Summary of the New Super Competitors From Strategy+Business Magazine
No company can totally avoid the impact of increasing costs. And most managers have learned to adjust to the effect inflation has on current operating costs. But few have factored it into their competitive strategies. And most managers, particularly those in capital-intensive industries, have not paid enough attention to the way increasing capital requirements affect their ability to compete in the long run.As a result of research and consulting work he has done with a number of capital-intensive companies, this author thinks that any organization can better its strategic position despite, and even because of, inflation. He recommends that managers do a strategic cost analysis to identify the severity of the impact of inflation on their companies’ competitive positions, as well as on the positions of rival companies. In this article, he takes the reader step by step through a diagnosis and analysis of changing cost patterns as well as through the formulation of a strategic solution.
SOSTAC is a renowned model in marketing planning which is widely followed across several industries. It is also claimed to be the most powerful technique of in helping the companies to plan their marketing process. SOSTAC stands for Situation Analysis, Objective Analysis, Strategy, Tactics, Action and Control. Situation Analysis helps visualize the internal and external factors that affect the company which prevail at a given time. This analysis mainly comprises of employing SWOT technique to understand the situation at company level and also PESTLE technique to analyse the global environment which impacts the industry in which the company is operating. By carrying out this analysis, the company can get a snap shot of the current situation which will help the managers to take necessary actions to take advantage of the situation. Elements such as performance, competitors and customers are analysed in this stage. Objective Analysis will provide a clear path to the company in terms of the revenues and sales targets that should be achieved in a stipulated time limit to obtain the desired market share. The main outcome of this analysis is to shape the marketing strategy for the company based on the corporate strategy as to what the company aims to achieve within a time frame. Strategies part of SOSTAC mentions about the need for segmenting the target market and then specifically design the products based on the needs of the customers in each segment. In this stage, the company will go onto design its individual strategies on segmentation, positioning and competitiveness to place the product in a safe position in the market. Strategy emphasizes on the need for designing a USP for each of the product to give it a competitive edge over the existing products in the market. Tactics will help design the 4Ps of marketing by carefully selecting the right mix in order to achieve optimum results in terms of sales. Tactics also inform about the different ways of promotional activities and communication techniques that a company should take up in order to get the attention and create awareness among the target market. Actions refer to the action plan the company should have about who does what and how the strategies are executed. The focus of the company at this stage will be budgets, staff and risk analysis. The allocation of resources and work break down structure are defined in this stage as well as key performance indicators are determined along with the bench marks that are supposed to be achieved.
The group is endowed with a number strength which they bank on lat for their business progress. Some of the strengths include; strong retail and wholesale outlets in the United Kingdom and the Ireland. The retail outlets contributed to a growth in profits of 76.8 per cent while the wholesale gave a share of over 90 per cent to the total revenues. Strong supply linkages are other strength for super group. Their designs are in-house but then they contract oversee companies for the manufacturing. The companies are contracted on the basis of their expertise and specialism. Infrastructure has been on the side of the super-group (Hill, 32; Pearce, 47). The super-group is also developing physical infrastructure to enhance their operations for instance in the United Kingdom there is a distribution center which is meant to improve on the efficiency of the company. Information Technology has been improved with websites being developed and the existing ones improved. All businesses of any strength are faced with different challenges that can be captured in political, Environmental, Social, Technical, Economic and Legal analysis. The social position of the super-group though stable can be improved by expanding their target consumers (Thompson,88). This can include factoring in the other social group. This will help broaden the revenue source base. The youth are unpredictable and so the group should spread the risk of uncertainty. One cannot trust all the eggs in one basket. According to the executive report the company is well endowed with technical capability. They recruit experienced and well trained managers who are assisted by committed subordinated in the quest for success. However, the group should not stop at that but should continue to train their staff to ensure that they are on as per with the market (Thompson, 101).
In any event, this type of strategic review, which can take place over the course of a few weeks, is an important first step in a round of strategic choices. When conducted effectively, it can help you carefully choose where to focus your attention and resources, so that you don’t try to be great at everything. The aspiration to become a supercompetitor changes the heart of a company’s identity, both today and in the future. When companies understand their strongest potential capabilities, and build a strategy around them, they are not just giving themselves a competitive advantage. They are shaping the future of their industry.
Holbeche, Linda (2006): Aligning human Resources and Business Strategy, Elsevier Publication, Oxford.
Morden, Tony (2006), An Introduction to Business Strategy 2nd Ed. McGraw-Hill. ISBN 0-07-709451-4
Pearce, J. & Robinson, R. (2005): Strategic Management, 9th Edition, New York: McGraw- Hill Publication.
Thompson, John L (2006), Strategic Management, Awareness & Change. Chapman & Hall. ISBN 0-412-37500-1
Wheelen, Thomas L & Hinger, David, J (2003), Cases in Strategic Management 4th Ed. Addison-Wesley Publishing Company Inc. ISBN 0-201-568659