STRATEGIES IN BUSINESS

Assalamualaikum, everyone:).
Before I start, let me ask you 1 question. Do you know what month we are in right now? hehe, yup of course in normal calendar, we are in the end of the year (November) but in Islamic calendar, we are in the sacred month of MUHARRAM or known as Maal Hijrah. So, let's hijrah (change) to better side and add our good deeds (amalan soleh). Hopefully, we can ISTIQAMAH in our 'amal'. Fighting!!!

STRATEGY TO BE COMPETITIVE

Today, we will learn some terms in business strategy (actually, it’s quite a lot..hehe). But, don’t worry, I’ll just make it simple..

  

To maximize the power of a strategy, the company can use:-

1) OFFENSIVE STRATEGIES

* Principle

  - focus in the competitive advantages

  - use all the resources to attack the rivals

  - employ the element of ‘surprise’

* Choosing the basis for competitive attack

  - avoid directly challenge rival’s strongest advantages

  - Be prepared for the threatened competitor’s counter- response

  - use the best strength to attack

* Choosing which rivals to attack

  - Market leader that vulnerable

  - Runner-up firm with weaknesses

  - Struggling enterprise in some area

  - Small local and regional firm

* Example:

Ø use/offer lower price – AIR ASIA

Ø leapfrog competitor by being first with future generation – GAMES

Ø pursue continuous product – APPLE

Ø adopt and improve – SAMSUNG ANDROID

Ø use hit and run marketing (guerilla) – promote through FACEBOOK, TWITTER etc

Ø   launch a preemptive strike – DUPONT

p/s: if the rival conquers the product segment, we have to do well in buyer segment to stay compete. (find other initiative)

2) DEFENSIVE STRATEGY

*Purpose

  - Lower the firm’s risk of being attacked

  - Weaken the impact of an attack that does occur

  - Influence challengers to aim their efforts at other rivals

  - Blocking the avenue

  - Signaling the challengers

p/s: good defensive strategies can help protect a competitive advantage but rarely are the basis for creating one.

TIMING FOR OFFENSIVE AND DEFENSIVE STRATEGIC MOVES

ü Knowing when to make a strategic move is crucial as knowing what move to make.

ü Moving first is no guarantee of success or competitive advantage.

ü The risk of moving first to stake out a monopoly position must be carefully weighted.

            So, as the leader of company, we should plan our strategy wisely and the most important thing is we have to make sure that the timing is also on our side. Sometimes, it's better to not make a quick decision as we may take a reckless step. To success we have to wait for the correct timing to make a move so that we can grab all the opportunities in front of us as what we planned.

3) BLUE OCEAN STRATEGY

Concept: new thing that no one had done yet

#1M4U

#e-bay

#Starbuck

#Fed Ex

#Cirque Du Soleil

HORIZONTAL

Concept: range of product/service segment that a firm serves within its focal market through –

1) Merger

2) Acquisition

-ex of merger: Bank Bumiputera + Commercial Bank = Bumiputera Commerce + Southern Bank = CIMB

VERTICAL

Concept: include all of the activities that make up an industry’s entire value chain, ranging from raw-material production to final sales and service activities

-ex: KFC outlet with Ayamas

Other terms in Business are:-

OUTSOURCING

Concept: involve contracting out certain value chain activities to outside vendors

STRATEGIC ALLIANCE

Concept: is a formal agreement between two or more separate companies in which they agree to work cooperatively toward some common objective.

JOINT VENTURE

Concept: is a partnership involving the establishment of an independent corporate entity that the partners own and control jointly, sharing in its revenues and expenses.

              In brief, after I learned this chapter, i realized that business area is a place for brave people and creative thinker as they have to take the risks to success (the bigger the risk, the bigger the profit). Not all people have the courage to put their money and their life to business (including me...hehe), so i give big salute to all businessman and businesswomen out there, cause you guys are amazing and hopefully, someday i can follow your step...:)

Hehe, i hope that all of you can understand all the terms above..:) See you next time. Wish you all a happy life...Assalamualaikum.

Chapter 5 - FIVE GENERIC COMPETITIVE STRATEGIES

Assalamualaikum. Good morning, everyone!! :)

As I  promised before this, right now i will share what i had learned in the Chapter 5, which was about FIVE GENERIC COMPETITIVE STRATEGIES. This tool strategy was originally came from Micheal Porter, who was also the ones that introduced The Five Forces.


Key factor that distinguish ones strategy from the other :-

• Market Target - Is the firm's market target broad or narrow?
• Competitive Advantages - Is the competitive advantage pursued linked to low costs or product differentiation?

The 5 Generic Competitive Strategies are :-

*LOW-COST PROVIDER - Striving to achieve lower overall costs than rivals on products that attract a   broad spectrum  of buyers. Successful low-cost leaders, who have the lowest industry costs, are exceptionally good at finding ways to drive costs out of their businesses and still provide a product or service that buyers find acceptable.

Example : AIR ASIA

*BROAD DIFFERENTIATION - Differentiating the firm's product offering from rival's with attributes that appeal to a broad spectrum of buyers. Usually, it use higher prices to recoup differentiation costs.

Example : APPLE 

*FOCUSED LOW COST - Concentrating on narrow price-sensitive buyer segment and on costs to offer a lower-priced product.

Example : GIANT

*FOCUS DIFFERENTIATION - concentrating on a narrow buyer segment by meeting specific tastes and requirements of niche members.

Example : FERRARI

*BEST-COST PROVIDER - Giving customers more value for the money by offering upscale product attributes at a lower cost than rivals. (combination of 4 strategies)

          So, it's up to the company which strategies that they want to use for their product. But, before that, the company must identify first, their strengths, weaknesses and competitive advantages, so that they can choose the suitable/best strategies to stay compete in the business area.

                                         

      I guess, that's all for chapter 5. I apologize for         the delay...huhu. 

      See you in next day with other interesting post       and with more pictures.

      Assalamualaikum:)