Strategy is one of the most important elements in the organization. Used at both the corporate, business, and functional level, strategy is important for the business for various reasons (Chapter 1 p10).For instance, the growth and diversification strategies enable expansion of firms which in turn results in the sale of goods and services over a huge customer base resulting to increased profitability in the firm. In addition, the use of E-business strategies enables firms to focus on using the internet for business transactions creating faster and easier ways to conduct business operation with customers and as a result increasing the profitability of the firm.
In any organization, it is important for top management to assess the SWOT analysis for various reasons. For instance, through SWOT analysis, business organizations are able to identify the various strengths, opportunities, weaknesses, and threats of the firm (Chapter 1 p22). It helps organizations build on what they do well, address on what they are lacking, minimize associated risks, and take some of the greatest advantages for success chances in the market. For instance, through SWOT analysis, organizations are able to identify their core competency, a strength that provides organizations with competitive advantage over their rivals in the market. It is vital in ensuring organizational growth and survival.
Marketing involves a process through which groups and individuals obtain what they want through creation and exchange of goods and service (Chapter 1 p2).When organizations involve in marketing, they are able to provide goods and services to buyers in the market and as a result receive money and information in return for the products and services (Chapter 1 p3). In so doing, organizations are able to utilize the information and money received to create better quality goods and services that focus on the customer needs and wants. With this, organizations are able to satisfy customer needs, defeat competition in the market leading to their overall growth and survival in the market.
Obtaining a competitive advantage is the aim and mission of most organization. Bearing this in mind, it is therefore clear that having a competitive advantage in sale profitability is beneficial for the organization. For instance, by having a sales profitability competitive advantage, organization are able to engage in the production of more quality goods and services that are uniquely different from the competitors’ thereby establishing continued dominance in the market (chapter 1 pg11). In addition, by having a competitive advantage in sale profitability an organization can lower its operating costs than its competitors with a view of attracting more customers and attain a more competitive advantage.
Despite having numerous advantages to the organization, Market segmentation, positioning, and targeting are also beneficial to customers (Chapter 1 p35). For instance, through market segmentation, organizations are able to better understand their ideal customers and in so doing, this allows them to identify and provide the right market for customer’s products. Apart from market segmentation, product positioning is also important to customers due to the fact it creates the image of the firm’s products and services in the mind of the customer. In addition, targeting is also important to customers as it build product awareness among clients.
Strategy is an important factor for many organizations. It is considered an important element in the organization due to the fact that it provides room for environmental scanning (Chapter 3 p9). By engaging in environmental scanning, organizations are able to identify their strengths, opportunities, weaknesses, and threats. In addition, the use of strategy also enables organizations achieve competitive advantages over their rivals in the market. By implementing a good strategy, organizations are able to make wise decisions on business activities that adequately satisfy customer wants allowing organizations to operate in successful ways which are difficult for others to duplicate.
There are various types of strategies which play a vital within business organizations. For instance, the growth and diversification strategy is of great benefit to the organization as it provides business expansion in various areas such as in existing and new markets. Apart from this, the retrenchment and restructuring strategies both provide changes in operations to correct various weaknesses and reduce the scale involving mix of operations respectively (Chapter 1 p10). On the other hand, the global strategies provide focus global business initiatives allowing business to expand their scope of operations. While the global strategy provides international initiatives, the E-business strategy as well focuses on the use of the internet by the organization to improve on business transactions.
The use of strategy contributes largely to organizational improvement which is important for various reasons. For instance, by improving the organization, organizations are able to attain a competitive advantage which is vital for business survival in the market (Chapter 1 p10).In addition, through organizational improvements, business entities are able to acquire various strategies that assist in SWOT analysis thereby enabling businesses to identify their strengths, opportunities, weaknesses, and threats (Chapter 3 p9). In addition, organization improvements allow business entities to provide goods and services that satisfy customer needs which in one way or another result to increased gains in terms of profitability and business growth.
Despite numerous advantages associated with using strategy in business, there are also various downsides for not using it. For instance, buy not adopting any strategy, organizations are exposing themselves to a verge of not attaining some of the common operating objectives such as profitability and market share. In addition, by not adopting any strategy, organizations will not be able to engage effective environmental scanning making it difficult to identify their strengths, opportunities, weaknesses, and threats (Chapter 3 p9). Besides this, organizations without a strategy plan are exposed to the risk of resource wastage due to lack of an effective plan to allocate resources to achieve long term goals.
Dr. Ericson Z. Matias ; chapter 1: Introduction Strategy Development and Implementation
Dr. Ericson Z. Matias; chapter 3: Environmental scanning