| Porter’s Generic Strategies Essay Good thesis writing Essay done for you
This is a reputable retail company that had or made strategic changes to ensure that they continue being profitable. The ASDA stores were founded as a farms store back in the year 1949. In the United Kingdom it was found to be among the largest food retails. ASDA prices were slightly lower than those of their competitors. Its main objective was to see that all the |ers needs were put first and at reasonable price that would be affordable to all and sundry. The retail company initiated interest in the clothing and jewels sector which later flourished. This was greatly influenced and facilitated by the online services that it introduced. Generic strategies have been derived and adopted to ensure that they achieve economic profits (Eldring 2009, p. 6). It also ensures that the company remains competitive in its day to day activities. The sole objective of running a business is to acquire profits. Profits can be described as the difference between the price and the cost.
The strategies were geared at ensuring that the company maximizes its profit by putting two keys and important aspects. Differentiation and cost leadership need to be emphasised to the management to ensure that they follow to the latter. These aspects were in respect to ensuring that the costs either were lower or higher than those of the competitors. The need to adhere to uniqueness was imperative so as to acquire success. Porter stated clearly that being effective in respect to operations was not a strategy at all. He was of the view that emphasising on management tools would go a long way at ensuring that the operational effectiveness of the supermarket improved greatly (Lamberg et al. 2006, p. 229). These tools included intense competition, outsourcing in the markets and partnering with the relevant stakeholders in the market. However, with all this inclusions, one realises that profits are not sustained nor are they of great magnitude. Porter stated that the main reason for this is because the administration fails to differentiate between these two vital aspects. They have completely different ways of operating. He stated that operational effectiveness was whereby there is similarity in the kind of activities that different competitors participate in. However, there would be a major difference in terms of performance. The company will be in a position to use its resources well together with its inputs. Strategy, however, would actually be the opposite whereby the activities performed will vary or be completely different. In the same case the activities would be the same but be performed in varying manners.
According to McLoughlin (2010, p. 128), porter emphasised on the need to carry out an analysis and research since a successful company will achieve this through finding differences with its rivals. It must ensure that |ers get quality services that are of the greatest value. This could come in reduced costs and help to employ all the aspects of operational effectiveness. The productivity frontier goes along way into ensuring that maximum and desirable results are achieved. It is basically a combination of all the best practises in a given time frame which are relevant and can be used to facilitate profits. They may vary from good technology, efficient management strategies and the purchase of the inputs. The mangers have to keep on tabs new approaches and also techniques relevant to the industry (West 2001, p. 9). They should always carry out training and empowering the staff. Competition is obviously what necessitates this since it shifts the frontier outwards and the standards are raised for all who are in this field (Royer 2005, p. 94). However, according to porter, competition should not only be based on operational effectiveness since it may lead to poor returns like it happened in Japan. This may result to the inability of the companies to remain in the businesses meaningfully.
Porter was of the opinion that one had to be unique in the quest to attract more consumers. The need to be different was imperative at ensuring that activities vary. This also increased their value. Strategizing was for purposes of seeing to it that the there is deviations from the obvious. There were three main positions of strategizing. The variety based positioning was not consumer oriented and was more about what the company was in a position to undertake. The needs based positioning was, however, |er oriented. The |ers needs were given priority and it basically targeted them. Activities would, thus, be mended to suit their diverse needs. Access based positioning, on the other hand, was more concerned about the accessibility of a targeted group of |ers that could only be reached through a different approach (Thompson 2010, p. 27). They would, thus, search for the best way to reach them through modified set of activities.
Porter underscored the importance of positioning but stated that it is not a guarantee to success because it would be very easy to imitate this and help also to adopt the straddling approach. The management has to ensure strategic positions can be maintained through tradeoffs. Positioning was also vital since it dictated how the different activities relate to one another (Kossowski 2007, p. 5). Porter also described Fit as an important component that was responsible for ranging competition brought about by discrete activities. The first order fit was purely to do with consistency. Consistency was vital in ensuring that there was smooth communication among all the relevant stakeholders. The second order fit came in during reinforcement while the third order fit in Porters description was purely for purposes of discouraging repetition and wastage. At this stage, coordination was, thus, imperative (Cunill 2006, p. 5). Henry Mintzberg, wrote a book in 1994 that was in total contrast to Porters work in the book, The Rise and Fall of Strategic Planning he defined strategy as a plan that shows the means of moving from here to there.
ASDA can be viewed as a monopoly and it is not a wonder that it came under investigation by the monopolies commission. It becomes a challenge to meaningfully compete with this well established giant. It would require enormous resources and a clearly organized supply network. ASDA has involved itself in a product selling that has no substitute and importance of which is vital. Food cannot be substituted for anything else and it continues to be part and parcel of our daily lives. Food alone and drinks contribute to a huge expenditure in all homes. This ensured that the company will be sustainable in the long term. Among other company strategies that they employed was ensuring that they have a variety of the products (Haberberg & Rieple 2008, p. 174). This would attract many people and |ers who are willing to try new products day by day. The after sales services that they engaged in attracted many |ers. Gifts and promotions would be available especially in the festive seasons. They made the place hospitable and warm. |ers were all looking forward to their next shopping spree. ASDA created a very healthy relationship with its suppliers and lower prices especially on their own producers.
The company put mechanisms to ensure that they brought about corporate social responsibility. The company gave back to the society. |ers got the impression that for that company it is not all about getting money and making huge profits. This brought about unquestionable loyalties. The company was also greatly favoured by the enactments that were legislated concerning the retail industry (Bremmers, Omta & Trienekens 2004, p. 482). The economy of the British government was consolidated by this industry. It employed millions of people. It was thus imperative to ensure that there was a conducive environment for production (Carr 1990, p. 30). ASDA ensured that delivery of services was always on time and as scheduled.
ASDA adopted the smart price strategy which came at handy in ensuring that their goods accounted for a significant percentage in the British market. This was also contributed by their fair prices. Smart price was also very effective in ensuring that promotion is done and the costs of advertising are waived. The company also adopted strategies in which they would minimise production costs. According to Galliers (2009, p. 74), transportation of goods would be cut down since the products would be manufactured locally at the different hubs in the country. This was in respect with the demand in certain areas. It took a long time to ensure that there were no inconveniences in terms of delays or accidents leading to destruction of supplies. The company spreads its outlets through creation of more stores country wide. This is basically to increase the market share. The services they offered were free of any discrimination and the supermarkets were designed to suit this like adaptive structures to suit the disabled. They introduced branded items which could be returned by the |er if they deemed it not to suit their needs. Refunds were also acceptable and ASDA was keen to give immediate feedback whenever there were any queries.
The department of information and technology was also at hand in ensuring that services became more effective. They replaced devices that are held by the hand with the more sophisticated PDA like devices. The store activities became easily accessible. Orders could now be placed via the website and later be sent to the nearest local stores. Their low pricing strategy however was the major influence that transformed their fortunes. It was easier than vigorously advertising an expensive product that may be beyond reach for many consumers.