Business Studies

Discussion must be in current APA format and must include a reference list. Reference sample make sure to include DOI-Drollinger, T., Comer, L. B., & Warrington, P. T. (2006). Development and validation of the active empathetic listening scale. Psychology & Marketing, 23(2), 161-180. https://doi.org/10.1002/mar.20105 There needs to be 2 scholarly references (2017-2022) and 1 biblical references from the King James bible in the paper Minimum of 275 words in the body Minimum of 2 sources from the literature in addition to course texts Current APA format must be used. Content must include: • Summary of the author’s Thread – no less than 150 words • What you agreed with, did not agree with and why – no less than 125 words • Support your factual assertions with citations.
Discussion to Reply to:
Introduction

Organizations can ultimately choose any number of ways to identify and pursue their competitive advantage. One thing that they each retain is a way to bring superior value (Gamble et al., 2021). This superior value is found through competitive strategy, a management’s approach to finding a way to compete with the competitors. There are foundationally two concepts to most any basic competitive strategy and approach. The first focuses on whether the company targets the market broadly or narrowly. The second focuses on bringing in a lower-cost model or some form of differentiation. With these two approaches in mind, there are five basic approaches to the competitive strategy.

Broad Strategies

A low-cost provider strategy is focused on getting lower costs in a larger market. The best way to achieve lower costs in products or services is to either achieve better value chain activities compared to the competition or completely rehaul the value chain to shorten the cost-producing activities. In both scenarios, focusing on the cost drivers of the value chain are where the attention needs to be placed. A broad differentiation strategy seeks to provide differentiation in the product or service that can be sold across a larger market, oftentimes seen as higher volume. The effort of differentiation allows for the company to choose premium pricing, brand building, and increased sales potential. For differentiation to be effective, it cannot be replicable and does not necessarily lead to competitive toughness (Ivanova & Ushchev, 2019). This can be achieved by honing the value drivers of the product or service and bolstering the product in these ways.

Focused Strategies

A focused low-cost strategy is similar to the Low-cost strategy, except that it focuses on a more niche market. This is most effective when a company can reduce costs by focusing on a more defined customer base. The Focused Differentiation strategy is the flip to the broad differentiation strategy in that it targets a focused market. The focus is to outperform the competition in the smaller market. Because there is a focus on product quality, pricing is virtually determined by the company and not competitors.

The best-cost provider strategy is a blend of both low-cost provider and differentiation strategies. The goal is to provide the most value through a culmination of differentiation and price. Companies that can perform a low-cost approach to the product cost while also being able to provide a specific differentiation to their product can utilize this, sometimes, difficult strategy. Oftentimes, this strategy has a very vulnerable and weak value chain.

Deciding on Competitive Scope

Once companies have identified their competitive strategy, they must then decide on a few other factors in which they will utilize the strategy. This is considered the scope of the company’s strategic decisions. The scope of a firm will include the “activities the firm performs internally, the breadth of its product and service offerings, the extent of its geographic market presence, and its mix of business” (Gamble, 2021, p.121). The scope will dictate the who, what, when, where, and how the company will make strategic moves. This will include many aspects of the company through the horizontal and vertical scope. Brahm et al. (2021) found that the interdependency between horizontal and vertical scope has a negative correlation unless there are managerial constraints centralized to key functions. The horizontal scope will include the company’s products and services that it brings to the market. The vertical scope will include how the company’s internal activities correlate to the entire industry’s value chain. This can be viewed more specifically on whether the company will vertically integrate or outsource its production and distribution processes which would fall under the production and distribution scope. If the company will seek strategic alliances and joint ventures or if it will seek mergers and acquisitions as a way of growth. The scope will include if it will be a first-mover or last-mover. It will also include how the company will respond to the market if it is an offensive maneuver or a defensive response. Often an aggressive approach in the market will build on already existing strengths and can lead to blue ocean strategies where new markets can emerge. When a strategy is more defensive, the creation of new advantages will rarely arise. A company can choose to participate in certain geographic regions, which will be determined by the geographic scope.

Decision Model

When considering the competitive strategy approach and scope conversation, one of the better decision models to be considered is the Boston Consulting Group Box. The Boston Consulting Group came up with the method to analyze its own company’s investment portfolio (Krogerus & Tschäppeler, 2012). Also known as the BCG, the model attempts to evaluate the costs and benefits of different options when faced with potential opportunities. The BCG Box uses a matrix of four boxes. The options have the potential of high growth and high return, High growth and low return, low growth and high return, and low growth and low return.

Conclusion

When determining competitive strategy, it is important to note that the success of the strategy is contingent on the set of resources available to the organization. The low-cost strategies retain cheaper value chains, while the differentiation strategies utilize a product’s capabilities and uniqueness. Broad strategies will attempt to focus on a larger basis of the market, while the focused strategy will focus on a smaller niche of the market. These strategies will develop other strategic approaches to the competitive market. By examining the scope of the business, the company will be able to make certain decisions to take steps forward with its competitive edge.

ANSWER

Competitive Strategy

Response

Having a defined competitive edge is what sets successful companies from the rest. Competitive strategies allow a company to either target the market broadly or narrowly or implement lower-cost models as a way to beat the competitor’s value. The existing competitive strategy approaches enable companies to decide which approach suits their market structure and the internal environment of the company (Kilduff, 2019). I agree with some of the basic models that you have highlighted, including the broad, focused, and competitive scope strategies. However, the inclusion of commitment to customer’s strategy is also an essential approach that can bring a competitive edge to a business. Commitment to customer’s strategy resonates around ensuring that the business is more focused on the needs of the customers. Various studies highlight that companies that satisfy the needs of their customers have a high customer retention rate (Osorio‐Londoño et al., 2020). Customers are more like to purchase products or services at places where they feel more appreciated and receive these services that meet their satisfaction.

The Bible also highlights the need to embrace these competitive strategies, as the Bible advocates for its followers to be winners and not losers. According to the New King James Version, 1 Corinthians 9:24 “Do you not know that those who run in a race all run, but one receives the prize? Run in such a way that you may obtain it”. The Bible asserts that it is paramount for its followers to have a competitive edge. As there may be many runners, only those who employ competitive strategies may win the race. Even in the existing world, the literal meaning of the verse is accurate, as many runners may start at the start line, only those who have a competitive strategy and edge shall prevail and finish first.

References

Kilduff, G. J. (2019). Interfirm relational rivalry: Implications for competitive strategy. Academy of Management Review, 44(4), 775-799.

Osorio‐Londoño, A. A., Naranjo‐Valencia, J. C., & Calderón‐Hernández, G. (2020). Training and its influence on competitive strategy implementation. Human Resource Development Quarterly, 31(2), 149-172.

New King James Version