Abell’s business definition framework suggests that a business can be defined using three dimensions namely; the customer groups which is who the business intends to serve through its goods and services. The second dimension is customer needs which refers to the needs of the customers that the business aims to attempt. The third dimension is technology or distinctive competencies which refers to how the business is going to meet the needs of its customers. Within the framework of the competencies of any business and its available technologies, it is the management decisions to strike an optimum between the amount of functions a business wants to fulfil and the costs it is going to incur. This approach puts emphasis on the understanding of the customers as opposed to the particular industry or the products or services the business is offering. On the basis of these three dimensions, Abell’s competitive strategy scheme of classification proposes that a business needs to be defined by the business competitive scope either broad or narrow and the extent of competitive differentiation of the products and services the business is offering (Gomes, 2011).
This model can be used during the definition of the mission, vison and strategy of a business. The definition of a business gives the main reasons as to why the organization exists as well as its strategic scope. It also gives a definition of the business review basis when it comes to the market the business serves, the potential competitors to the business and also the possible options for strategic alliances. By concentrating on the needs of the customers and also maximization of the added value, giving a wide definition of a business can lead to new insights when it comes to potential business areas. This definition can be utilized to define a business scope at all business levels; corporate level, business level and lower organizational levels. It can also be used to communicate any changes when it comes to the definition of a business. It is also useful when it comes to carrying out a systematic analysis of the existing growth opportunities of a business. It can also be used when giving a description or communicating the evolution of markets. This three dimensional business definition model is useful since it puts emphasis that products are just a physical manifestation when it comes to applying of a specific technology in order to satisfy a particular function for a specific customer group. The choice is therefore one of the technologies, functions and customers the business will serve and not the products it is offering. Central to this model is the customer and no the business itself (Gomes, 2011).
Reader’s Digest Association is the publisher of Reader’s digest a magazine in circulation all over the world. The company has the database that can enable it to sell various products like CDs, videos, condensed books. Abell’s model can be used to explain other products the company could send down its distribution channel which would be amenable to mail order that are appealing to its subscribers. Using the model we can say that the company will first examine its customer base, and then find out what else they can introduce in their distribution channel in order to satisfy their needs. Finally, they will look at if they have the available technology to produce the new products. Knowing their target group of customers is readers, they could introduce videos and music that can accompany the books they read. The company can introduce music and videos that go with particular books so that the customers can understand the books and enjoy them more. The company can expand its technology in order to produce the videos and music.
Gomes, S. (2011). Strategic Management. Retrived October 1, 2014 from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CDEQFjAD&url=http%3A%2F%2Fwww.cpaireland.ie%2Fdocs%2Fdefault-source%2FStudents%2FStudy-Support%2FStrategy-Leadership%2Fstrategic-options—approaches-to-sustainable-competitive-advantage.pdf%3Fsfvrsn%3D0&ei=p8crVLbaK6HC7gamo4CwCw&usg=AFQjCNF2G72Nw9_K80LZkVn7aNet3WKaqw&sig2=vH8nJWz0TXL-p9nzjvJm7AMy Strategic Plan. (n.d.). Vision Statements. Retrieved from http://mystrategicplan.com/resources/vision-statements/#Criteria.
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