Conclusion Introduction Conflict, when properly managed, is a positive source of competitiveness and collaboration in a workplace. On the other hand, when unmanaged, conflict can create division, low morale, and chaos in the same environment. Executives and managers must learn to identify constructive conflict and manage it effectively.
To strive in this competitive environment the firms should have an edge over the competitors. To develop competitive advantage, the firms should produce good quality products at minimum costs etc.
Therefore, it becomes necessary for the firms to have a strategic edge towards its competitors. One such competitive strategy is overall cost leadership, which aims at producing and delivering the product or service at a low cost relative to its competitors at the same time maintaining the quality.
According to Porter, following are the prerequisites of cost leadership Cherunilam, To sustain the cost leadership throughout, the firm must be clear about its accomplishment through different elements of the value chain. Figure-1 shows a matrix of the three generic competitive strategies and their interrelationship given by Porter.
Three Generic Competitive Strategy This strategy involves the firm winning market share by appealing to cost-conscious or price-sensitive customers. This is achieved by having the lowest prices in the target market segment, or at least the lowest price to value ratio price compared to what customers receive.
To succeed at offering the lowest price while still achieving profitability and a high return on investment, the firm must be able to operate at a lower cost than its rivals. There are three main ways to achieve this. The first approach is achieving a high asset turnover.
In service industries, this may mean for example a restaurant that turns tables around very quickly, or an airline that turns around flights very fast. In manufacturing, it will involve production of high volumes of output. These approaches mean fixed costs are spread over a larger number of units of the product or service, resulting in a lower unit cost, i.
For industrial firms, mass production becomes both a strategy and an end in itself. Higher levels of output both require and result in high market share, and create an entry barrier to potential competitors, who may be unable to achieve the scale necessary to match the firms low costs and prices.
The second dimension is achieving low direct and indirect operating costs. This is achieved by offering high volumes of standardized products, offering basic no-frills products and limiting customization and personalization of service.
Production costs are kept low by using fewer components, using standard components, and limiting the number of models produced to ensure larger production runs. Overheads are kept low by paying low wages, locating premises in low rent areas, establishing a cost-conscious culture, etc.
Maintaining this strategy requires a continuous search for cost reductions in all aspects of the business. The associated distribution strategy is to obtain the most extensive distribution possible. Promotional strategy often involves trying to make a virtue out of low cost product features.
This could be achieved by bulk buying to enjoy quantity discounts, squeezing suppliers on price, instituting competitive bidding for contracts, working with vendors to keep inventories low using methods such as Just-in-Time purchasing or Vendor-Managed Inventory. Wal-Mart is famous for squeezing its suppliers to ensure low prices for its goods.
Dell Computer initially achieved market share by keeping inventories low and only building computers to order. Other procurement advantages could come from preferential access to raw materials, or backward integration. Some writers assume that cost leadership strategies are only viable for large firms with the opportunity to enjoy economies of scale and large production volumes.
However, this takes a limited industrial view of strategy.Wal-Mart employees are referred to as ‘Walmartians’ which is a sign of a unique culture shared by them.
This culture is responsible for a company of this magnitude to be able to sustain its entrepreneurial spirit decade after decade. NATIONAL FORUM OF EDUCATIONAL ADMINISTRATION AND SUPERVISION JOURNAL VOLUME 29, NUMBER 4, 1 Understanding Organizational Culture: A Key Leadership Asset.
Strategic implementation is a key ingredient of modern business: Once an organization creates a strategy to meet its goals, implementation is the next step for successful execution.
Walmart Announces Organizational Changes Today, Walmart announced a series of organizational changes across the business to align its structure with the company's three priorities -- growth, leverage and returns -- to deliver more value for both customers and shareholders.
The strategy statement of a firm sets the firms long-term strategic direction and broad policy directions. It gives the firm a clear sense of direction and a blueprint for the firms activities for the upcoming years. INTRODUCTION TO MARKETING.
Background. plombier-nemours.coml definitions have been proposed for the term marketing.
Each tends to emphasize different issues.