Competitive Strategy

Competitive Strategy

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nBusiness Strategy

nKryscynski David in his video discusses the strategic management of business. He suggested that a strategy can be describes as a tactic, an objective, or a goal. In this regard, business strategies are tactics that contribute to firms success. In addition, he compares management of businesses with the modern day war (Kryscynski 2016). Therefore, business executives, just like army commanders must utilize an effective business strategies or tactics that delivers victory to their companies. Kryscynski also quotes Mintzberg Henry who noted that a business strategy deals with what a manager is actually doing as opposed to what he/she is intending to do. More importantly, the video also describes the questions that a manager should ask himself or herself when developing strategies. Firstly, they need to get answers on where the firm intends to compete. Secondly, executives must reflect on the unique values that they are likely to bring in the market (Kryscynski 2016). Thirdly, they should determine the capabilities and resources that the business would use in its operations. Finally, they need to understand how the firm can sustain its unique value in the market. One the other hand, Kryscynski provided an example of a company that has succeeded in the global market by using a unique strategy. In this case, he noted that IKEA is a multinational enterprise that deals with the manufacture and delivery of furniture products across the globe. The choice of market has assisted IKEA to provide unique value (Kryscynski 2016). The company uses effective strategy as it offer products that are designed for mass production.

nNetflix Company should use effective strategies in the management of its business operations. The company deals with provision of video on demand (VOD) and streaming media through DVD or online systems. Recently, it has designed measures to compete not only in the American market but also in other markets such as the European Union (Sakas, Vlachos and Nasiopoulos 2014). Therefore, the company needs proper strategies in order to choose markets that offer unique values. In this regard, its executive should determine where the products could offer sustainable competition. In addition, Netflix need to determine how to provide quality products that provide unique value to the customers (Rothaermel 2015). Moreover, it should leverage modern technology, which would improve its capability and use of resources to meet the customers demands. It can also sustain it unique value by listening to the needs of its customers. In most cases, the wants and needs of customers changes but some companies fail to adjust. In this regard, the business strategy of Netflix should be focussed on the customers in order to offer convenience services (Hill, Jones and Schilling 2014). One other top need of the customers in this industry is videos that offer high level of personalization, speed, reasonableness and comfort. In addition, it should use the strategy of providing products that are of high determination, helpful, quick and more customized (David and David 2016). However, it should ensure that its products have reasonable internet dribbling administration than most of its contenders. Therefore, the organization should continuously adjust how they design, produce and deliver their DVDs. Through this strategy, the company would retain its current customers and attract many international customers (Sakas, Vlachos and Nasiopoulos 2014). Similarly, it would be able to gain competitive advantage in the market.

nThe CAGE Model

nThe video by Ghemawat Pankaj provides an insight on the CAGE framework. It also discusses ways in which a company can take advantage of global business opportunities by utilizing this framework. According to Ghemawat, CAGE refers to Cultural, Administrative, Geographic and Economic model that can assist managers in the assessment and identification of effects of distance on different industries (Ghemawat 2016). Therefore, he argues that countries that are close to each other and have similar business aspects have a higher chance of engaging in successful business. On the other hand, countries that are far apart have diverse business dimensions hence it is unsafe to engage in foreign market. For instance, he suggested since Canada is close to the US and has similar business dimensions such as language; both countries are able to engage in business worth billions of dollars. Canada is a strategic business partner of the US (Ghemawat 2016). Other factors between the countries such as religious differences and currency are likely to have significant effects on the foreign trade. Therefore, managers should analyse all the potential effects of distance in every aspect of business prior to entering in the lucrative international markets. Based on Ghemawat argument the CAGE model advices managers to seek profitable areas depending on availability of customers and markets cost of raw materials or other crucial decisions benchmarks (Ghemawat 2016). Furthermore, any foreign strategy on expansions would require to be supported by the detailed capabilities and resources owned by the firm.

nThe CAGE model can be applied in growing international companies such as Netflix. The managers of this company should understand the cultural, administrative, geographical and economic dynamics of European market (Mellahi and Frynas 2015). Firstly, Netflix Company should pay close attention on the cultural distance between the American and European market. Culture has a huge effect on the behaviors and values of people in specific markets. Therefore, analysis of cultural distance would provide existing differences concerning the behaviors and values of customers from various countries in European and American market (Boddewyn ed. 2014). Secondly, Netflix Company would be able to determine the administrative distance, which represents the current and historical legal and political relationship between various business partners. In this regard, the company would be able to identify any political issues in the new market that obstruct or facilitate a relationship in business between the European country and America (Mellahi and Frynas 2015). Businesses are normally affected by political hostilities that occur between various countries. In addition, regulations and laws legislated in the EU or national level can greatly influence the business practices. Thirdly, Netflix Company must pay closer attention on the geographic distance, which describes the physical characteristics in the market. In this regard, the firm would consider the differences in terms of weather and climate, countrys size, information networks, and structure of transportation (Fullan 2011). The firm should also determine the geographic distances from its suppliers to the market. Fortunately, due to advances of technology such as the Internet, large proportion of the distance has been reduced. In addition, digital services and products have enhanced trade due to reduction of distance. Finally, Netflix must capture the economic distance between European and American market in terms of wealth and income distribution, and the purchasing power of the customers (Ghemawat 2016). Most importantly, the business should design the selling price of its products based on the economic index of a particular country since they are customers with lower income levels.

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nReferences

nBoddewyn, J.J. ed., 2014. Multidisciplinary Insights from New AIB Fellows (Vol. 16). Emerald Group Publishing.

nDavid, F. and David, F.R., 2016. Strategic Management: A Competitive Advantage Approach, Concepts and Cases.

nFullan, M., 2011. The six secrets of change: What the best leaders do to help their organizations survive and thrive. John Wiley & Sons.

nGhemawat, P., 2016. Pankaj Ghemawat: CAGE framework to evaluate international trade opportunities. [online] YouTube. Available from: https://www.youtube.com/watch?v=7FpUJaG7uMk [Accessed 20 Dec. 2016].

nGhemawat, P., 2016. The Laws of Globalization and Business Applications. Cambridge University Press.

nHill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

nKryscynski, D., 2016. What is Strategy?. [online] YouTube. Available from: https://www.youtube.com/watch?v=TD7WSLeQtVw [Accessed 20 Dec. 2016].

nMellahi, K. and Frynas, G., 2015. Global strategic management. Oxford University Press.

nRothaermel, F.T., 2015. Strategic management. McGraw-Hill.

nSakas, D., Vlachos, D. and Nasiopoulos, D., 2014. Modelling strategic management for the development of competitive advantage, based on technology. Journal of Systems and Information Technology, 16(3), pp.187-209.