjacent markets that complement its existing technological expertise and customer base.

Conclusion

In summary, Advaark should prioritize its core technological capabilities in a focused manner, complemented by carefully selected diversification efforts into related sectors. This balance will enable the company to maximize its valuable resources, neutralize industry threats, and minimize weaknesses such as overdependence on limited markets. Strategic integration of the VRIS and SWOT findings provides a comprehensive basis for this informed recommendation, promoting sustainable competitiveness and growth.

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