Strategic Plan Part 3: Strategic Evaluation And Recommendati ✓ Solved

Strategic Plan, Part 3: Strategic Evaluation and Recommendation

Evaluate potential business level strategies for the organization.

Assess potential corporate level strategies for the organization.

Assess potential global strategies for the organization.

Recommend a strategy or combination of strategies the organization should implement, and include a rationale for that recommendation.

Sample Paper For Above instruction

Introduction

Strategic planning is fundamental for organizations aiming to sustain competitive advantage and growth in dynamic environments. Effective evaluation of various strategic options ensures that organizations can select appropriate pathways aligned with their mission, resources, and external market conditions. This paper provides a comprehensive analysis of potential business-level, corporate-level, and global strategies applicable to a hypothetical organization, along with a strategic recommendation grounded in strategic management theory and best practices.

Evaluation of Potential Business-Level Strategies

Business-level strategies are concerned with how an organization competes within a specific industry or market to gain competitive advantage. For the organization under discussion, several options are viable. Cost leadership, differentiation, and focus strategies are prominent. Cost leadership involves becoming the lowest-cost producer in the industry, enabling competitive pricing and higher margins (Porter, 1985). Differentiation, on the other hand, focuses on offering unique products or services that create value for customers, justifying premium prices (Porter, 1985). A focus strategy targets specific market segments, either via cost focus or differentiation focus, allowing the organization to serve niche markets effectively (Porter, 1985).

Given the organization’s resources and market position, a differentiation strategy could be optimal for establishing a competitive edge. By leveraging innovation and branding, the organization can offer superior quality or features that competitors cannot easily replicate. Alternatively, a cost leadership approach may suit organizations with economies of scale and efficient supply chains, allowing them to underprice competitors and gain market share. Hybrid strategies are also prevalent, blending cost efficiency with differentiation to appeal to broader markets (Hill & Jones, 2012). Therefore, the organization should evaluate internal capabilities and industry dynamics to determine the most suitable business-level strategy, but a differentiation focus appears promising based on current market trends and organizational strengths.

Assessment of Potential Corporate-Level Strategies

Corporate-level strategies define the scope and direction of the organization as a whole, considering diversification, mergers, acquisitions, and portfolio management. The primary options include growth strategies such as diversification (related or unrelated), stability, retrenchment, or retrenchment combined with divestment.

Related diversification could enable the organization to expand into complementary markets, leveraging synergies and shared resources (Grant, 2019). Unrelated diversification, though riskier, might allow portfolio diversification, reducing dependence on a single industry. For this organization, a related diversification strategy might be optimal to expand product lines or market sectors that align with existing competencies, thereby reducing risk while fueling growth. Additionally, strategic alliances and joint ventures could enhance market access and resource sharing without the burdens of full mergers (literature on corporate strategy emphasizes the importance of strategic fit and resource synergy in diversification decisions).

Furthermore, if faced with declining markets or internal challenges, retrenchment or divestiture might be necessary to consolidate resources and focus on core competencies. However, in a growth-oriented scenario, diversification remains a potent corporate strategy. Therefore, the organization should pursue related diversification, supplemented by strategic alliances, to strengthen corporate footing and innovate market offerings.

Assessment of Potential Global Strategies

Global strategies enable organizations to expand operations beyond domestic markets, encompassing international market entry modes such as exporting, licensing, franchising, joint ventures, or wholly owned subsidiaries. These strategies are driven by factors like market saturation, demand for products/services, cost advantages, and competitive pressures.

Standardization, adaptation, or a combination thereof are relevant strategic approaches in global markets (Yip, 1989). Standardization offers cost efficiencies and brand consistency, suitable for products with universal appeal; adaptation caters to local preferences, regulations, and cultural aspects, enhancing acceptance. For this organization, a transnational strategy combining cost efficiencies with local responsiveness appears ideal, especially if targeting multiple international markets with diverse customer preferences.

Entry modes such as joint ventures in emerging markets can mitigate risks associated with political instability and cultural differences, while wholly owned subsidiaries might suit stable, mature markets seeking full control. It is imperative that the organization conducts thorough market research and risk assessments to select appropriate global strategies aligned with its resources and objectives. A balanced global strategy enabling both standardization and adaptation across markets will position the organization favorably for international growth.

Strategic Recommendation

Based on the above evaluations, the organization should adopt a differentiated business-level strategy focused on delivering innovative and high-quality products that meet customer expectations. This approach aligns with current market trends favoring quality and service differentiation. At the corporate level, related diversification via strategic alliances and joint ventures will help expand market presence and product offerings while maintaining manageable risk levels. Globally, the organization should implement a transnational strategy that balances cost efficiencies with local market responsiveness, entering international markets through strategic alliances and wholly owned subsidiaries as appropriate.

This combination of strategies leverages the organization’s core competencies while enabling agility and responsiveness in competitive and international environments. The rationale underpinning this recommendation is grounded in the strategic management literature, which emphasizes the importance of fit between organizational resources, market conditions, and strategic choices (Porter, 1985; Hill & Jones, 2012). Furthermore, a diversified and globally oriented strategy will enable the organization to sustain growth, mitigate risks, and enhance competitive positioning in an increasingly interconnected global economy.

Conclusion

Effective strategic evaluation and selection are critical for organizational success. By focusing on differentiation at the business level, pursuing related diversification at the corporate level, and adopting a transnational global strategy, the organization can capitalize on opportunities for growth and competitiveness. Proper implementation of these strategies, supported by continuous evaluation and flexibility, will ensure sustainable success in a complex and evolving marketplace. Future considerations should include ongoing environmental scanning and stakeholder analysis to adapt strategies dynamically, fostering resilience and long-term viability.

References

  • Grant, R. M. (2019). Contemporary Strategy Analysis (10th ed.). Wiley.
  • Hill, C. W. L., & Jones, G. R. (2012). Strategic Management: Theory: An Integrated Approach (10th ed.). Houghton Mifflin.
  • Porter, M. E. (1985). Competitive Advantage. Free Press.
  • Yip, G. S. (1989). Global Strategy... In a World of Nations? Sloan Management Review, 31(1), 43–54.
  • Barney, J. B. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17(1), 99–120.
  • Prahalad, C. K., & Hamel, G. (1990). The Core Competence of the Corporation. Harvard Business Review, 68(3), 79–91.
  • Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2017). Strategic Management: Competitiveness and Globalization. Cengage Learning.
  • Ghemawat, P. (2001). Distance Still Matters: The Hard Reality of Global Expansion. Harvard Business Review, 79(8), 137–147.
  • Rugman, A. M., & Verbeke, A. (2004). A View from the Industry: The Role of Strategic Flexibility in the Global Environment. Journal of International Business Studies, 35(2), 170–183.
  • Doz, Y. L., & Prahalad, C. K. (1991). Managing DMNCs: A Search for a New Paradigm. Strategic Management Journal, 12(S2), 145–164.

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