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HI6006 Competitive Strategy Assignment
The selected paragraphs for this assignment will give emphasis on the strategy and the Business Innovation model. Strategy is the planning process to create uniqueness in the value that the organisation must deliver for maximising their market share as well as profitability. Secondly, the Business Innovation model will give a direction to the business in order to sustain in the competitive market. These two factors will be focused in this assignment.
A strategy is to enhance the competitiveorganisation.The objectives, goals, practices are the subsets of the strategy. A sound strategy can give an edge to the business organisations in the terms of profitability, customer satisfaction, competitive advantage and market share (Freeman, 2010). So a good strategy must contain the following ingredients:
- The selection of the market that the organisation wants to compete. For example, China is having 7.7% of the growth rate and the companies of US and UK can take the advantage of this growth rate in order to operate their business
- The uniqueness in the value that the organisation wants to provide to the market or the customers. The reason for the selection of the products by the customers is for the unique as well as superior value that the organisation is providing. Value can be created from the differentiation, pricing, customisation, accessibility etc (Johnson, Whittington and Scholes, 2011).
- The resources that the organisation will use in order to bring that uniqueness in the product. The Resource based theory can be linked which defines that the resources must be valuable, non-substitutable, rare and inimitable (Cinquini and Tenucci, 2010).
- Sustainability in the resources in order to beat the rivals or overcome the barriers is needed (Freeman, 2010). Thus maintaining the resources is the measure for this ingredient in order to create a permanent image in the mind of the customers.
Thus the strategy is to create uniqueness in the product in order to convince and attract the customers for the purchase consideration.
The organisation is Xiaomi which was established in the year 2010 by the entrepreneur Lei Jun and it is operating in the consumer electronics segment (Xiaomi, 2016).The idea that has been evolved in the related video is all about the strategy. Strategy is the uniqueness that the organisation needs to deliver it in the concerned markets for attracting the customers. Xiaomi is the rising brand of China mainly catering in the smart phone sector. They are planning to operate in the markets like US, Europe with their product line in the smart phone division. The strategy for Xiaomi must involve the following considerations.
- The first consideration should be the selection of the market.Xiaomi is already operating in the emerging markets and it is a Chinese brand. If they want to cater the market of UK in Europe then they have to understand the nature of the market based on the smart phone industry. The market of UK is leading by the brands like Apple, Samsung etc. Smart phone penetration in UK is around 77% (Statista, 2016). Thus the selection of the market is important
- Second is the unique value that the organisation Xiaomi can deliver. The unique selling preposition for Xiaomi can be the low cost smart phone models with enhanced smart features like the brand Apple. Customers having low budget but high aspiration can be fulfilled with this value.
- Third are the resources that are needed to create the unique value. The resources will be the talented and creative workforce who used to give importance to the constant innovation or the financial resources supporting the research and Development.
- The last is the sustainability of the resources. The measures like increasing the motivation and satisfaction level of the employees to give more creative ideas, maintaining long-term relationship with the key investors etc.
These ideas can give an edge to Xiaomi for catering the market of UK and can also achieve the competitive advantage by creating the unique value in the products (Wittmann, R and Reuter, 2014).
Innovation is the key attribute that the business needs to consider in order to remain in the market. The changing taste and preference of the customers can make the brand non-existence in the market. In this situation Business model innovation can be applied to sustain in the competitive market by creating unique value
The business innovation model can enhance the business to a next level that can support to achieve the competitive advantage by following the steps like:
- Initiation: This is the step where the organisation needs to select the target audience, creation of a unique value and ways to generate the revenue (Steiner, 2010).
- Integration: Consistency in the business planning is needed to integrate all the factors involved in the planning process
- Implementation: The plan is needed to be implemented in order to get the result.
- Verification: The verification must be done to evaluate the action by measuring the desired and actual result.
Thus implementing one strategy at a time, communicating the plans to the stakeholders for removing the confusions, allocating the time, level of commitment from all the levels of the organisation is to be focused for implementing the Business Innovation Model.
The industries in which the organisations are operating are highly competitive due to the changing taste and preference of the customers, supportive business environment, globalisation, modernisation in the technology etc. From this perspective the Business Innovation model can be applied in order to sustain the business in the competitive market and also to create a competitive advantage for the organisation. Mc Donald’s is one of the renowned brands in the fast food chain across the world. They continuously focus on the innovation in order to drive more customers to their outlets. In UK they are having 1200 restaurants with 97, 000 workforces (Mc Donald’s, 2016). The Business Innovation model can be applied in the following way:
- The first step in the Business Innovation model is the initiation which considers the certain parameters like (Kvint, 2011).
- The target audience will be the office employees, business man whose time is the important factor.
- The unique value will be the home delivery for all the food items. Convenience will be given preference.
- The process to create the value will be the additional human resource which can be outsourced.
- The additional revenue from the home deliveries will increase the business turnover
- Integration of all the above factors is needed in order to make the concrete plan. The management need to communicate the changes or undertake the training process for the employees hired for the delivery service
- The third step will be the action or the implementation of the plan. The management needs to allocate sufficient time for the implementation.
- The last is the verification process where the management have to test the plan by assessing the positive and negative side. The revenue generated from the new service should be compared with the existing service in order to measure the difference.
The benefit derives from the Business innovation model can be the sustainable business plan that can support the business for a long term basis. The measures can also be taken in order to reduce the deficiency can also be done with this model.
To conclude the role of the strategy and the Business Innovation model can be understand from the paragraphs. A strategy should be the unique value that the organisation should deliver to the target audience in order to attract the customers and also to achieve the competitive advantage. Secondly the Business Innovation model can give an edge to the business in order to sustain in the competitive market.
Cinquini, L. and Tenucci, A., (2010). Strategic management accounting and business strategy: a loose coupling?. Journal of Accounting & organizational change, 6(2), pp.228-259.
Freeman, R.E., (2010). Strategic management: A stakeholder approach. Cambridge University Press.
Johnson, G., Whittington, R., and Scholes, K. (2011) Exploring Strategy, Ninth Edition, Prentice Hall
Kvint, V., (2011). The global emerging market: Strategic management and economics. Routledge.
Mc Donald’s. (2016). Fast Facts. [Online] Available:https://www.mcdonalds.co.uk/ukhome/Aboutus/Newsroom/facts_and_stats0/fast_facts.html, Accessed as on 12.8.16