Understanding Organizational Strategy And Decision Making

Background and Importance

The report helps in the entire analysis of the reasons of diminished competitive advantage in various companies or industries. Competitive advantage is defined as the conditions which helps in allowing the country or the company as to produce the various goods and services of equal value like the other competitors in the market at a desirable fashion or at a lower kind of price in the entire market which is competitive. These are the various conditions which allow the prolific entity as to generate more sales or superior kind of margins in comparison to the rivals in the market (Albrecht et al. 2015 p.7).

Competitive advantage is helps in generating the greater kind of value of the company and this has been analyzed that the more sustainable the competitive advantage, this becomes more difficult in nature for the different competitors in order to neutralize the advantage in an effective manner. Moreover, the competitive advantage is the heart of the marketing strategy as any kind of successful strategy is fabric of the competitive advantage. Additionally, this is the antidote for the superiority for the various other competitors and this is the route for achieving the long-term success in marketing efficiently and helps in making the unit to remain and become more competitive (Vanpoucke, Vereecke and Wetzels 2014 p.446).

The competitive advantage is essential in certain industries such as in the online transportation applications, there are various kinds of generic strategies which can be applicable for various sectors. The different strategies are inclusive of differentiation, cost leadership along with focus of cost as well (Teece, Peteraf and Leih 2016 p.13). For instance- In the transportation industry, this can be seen that Uber and Grab are the two companies which are the major rivals in Singapore market and this can affect the overall profitability of one in a negative manner. However, there are various advantages which is inclusive of the following:

• This helps in offering the different customers a greater value in comparison to the different competitors
• Offering the similar kinds of products at a lower price or providing quality services or other benefits in an effective manner.

On the other hand, there are various barriers which is included in the gaining of competitive advantage which is inclusive of there are various barriers of entry to the different companies in various countries and this affects the overall profitability of the firm in a negative manner.

Importance of Competitive Advantage in Certain Industries

Competitive advantage is required to be considered for the product along with supply chain as SCM is network of different companies which are involved through upstream or downstream linkages in various processes along with activities that will produce value to the goods and services and this will value the different customers in the entire market as well (Shaw et al. 2016 p.583).

In case of Uber and Grab, this was seen that when Uber was pulled out, there was artificial intervention such as government was present which was scrutinizing the Grab application by CCAS (Donate and de Pablo 2015 p.360). However, both Uber and Grab can improve the continuously improving the different kinds of services which helps in improving their service in comparison to the other applications such as Grab. Grab tried to gain competitive advantage by offering the different customers with various services such as ride hailing through boat, buses along with launching of different e-payment and loyalty applications.

The competition has taken a new dynamism along with unpredictability in the entire market as the new entrants try to gain competitive advantage in the market which is powered by the usage of the different technological advancements which helps the new entrants in the market to succeed in an efficient manner (Schilke 2014 p. 179). In the competitive environment, there are various kinds of firms which strives for gaining competitive advantage in the market, however there are only few firms which understand the value of achieving the same in an efficient manner.

Furthermore, the competitive advantage can be gained by the company by offering the various consumers a greater and huge value in comparison of the other competitors in the market wherein the company tries to offer similar kinds of products and services at lower prices or providing the quality kinds of services or other benefits which justify the higher price (Jiang and Liu 2015 p. 126). The strongest kind of competitive strategy is a strategy which can never be imitated by the other companies who are the competitors in the market (Madsen and Walker 2015).

 The innovative kind of technology will increase and change over time and this can be seen that R&D will improve in a continuous manner and this will require the different companies in the market to innovate the different services and products in an efficient manner. Moreover, when the company is not being able to move and compete in the innovative world, this will affect the company and the products and services provided by the company will become obsolete in nature as well.

Competitive Advantage in SCM and Product

For instance- In case of Uber and Grab in the entire Singapore market, this can be seen and analyzed that Uber was not able and was not in a position to compete with the competitor Grab in the market as there was loss and diminishing competitive advantage in the market. Grab which is the ride hailing application has become most successful start ups business in South East Asia and the main competitor of Grab is Uber in which this has been seen that Grab is launching new kind of services and trying to integrate the platform with international partners Lyft in United States and tries to hand on the top spot as well.

From the above instance, this can be analyzed and identified that there are various factors which is required to be considered by Uber in order to compete with Grab and gain competitive advantage (Li, Easterby-Smith and Hong 2018). Uber did not get success in South East Asian market as the application of Uber did not improve the strategies like Grab as Grab introduced various loyalty and e-payment services in comparison to Uber in the market and gained huge importance as well. The main motive of Grab was to implement various innovative strategies which helped them in managing the different kinds of aspects effectively (Real, Roldán and Leal 2014 p. 208) .

However, there are other companies which have gained huge competitive advantage in comparison to the other competitors which are present in competitive market. For instance- Furthermore, this has been seen and analyzed that lim chee guan is one such companies in which the roasted pork is one recipe which is prepared in an authentic and traditional manner which helped the company in maintaining their heritage appropriately (Ferreras-Méndez et al. 2015 p.86). The main competitive advantage which has been gained by the company lim chee guan is the quality is being preserved and the taste has been the same for years as well (Sakas, Vlachos and Nasiopoulos 2014 p.209).

The cost leadership can be replaced in an easy manner as cost leadership helps in establishing competitive kind of advantage by providing lowest cost of the operations in the entire industry (Kodama 2018). With the help of the cost leadership strategy, this will help in establishing competitive advantage and gains more popularity in the entire market as well (Molina-Azorín et al. 2015 p.50). For example- Both Ola and Uber are the transportation online applications which helps and provides the customers with the helping them in reaching the destination within the specified time frame.

Artificial and Natural Progression

However, there are surge pricing which is being applied by the applications when there is a smaller number of cars in the market and this is ineffective in nature. In such cases, this can be seen that Uber will be helping the customers to reach their destinations at a cheaper price than the competitor Ola and this is the cost leadership strategy which is being adopted by Uber in comparison to Ola in the entire market (Haas and Stuebiger 2017 p.1209).

With the implementation of the cost leadership strategy, the strategy can be easily replaced in an efficient manner as the research and development will help in making the entire production technology more efficient and effective which will lower the various kinds of costs appropriately as well (Hatch and Howland 2015 p. 18091). For instance- There are different kinds of budget airlines which can be one of the best examples in which the main challenge which is being faced by the airlines is to grab the entire market share and gain competitive advantage in the entire market as well.

Furthermore, in the SG budget airlines, this can be noticed that there are various companies such as Indigo and Air Arabia which tries to grab the overall market share by implementing different kinds of deal which will improve their position in the entire market as well. However, there are different situations in the market in which cost leadership becomes very difficult in nature as the individuals or the customers are not being loyal to the company, however they are being loyal to the prices (Wagner III and Hollenbeck 2014).

For instance- In case of Air Arabia, this can be noticed that when the airlines is offering similar services to the customers at a flat 50% discount, this means that the company is being able to gain huge competitive advantage an this will improve the cost leadership strategy as well. However, the competitive advantage can be lost when the other competitor in the market is offering similar offers along with various other discounts in the market to gain competitive advantage in the competitive market as well (van de Wetering et al. 2017). Therefore, from the above instances, this can be analyzed and identified that the cost leadership strategy is not constant and this will diminish over time as well as the competitive advantage is not being gained through loyalty of the customers towards the company brand image but the price which is being offered by them.

Cost Leadership and its Ease of Replacement

There are various kinds of reasons which are taken into consideration in which this has been seen that competitive advantage can be replaced by various external threats and the main sufferer are the different organizations (Scarborough 2016). This has been seen that external kind of environment exists outside the organization and this is not within the control range as well. The different external threats such as:

• Competition is the first external kind of threatto the business and this is considered as the product in the entire market place (Kumar and Pansari 2016 p. 497). The competitive kind of environment needs to analyze the different kinds of other competitors in the market and this will be threat for the other company for the same kind of customers in the market as well. Lastly, due to this challenge, this can help the company in flourishing and this will flop the other competitors (Teece 2014).
• Advancement of technology is the other external threatwhich is providing the different organizations a competitive advantage and this will leave the other companies behind as well (Lazzarini 2015 p.97). There are various kinds of instances in which this is inclusive of the following-

The travel agencies are the major sufferer in this respective case wherein in the present scenario, this can be noticed that the customers receive all the valid information about the various services and other products which are being provided by the company to the customers. Moreover, the customers have the entire potential to book their own flight tickets and make the plans for their travel from their laptops or mobile phones and there is elimination of the travel agents.

• Global kind of environmentis the other risk factor which is problematic for the companies which is based on various natural resources. The patterns of the weather are essential and this can risk the resources of the company and this will impact the profitability as well (Tsougkou et al. 2018).
• Economic Threats is the other risk factor which is required to be considered as this do not matter that how much the company works efficiently on designing the different products and services, however the economic threats are the condition which can dictate the success and profit of the business in a negative manner as well (Wamba et al. 2017 p.365).

These are the different kinds of external threats which can affect the overall profitability of the firm which can create a negative impact on the business. The diminishing of the competitive advantage is the major reason which is being caused due to the various kinds of factors which are external in nature such as competition or advancement in the technology which causes huge issues in the company to get success in comparison to the other competitors in the market (Laaksonen and Peltoniemi 2018 p. 184).

In order to maintain the competitive advantage in the entire market, this is essential in nature for the companies to adopt the differentiation strategy in an effective manner which will help in improve the branding strategy of the company along with the different products which are being sold by them and it is similar in nature like that of the different competitors. The differentiation strategy is effective in nature as this helps the companies in managing the various types of complexities in an efficient manner (Coccia 2017 p. 1060).

For instance- Coke and Pepsi are the aerated drinks which are being sold in the market and there are various kinds of similarities in the tastes of the drinks as well. In order to differentiate the products from one another, this is essential for the Coca-Cola company by improving the branding strategy which will affect the reputation of the company in a positive manner (Soda 2018).

On the other hand, Pepsi is targeting the young audiences in the entire competitive market which is providing the company with a proper approach to gain brand loyalty and the main sponsorships and the brand endorsements are being done by the various celebrities in the entire market as well (Dhar 2015 p.430).

The corporate branding campaign have tried themselves to move beyond Soda and there are different styles of managing change by the organization which is inclusive of communication and participation collaboration which is essential to be adopted by the company Coca-Cola as this helped them in improving their brand image effectively.

Coca-Cola tried to adopt innovative along with diversification of the products and services as the strategic change which will help the company in selling the existing products with diversification and improvisation of the products as well. In case of Pepsi, this can be seen and analyzed that the respective company can gain competitive advantage in the entire market by changing the target audiences along with change the taste of the drinks which will help them in attracting more customers effectively as well.

 It is essential in nature for the company to convey the message that one has more value than the other in the market and this can be done through conducting a survey and using the strategy of differentiation which will improve the overall effectiveness of the firm to gain more popularity in the entire firm as well.

Branding plays a vital role in differentiating the products from the other competitor in the market. This kind of branding will help the company in being most successful in their approaches which will assist them in becoming more effective in comparison to the other brand in the market. Furthermore, branding can help the company in improving the overall recognition of the firm and gain more competitive advantage in the market as well. The trust factor is essential as this will help and assist the company in gaining stronger base of the customers in the market as well (Meihami and Meihami 2014 p.80).

For example- In case of McDonald’s, this can be analyzed and identified that there are various kinds of fast food which was being introduced by them. Furthermore, in the future this was seen that there were different other companies which tried to introduce more fast food of different variety which was unique and different from McDonald’s as well.

 However, the branding of the company McDonald’s was different and this was unique in becoming more successful in the entire market as well. The brand image of McDonald’s in the minds of the customers played a vital role in managing their strong base of customers and gained huge popularity in the entire market as well.

There is huge trust among the various customers in the market which has helped the company in becoming the most successful organization in selling the different kinds of fast food to their loyal customers. Lastly, the McDonald’s tried to innovate the different products which are being sold to the customers in which this was seen that the branding campaign done by the respective company was successful and gained huge competitive advantage as well (Saeidi et al. 2015 p.341).

The business relationships are required to be maintained by the different companies in the competitive market. This will help them in maintaining huge competitive advantage in comparison to the other competitors in the entire market as well. This has been seen that supply chain relationship which is strong and proper relationship with the different suppliers is essential for the organizations to become more effective than the other competitors.

This is essential that the different local developers need to have competitive advantage as this will help them in developing projects within their respective countries as this will help them in creating long ties with the government and the different government regulations will become easier in nature as well.

However, on the other hand there are different foreign developers who won’t be receiving such kind of benefits like local developers and there are various kinds of taxes and other paperwork which can be a delay for the company to enter into the market and this will affect their brand image and they will lose their competitive advantage in the market as well (Mittal and Dhar 2015 p.900).

For instance- When Coca-Cola will be shifting their business from USA to Singapore, there will be various foreign taxes along with other paperwork which will be performed by them and this can affect and diminish their competitive advantage in the market of Singapore along with the add up costs as well. However, on the other hand, when Coca-Cola will be operating in USA market, there will be less of paperwork and this will help them in gaining huge competitive advantage which will improve their overall productivity in the entire market as well (Edwin et al. 2016 p.27).

On the other hand, this can be seen that customer relationships are required to be maintained properly which will improve the overall effectiveness of the firm and this will build trust among the customers and the company as well (Li and Liu 2014 p. 2799). In order to bring loyalty among the different customers, this is essential in nature to drive loyalty and this will improve the business effectiveness as well (Arndt and Pierce 2017 p.413). The relationships with the different customers play a vital role in managing the overall efficiency of the firm in a positive manner as well (Robson 2015).

With the help of SWOT analysis, the company can analyze and understand the various kinds of products strengths and weaknesses. Furthermore, the opportunities and threats can be identified as well which will help in improving the overall effectiveness of the firm in a positive manner. The distinctive kind of capabilities are essential in nature which are required to be taken into consideration by the various companies in order to become more competitive and gain competitive advantage in the competitive market as well (Rothaermel 2015).

For instance- In case of Apple, when a customer purchases Apple iPhone or other Apple products, this is seen that the customers do not prefer using any other kinds of other brands as they feel that the ecosystem of Apple is different and unique in nature (Hill, Jones and Schilling 2015). Apple tries to enhance the purchase of the customers through maintaining proper relationships. This has been seen that Apple tries to introduce Orchard Apple Flagship in which Apple tries to take classes which helps in teaching the different customers on how to use the different products of Apple in an efficient manner (Leonidou et al. 2015 p.268).

From the above scenario, this can be identified that the VRIO analysis can be conducted in order to understand their valuable and rare kind of capabilities which will help in improving the overall experience of the customers in the entire competitive market. This is known as threshold capability in which Apple can compete with the other competitors such as Samsung and they are known as qualifiers in the market as well (Andrevski et al. 2014 p. 820).

Conclusion

Therefore, this can be concluded that competitive advantage can or cannot be diminished over time as there are different kinds of probability of the various kinds of activities in an effective manner. Furthermore, the different examples have been taken into consideration in which this was seen that two propositions in which once wherein there will be diminished competitive advantage and on the other hand, there will be no such diminishing of the competitive advantage as well. The business and customer relationships are required to be maintained efficiently in order to improve the customer base and this helps the company in becoming more competitive in nature as well.

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