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:
Competitive Approach, Competitive Scope, and Decision Models
After a company has determined its external circumstances (i.e., opportunities, and threats) and internal conditions (i.e., strengths, weaknesses), it must choose a competitive approach and scope which will assist in optimizing the sustainability and return on investment for the organization. This discussion reviews deciding a competitive approach, considers the strategic thinking applied to competitive scope decisions, and proposes a decision model appropriate for company use. The context of a hospital marketplace provides specific examples of each component. Following the discussion, an annotated bibliography of the two sources cited is provided.

Process: Deciding on a Competitive Approach

Deciding on a competitive approach requires choosing from five common competitive strategies which position the company for a sustainable, fiscally rewarding share of the market (Gamble et al., 2021). The methodologies identified by Gamble et al. include overall low-cost (i.e., helped by reducing expenses), broad differentiation (i.e., appealing to a wide-range of buyers), focused low-cost (i.e., service of niche members at low price), focused differentiation (i.e., specific product features appealing to a particular market), or best-cost provider (i.e., a cross section of product/service quality, features, and pricing). Each of these strategies require a combination of resources, capabilities, and access to market to ensure viable participation.

Ding et al. (2019) demstrated hospitals are a significant model of how competitive strategies can affect market position, fiscal sustainability, and profit. They evaluated service mix (i.e., broad differentiation, focused differentiation) from the perspective of hospital specializing in certain treatments (i.e., internal evaluation of capabilities) and how they can vary from the standard services offered by competitor hospitals in the same health service area. Cost efficiency was found by the hospital managers to be key component of choosing a workable service mix. The authors suggested “that specialization improves cost efficiency at a decreasing rate…[and] improves cost efficiency of acute care general hospitals to greater extents when there are specialty hospitals competing in the same [market]” (p. 193). Once the hospital’s approach has been selected, in this example a strategy of focused differentiation, the organization must decide the scope of their competitive approach.

Strategic Thinking: Deciding on Competitive Scope

Competitive scope is the selection of offensive or defensive strategic actions to optimize the chosen competitive approach. Such actions include improving market position, broadening resources and capabilities, or increasing cost efficiency (Gamble et al., 2021). Tactics may incorporate integration with additional stages of the value chain, outsourcing value chain activities if a partner can produce the quality desired at a lower price, entering joint ventures or agreements with other companies in the surrounding market, or acquiring a market participant to increase market share or expand capabilities. Choosing a competitive approach is important because it focuses the resources of the organization and ensures possession of the required capabilities prior to embarking on the chosen competitive approach.

Geographic Scope

Trinh (2020) evaluated urban hospitals which, due to patient density, serve the same clientele in the market, are interdependent, and consistently monitor marketing moves made by the other hospitals. He found distance from hospital services and alternate medical services within the same geographic region will have a significant influence on which hospital a patient chooses, therefore within a limited market, hospitals choose differentiation to avoid a low-price competition which erodes profits. Considerations in determining hospital competitive scope include population density, community affluence, specialist physician availability, and the proportion of managed care patients. Trinh hypothesized hospitals choosing their competitive scope, “geographical distance appears to play a role in service duplication, but not in service differentiation” (p. 9). Geographic distance minimizes importance as medical technology is widely available for replication, however acquiring rivals in desirable locations is a best and quickest way to expand market share (Gamble et al., 2021).

Production / Distribution Scope

Gamble et al. (2021) explain differentiation strategies seek to set apart the organization’s product or service in ways found valuable to the buyer. In our example of hospital services in a limited geographic region with high population density, production and distribution scope does not consider the options of international markets as health care is generally regionalized. However, there are specialty hospitals in the United States which concentrate on services areas such as cancer or long-term acute care. “Prior studies show that an increased level of specialization within a hospital is associated with reduced operating costs…improved processes of care…and reduced length of stay and mortality rates” (Ding et al., 2019, p. 179). The model of service differentiation is applied by hospitals seeking to distinguish themselves where there are multiple alternatives.

Decision Model

Several decision models can be used to determine a competitive approach and scope. In competitive markets strategic decisions are often made with uncertain and incomplete knowledge (Trinh, 2020). Since a primary concern in market strategy, the author’s previously identified decision models of Thinking Outside the Box and Choice Overload can be applied if the circumstances are correct (e.g., multiple equal opportunities with great potential and a group decision are required). However, there is a noteworthy alternative decision model to apply in this circumstance.

Krogerus and Tschappeler (2017) propose the Boston Consulting Group (BCG) decision model for ascertaining business value. BCG simplified the process of determining, based on specific market and financial qualities, what products or services should be retained in a business portfolio. BCG recommended four types of divisions a business can hold. It begins with cash cows, which have a high market share, a low growth rate, and less cost while delivering high returns. This type of operation can support the profit margin and subsidize lesser performing divisions. Stars are growing and have a high market share, but growth consumes financial resources, so they are considered company investment opportunities for future conversion into cash cows. Problem children have potential for growth but a low current share of market. They require a great deal of financial support but could possibly be lucrative. Problem children constitute a tough management decision on whether to continue investing in hopes of a future return. Dogs are the fourth analogy (i.e., business units with a small market share in a saturated market). They should only be kept if their value goes beyond financial rewards. By categorizing differentiation opportunities with the BCG model, a pathway can be discerned for optimal market positioning with a sustainable financial model.

Conclusion

As a company develops its strategy, the competitive approach it takes must be carefully taken into consideration and the company’s geographic and production/distribution scope must also be determined. Low-cost, broad differentiation, focused low-cost, focused differentiation, and best-cost provider are five potential generic strategies which must be personalized based on the broadness of market and product/services. Hospitals face these decisions to capture and retain market share; hospitals frequently chose from these model approaches how to differentiate themselves from others. The BCG decision model has an appropriate use for hospitals or other companies to decide from their business opportunities which to prioritize and which to abandon for the company’s ongoing success.

“In the business animated by the gospel worldview, profit is simply one of many important bottom lines” (Keller and Alsdorf, 2012, p. 168). As Christians we must also consider our higher calling to serve others. “Let each of you look not only to his own interests, but also to the interests of others” (New American Bible Revised Edition, 2010, Philippians 2:4). We are given the opportunity to consider our higher calling and include that responsibility in our business strategy decisions.

ANSWER

Competitive Approach, Competitive Scope, and Decision Models

I agree that organizations find the competitive edge in daily operations so as to sustain and ensure delivery of services in the market (Negulescu, 2019). Competitive scope will ensure that employees focus on projects that benefit the company rather than wasting time and resources on those that have no outcome in the future. Competition from institutions offering similar products will help the company in making key decisions on operations and on ways to improve services so as to attract more customers which will have the company earning profits. I concur that competitive approach help organizations make structures that allow production of goods and deliver services that are cheaper than its competitors hence more sales. I support that deciding on competitive scope will incorporate some decisions that will give an institution an edge in the market based on measures taken.

In improving delivery to reach a wide area, it will build consumer’s confidence in dealing with the products that the enterprise produces thus creating loyalty and good relationship between them (Khadka & Maharjan, 2017). I am in consent to geographic scope that competition from other institutions will ensure an improve in delivering quality services to customers so as to maintain them from running to your rivals. The location of a business is an advantage to an organization in the market if the services are of quality or have a strategy that surpasses that of its rivals. I agree that distribution scope will help a company to determine what the consumers in the area need thus enabling the production of products they want hence a better advantage over the competitors (Porter, 2017). Decision model helps an enterprise come up with ideas and decisions that help a business make profits. It is of value that choices made from the process of decision making are that there have to be strategies in place to accomplish so as to assist the company in running the daily operations. As an establishment embarks on its strategies and decision making processes, the goal should be to make it sustainable in the operations and incorporate decisions that offer better and quality services.

References

Khadka, K., & Maharjan, S. (2017). Customer satisfaction and customer loyalty: Case trivsel städtjänster (trivsel siivouspalvelut).

Negulescu, O. H. (2019). The importance of competitive advantage assessment in selecting the organization’s strategy. Review of General Management, 29(1), 70-82.

Porter, M. (2017). Strategy: Creating and Sustaining Competitive Advantage. Keynote Speech on Strategy. Institute for Competitiveness, India. Available at: https://www. youtube. com/watch.