Concept of Competitive Strategy and Business Modelâ€Free Answers

Questions: 1.What is Strategy.2.Discuss about the Business Model Innovation. Answers: 1.Strategy In the video, author explained the various concepts of strategy. There exist various fundamental differences in strategy and tactics. It is important that organizations and leaders must understand the differences between strategy and tactics. The things like tactic, goals and objectives are not strategy in place but a mere part of strategy. One of the key learning from this video is that vision is an important part of strategy. The focus on vision is particularly more important as only senior leaders and managers can bring the vision in the organization. Author compared this scenario with a war scenario where only a general can communicate the vision to the commandos. The same can be replicated to modern day organizations where the senior leaders can communicate the vision to low level employees. Therefore, it is important that strategy must have a long-term plan in place (Gobble, 2012). It is equally important that the leaders should be able to communicate the vision to employees. T he entire strategy can get fail if the vision is not communicated to employees. A key part of strategic formulation is vision. It is important that vision should not only focus on internal environment but also on external environment. For example, vision must focus on the value add that the organization tries to bring in the market. It is important that a strong focus should be there on the unique capabilities of the firm. 2. Business Model Innovation The video suggests that innovation must be an important part of the business model. The large companies like Nokia, Kodak, etc. failed only because they were not able to foresee the future. These companies were too lazy to change and as a result they failed. It is rightly said in the video that today success could be the reason for tomorrow failure as organization tends to reduce the focus on innovation cycle. The key lesson learned from this video is the use of innovation in key competitive advantage. The video explained that customer value is linked to innovation and this helps organizations to create competitive advantage. For example, Apple creates high customer value through differentiated product. Dell uses innovation to attain cost leadership in its products. There is a fundamental difference between the strategies of Apple and Dell. However, the common thing between these two firms and various other successful firms is the use of innovation. It is important that organizations must have an open system of innovation to attain competitive advantage (Gallen, 2013). In my opinion, implementing the Open Systems Theory can be a challenge, however, the adoption of an Open System is a worthy approach due to the advantages this approach provides. For example, an organization that implements and uses an open system is better suited to adopt new changes in the organizational environment and changes that can affect the social, economic, or cultural nature. Application: The concept of an effective vision as a part of strategy is particularly more important for the large and multinational organizations. Lets apply the above learning to Apple Inc. Apple has its presence in almost every part of the world. However, there are some differences when Apple has to manage its subsidiary in Australian market and in Indian market. The vision in Australian market could be product differentiation. However, when it comes to Indian market, Apple has to change its vision to also include the elements of effective pricing. There are differences between the Indian consumers and Australian consumers. Therefore, it is important that the strategic vision should also change when the senior management develops the strategy for Apple in Australian market and Apple in Indian market. It is suggested that the management of Apple Inc. should take the support of local leaders and mangers before they develop the strategy and communicate the vision to local employees. The local lea ders would have a better understanding of local workforce and they have better connection with the low-level employees to communicate the vision (Kryscynski, 2015). At the same time, it is important that the drivers of future goals or the drivers of vision must be effectively communicated to various internal and external stakehol The idea of business model innovation is particularly more useful for startups. It is critical that startups must have a core competency that could be used to provided added value to consumers. Lets take the example of Flipkart (Indian e-commerce startup). The Indian e commerce eco system is a tough eco system with the presence of large and establish players like Amazon and eBay (Zeithaml Bitner, 2010). The startup companies like Flipkart could be successful in Indian market only when they can provide the value that other competitors like Amazon cannot. This value could be provided in terms of cost leadership strategy or in terms of product or service differentiation or the combination of both (Chesbrough, 2010). The use of business model innovation would help Flipkart to analyze the internal and external environment and then use innovation as a tool to deliver values to consumers. As for potential problems, an organizationmight encounter when using business model innovation, I woul d argue that business model innovation may not fit well withall management structures and organizational focus. However, the startups and small organizations like Flipkart should not have much of the problem to implement the business model innovation in workplace. It would eventually help Flipkart to give tough competition to the likes of large players like Amazon in Indian market References Chesbrough, H., 2010. Business model innovation: opportunities and barriers.Long range planning,43(2), pp.354-363. Gallen, S. 2013. Business model innovation. Retrieved from: https://www.youtube.com/watch?v=B4ZSGQW0UMI Gobble, M.M., 2012. Innovation and strategy.Research-Technology Management,55(3), pp.63-67. Kryscynski, D. 2015. What is strategy. Retrieved from: https://www.youtube.com/watch?v=TD7WSLeQtVw Zeithaml, V.A., Bitner, M.J. and Gremler, D.D., 2010. Services marketing strategy.Wiley International Encyclopedia of Marketing.