Business Strategy and Organizational Position
Discuss about the Identify of The Fruitfulness Of Strategies.
Business strategy is often conceptualized as the high-end planning process of a firm to reach towards the specific business objective. According to Leonidou et al. (2017), the business companies need to identify the most fruitful strategies that can lead to success through achieving growth and a strong competitive position. The effective business strategy even determines the fruitful financial growth in a competitive business scenario. Similarly, if the strategy fails, the firm either needs to alter the strategy or make the necessary changes on the exiting strategies. (Leonidou et al. 2015). The report would be based on two different scenarios observed in Ford Motors and Holden Motors that led towards success and failure respectively. The strategic directions and reasoning of success and failures would be also discussed in this report to provide the fruitful insights regarding the effectiveness of the fruitful business strategies.
- To identify the fruitfulness of adopting appropriate strategic decisions to ensure sustainable business practices
- To critically analyze the effective strategic implementation of Ford Motors that led towards success
- To investigate the strategic failures faced by Holden Motors in a competitive scenario
The study in store identify the impact of fruitful business strategies adopted by the business market is for strengthening the organisational position in a competitive market. The study also attempts to identify the key areas that influence the business success or failure in a specific manner.
Business owners always look forward to develop the most suitable business strategies that would lead towards success. Martinez-Simarro, Devece and Llopis-Albert (2015) pointed out that business owners associate the workers to establish the fruitful business strategies for effective sales, internal accounting functions, and customer service. Business strategy is generally defined as the appropriate methods and tactics that are used for managing businesses (Gandhi 2017). The development of the preferable business strategy helps in retaining the customers in a quickest way. It includes the development of the suitable programs that follow up the customers and ensure the functions of the products or services (Doran and Ryan 2016). Resource allocation is also one of the fruitful business strategies that are needed to be followed in a systematic way. The personnel, marketplace, reputation, customer base, manufacturing process, company patents, and logistics are some of the most specific resources that create the success path for the businesses. The business leaders need to pay attention towards the appropriate method of undertaking the strategic decisions, which would drive the businesses in a significant way (Martinez-Simarro, Devece and Llopis-Albert 2015). Similarly, many businesses face the failure in implementing the appropriate strategic direction that can ensure success for the future prospects.
Success and Failure Scenarios: Ford Motors and Holden Motors
Ford Motors is one of the leading American automotive companies in the international business market. It has been observed that the automotive industry has expanded drastically and eventually became bigger in nature (Ford.com 2018). The industry has been growing much considerably due to which the global players have to face the significant challenges of rise in the oil prices (Parker 2017). It has thus become much challenging for these leading market players to earn profits. The companies need to focus on adjusting their focus while implementing the business strategies. Ford Motors has developed the strategic functioning much systematically, which helped in achieving the competitive advantages. There are some of the specific reasons due to which Ford Motors has achieved the success in a commendable way.
- Ford Motors has stabilized the distribution channel, which became a significant aspect of achieving success. The company started selling cars through third party and did not involve the direct consumers. It selected the reliable distribution channel that helped them in gaining more confidence and helped the potential consumers to become independent while purchasing cars. Consumers usually seek more information before purchasing the cars. This third party deals help these consumers to provide the necessary information and make them knowledgeable enough prior to use the cars. On the other hand, the efficient management of the supply chain process is also one of the critical success factors for Ford Motors. The effective management of the vendor channels is essential for supplying the products to the consumers by maintaining the quality and the stipulated time (Bocken et al. 2016).
- Ford Motors has been complying with the internationalized standards of safety as well as fuel consumptions. At the initial stage, this might seem a bit costly. However, this factor helps in increasing revenues within a competitive ground. It shapes the confidence level of the companies since these are receiving adequate support from the government and maintain sustainable approach.
- Ford Motors is quite flexible while responding to changes. The modernized business scenario is introducing more advanced in every field. Accordingly, the customers’ demands are also changing much drastically. Therefore, the organisations need to adopt more diverse techniques to manage the needs and requirements of the target consumers (Cusumano, Kahl and Suarez 2015). Ford Motors maintain the flexible approach while dealing with the changing demands of the customers. The car manufacturers have to be flexible in such context to increase the revenues for the company and ensure success.
- Product streamlining at the production department creates the significance in strategic success. The car manufacturers can achieve the efficient production by adjusting the product streamlining process (Martins, Rindova and Greenbaum 2015). Ford Motors maintain such effectiveness in managing the activities at their production departments. The major motto of managing such efficient production activities is to achieve the competitive standard in today’s world.
- It is true that the high profit margin is only ensured by the high sales revenues. In order to derive the high sales, it is important to create the systematic production structure in an effective way. The efficient cost planning associated with the appropriate distribution channel can determine the success much prominently (Prajogo 2016). The automobile producers cannot win the competitive position over their competitors if they do not deal much efficiently with the globalization challenges and customer demands. Ford Motors pays attention towards such specific business needs. The company creates the suitable cost planning which becomes the key success factor since it helps in creating the larger customer base. Ford Motors even maintaining the effective cost management system to gain more profits and secure their strengthened position in a competitive automobile market.
- In the year of 1994, Ford Motors announced the commendable 2000 Globalization Plan, which was one type of globalization strategy that focused on developing the internationalized standard of business management. This strategy is entirely focusing on the assimilating high standardized level of the sales, marketing, research, production, design, and development process (Harmon 2015). The company could derive the highly improved financial performance by implementing this business strategy.
- The development of 2000 Globalization Plan helped Ford Motors in saving the operational costs. It was observed that the company was previously unable to make more profits due to the lower scale of sales. On the other hand, the costs of the operations are much higher due to which the company faced the considerable challenges. This strategic initiative adopted by the company helped in saving the cost by creating the synergies in diverse geographical locations (Eilert et al. 2017). It even helps in making shifts from the adaptation of the strategies to develop standardization. This plan is quite effective in saving costs and increasing the profits. Moreover, the business unification was quite an effective approach to achieve the economies of scale as well as economies of scope.
The above business strategies adopted by Ford Motors created the success path for the company to strengthen their position and earn more profitability in a significant way. On the other hands it has been observed that many of the companies fail to implement such business strategies that can develop the competitive edge. Holden Motors has been one of those significant examples that faced such strategic failure in recent time.
Effective strategic decision making creates effects on the organisational functionalities in a considerable way. Similarly, the strategies developed by Holden Motors did not create any positive impacts on the company for maintaining longer time sustainability in Australian market. The statement proved to be soon after the announcement of ceasing the manufacturing operations of Holden cars in Australia in the year 2017. As a consequence, it has been observed that nearly 3000 Holden workers lost their jobs due to such situations (Ottley 2017). Toyota, the only other car manufacturer in Australia, prompted this decision by stating that it may create the ‘unprecedented pressure’ to build cars in the country. Decision was confirmed when Holden Motors lost more than 8.4% sales in 2016 (Griffiths 2014). One of the possible reasons for such decline in sales is the lack of focus towards business market. The Global corporate managers realized that the applied business strategies either can make the business or can break it. Therefore, it was important for General Motors, the parent company of Holden Motors to create the clarified market focus to develop the better opportunities in future. However, the lack of market research was one of the reasons for failure faced by Holden cars in Australia. The market competitors like Toyota and Honda created the solid net cash flow by observing the market demands in a more significant way whereas Holden cars lost their ways.
Growth Drivers and Strategic Directions
Another reasons for strategic failure was the lack of product diversification. The company failed to create the different portfolio levels that could bring more variations among models, dealers, market segments, suppliers, and customers’ choices (Martins, Rindova and Greenbaum 2015). It was even reported that the company did not even meet the Expectations level of the global customers. However, it can be argued that the needs and requirements of the customers are rapidly changing. Therefore, it is quite difficult for a company to understand what customers actually want and provide the exact product or service. It is noticeable that the automobile producers cannot win the competitive position over their competitors if they do not deal much efficiently with the globalization challenges and customer demands. Hence, in order to strengthen the competitive position in this globalised world, it was necessary to create the clear focus and make the strategic decision accordingly. Holden cars observed the market demands in Australia, which required more capital investments in the production section. In spite of the huge market demands in other countries, the company lacks of adequate resources and the high costs of the car materials in Australia (Leonidou et al. 2015). It could be one of the most significant reasons for making the decision of ceasing the company. Such loss of focus in business market and customers’ demands made the company more inappropriate to survive in a high competitive automobile industry.
Conclusion
The overall study provides the clear insights regarding the appropriateness of implementing business strategies that can lead towards business success. Furthermore, the conceptual ideas developed in this study provide the knowledgeable aspects on how the failure of business strategies can affect the organisation in different ways. With the special references with has developed the clear understanding related to the subject area. It has been observed that undertaking the right strategic direction by considering the customer demands and business market focus can lead the company towards remarkable success and vice versa. Ford Motors implemented the 2009 Global Strategy, which helps in increasing the sales revenue since the company could make modifications in their organisational functionalities by saving operational costs. Making modifications in the operational functions helped the company to clarify the focus and built the strengthened competitive position to sustain in future. Similarly, on the other hand, holding car failed to keep appropriate focus towards business markets which made the company to take the decision of ceasing the company in Australia. The company failed to develop product diversification as the market demand was comparatively higher. These specific strategies were necessary to create a systematic focus and strategic decisions for building up the future in a more clarified manner.
References
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