Example Of The Strategic Landscape Of The Modern Corporate World Case Study
Type of paper: Case Study
Topic: Cost, Competition, Leadership, Psychology, Strategy, Sony, Company, Market
The companies those face the managerial dilemma of balancing the need to follow cost leadership strategy along with that of differentiation have to super-active their production departments in order to enhance efficiency of the operations so that they can earn greater margins by driving the organizational costs down. However, driving down the cost alone will not result in strategic advantage of gaining competitive edge in the market, and therefore, the marketing department has to lend a hand regarding creation of psychological differentiation in the minds of the clients. In this way, the contributions of advertising and production go hand in hand in order to provide the organizations with sustainable competitive advantage in this regard. Sony and Toyota are differentiating their products by remaining within the price range of the target segments of the market.
The company can gain competitive advantage in a hypercompetitive marketplace by initiating a price war in order to provide the customers with significant cost advantages so that their basic psychological need of practicing economic rationality can be activated. The formable cost structure of the company if maintained over a long term period can cause the competitors to disinvest from the market due to lessening profitability, and therefore, the competition will return to normal. The McDonalds has successfully implemented the cost leadership strategy that made the competing forces irrelevant in the entire America and Europe as well. The company used its economies of scale in order to outwit the swirling competition that developed as a rouse in fast food industry recently. The humans have a significant urge to save money because they are living in the recessed world, and therefore, cost reduction is a viable technique to fight increasing competition.
The humans had a tough time with reference to the need of sharing with others, and the economies were made of hunters and gatherers in the prehistoric times. However, the similar behavioral regimes are going on in the present times as well because too much strategic coalitions cause the interests of different parties to collide, and therefore, there arise conflicts. The prevalence of disagreements gives birth to distrust and the partnerships after that fall apart fast. The partnerships work like marriages, and therefore, the relation should serve the interests of all the involved parties. However, the partners in quantity of two or three maximum create an effective working environment, but more parties soon cause conflict of interest to develop. The alliance of Sony-Ericsson created mobile products with differentiated identity, and earned a lot of profitability years ago. The Sony had the money to invest, and Ericsson had the technological knowledge to make the product possible so they created a perfect marriage that lasted until the objectives did them apart.
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