HI6006 Answer To Each Tutorial Questions On Competitive Strategy Assessment Answer
Answer to question number 1
The five forces used for the determination of attractiveness of any industry is the elements of Porter's Five Forces Model for market analysis. The five forces for analyzing industry attractiveness include the bargaining power of buyers, bargaining power of suppliers, threats of new entrants, level of rivalry, and threats of substitutes (Nurlansa and Jati, 2016).
The German Luxury car market is with a wider marketplace and the influence of these five forces for the luxury cars are as follows:
Bargaining power of buyers- high- buyer’s power is high as the market is enriched with several large companies. The customers could get several options available for making their choices and switching to other companies or models.
Bargaining power of suppliers- the forces of suppliers are moderate as the market is large and it is not possible without the large chain of suppliers. the organization could choose their appropriate supplier to which they could negotiate the best and could depend on their production.
Threats of the new entrance- high- the German market has influenced western marketers and companies and several companies are entering the market with new models of luxurious cars.
Threats of the substitute- high- it refers to the same type of products with almost similar features and services. the market is with high forces of the substitute as several organizations are there with the same features as well as dimensions in their products as of the competitors.
Level of rivalry- high- the market has fierce competition. there are several organizations that are offering the value proposition to their customer and meeting the demand and ever-changing expectations of the customers.
Answer to question number 2
The differentiation strategy is one of the approaches for gaining competitive advantages. it refers to the process used by an organization for differentiating itself from the competitors by offering unique features or services with their products (Santos and Isaias, 2016).
David Jones's differentiation strategy is mainly based on the customer service facility and depends on the engagement of the proposition with the consumer market. The company is known for offering an in-store experience as its differentiation strategy. However, this strategy is also associated with some of the risks and they are as follows:
The taste and demand of the present consumer market are ever-changing and several channels for retailing are emerging and gaining popularity. with these changes, the experience about the in-store service for the organization is also changing and the company sometimes finds it difficult to meet the demand and preference of the customers. in addition to this, the company would also require adopting initiatives for improving the customer service experiences and engagement
In addition to this, as the internal management for offering a good and effective customer service, the organization is dependent on its staffs and employees. so, the company is required to utilize several motivating and inspiring approaches for gaining the dedication of the employees and making them sales orientation.
Answer to question number 3
The market of China offers a large consumer base and this attracts foreign companies operating in the China market. However, the market is not immune to the challenges and imposes economic, political, and cultural challenges on the foreign company’s especially western companies operating in the country's market (Rashed and Nesha, 2016).These challenges or issues are discuses with the issues faced by Wal Mart in the same market.
Political challenges- the political landscape of the country imposes challenges to the western companies. the country has a complicated network of local as well as national political institutions and parties that interfere in the business. in the same ways, Walmart faced challenges in negotiating with the political leaders and even once the organization was fined for the breaches despite it met the laws and obligation. not only this, the company was compelled to shut down its business temporarily.
Economic challenges- the country has witnessed sufficient economic growth but still, its infrastructure such as air and rail service is not up to the standard of the western counties where companies like Wal Mart operate. The nation has a sheer physical structure and it has not effective transportation service for materials transportation from one place to another.
Cultural challenges- this is among the major factors that influence western companies’ growth and success in the China market. The Chinese culture is completely different from that of western countries and citizens are not easily attracted to foreign products as they tend to domestic products. In addition to this, one of the vital challenges of this market is that the demand and preferences of the customers vary cities to cities. This is why Walmart is confused and finds it difficult to decide the appropriate product from its product mix for different 117 cities in the 25 provinces.
Answer to question number 4
The cooperative strategy refers to an organized approach where it associates with other organizations for gaining competitive advantages in a large market place (Ab Yajid, 2020). General Electric has used merger and acquisition as its cooperative strategies to become successful in operating as one of the largest organizations worldwide and maintain its operation in different 16 industries.
The strategic alliance made by General Electric has contributed significantly to the organization's success. although it has brought significant revenues and advantage to General Electric, at the same time, it has also brought some disadvantages to the company. some of the major advantages and disadvantages it has brought to the organization have been discussed below.
- It has contributed to the major share of revenues and made the company an industrial component
- It has helped the organization in enhancing and controlling its poor record in the areas of environmental protection and becoming one of the vital players in the clean energy industry
- it has made the company able to leverage the advantages form the markets of emerging economies such as brazil and china
- It has created a maintenance problem as it is quite difficult managing such as a large company that operates in several industries at the same time
- It has imposed several challenges such as meeting the several federal as well as international governmental regulation for an instant the environmental laws and regulations.
Answer to question number 5
The study is all about demonstrating the organizational capabilities of Starbucks and the ways the company meets its target customers' demands and preferences accordingly without any hindrance (Khan, 2019).Starbucks is one of the largest hot beverage organizations that is globally expanded and is serving its target customers successfully meeting all the ingredients of competitive advantage. The company has developed several innovative approaches that have helped the organization in meeting the expectation level of consumers. For example- it has a product variety strategy. Thus, it serves single-cup coffee makers, instant coffees, building larger stores, and developing a partnership with its key suppliers indicating strong growth of the organization.
Starbucks has witnessed a mixed experience in the European market as it has moderately picked up the European market. However, the result is completely different in the Australian market where it has severely failed to perform effectively. It has failed to meet the socio-cultural expectations of Australians as Starbucks culture did not match the Australian culture which led to severe failure.
The company has now understood the importance of cultural orientations of different regions. They need to think unbiasedly and must develop a culture that supports diversity and can expand service beyond the border. It has ensured additional sitting allowances for people in Europe and Asia to meet consumers ‘cultural requirements.
Answer to question number 6
Organizations all over the world utilize several strategic directions to running the business smoothly. Strategic directions consist of each and every activity and measures taken by organizations for achievement of their goals (Jalonen, Schildt and Vaara, 2018).
The business of Alibaba o is the largest business to have gained the IPO bidding in China after the Multinational brand Google. The strategies adopted by the CEO Jack Ma gave the fruits with 80% of the e-commerce was with Google before it.
The business has dealt with the complaints ethically and also made the point to make sure that the aspects are well taken care of o establish the brand abroad. So, the decisions of not toleration the unethical behavior made the business achieve these feet. The stakeholders like HR, sales, and marketing are all involved with this where the reward and punishments are well given to make the point clear to all. So, the practices established by the brand were high which was the best motivator for business growth. Hence to give the trust among the stakeholders the repair of the processes and the strict actions on fraud controls were made the business grow large and show exceptional sales in 2015 which was attributed to the business objective of ethics in its operations.