Reference no: EM132410497

INSTRUCTIONS

1. Summary of the author's Main Thread - no less than 200 words

2. What you agreed with, did not agree with and why - no less than 200 words

3. Must ONLY use the references below

4. Summary must be fully related to the ENTIRE article below

Introduction

An organization's competitive approach can be a key component in their overall strategic plan. Organizations will find there are many basic paths they can choose to take when deciding on a competitive strategy. It may be beneficial for organizations to choose the plan that best allows them to reach their strategic goals. Much in the same way organizations may want to analyze how narrow or broad of a scope they wish to pursue. Organizations wishing to be leaders and innovators may want to understand the chasm model.

Process: Competitive Approach

Organizations should consider the impact their competitive approach will have on the direction of the organization's strategic plan. The organization's competitive approach is important because it represents how the organization is going to align itself against its competitors and this will give direction on how the firm will respond to future market needs, and this will align their short-term decisions with their long-term goals (Brown & Blackmon, 2005). Competitive strategy lies at the core of how organizations will compete and distinguish themselves from others in the industry. As such, it seems a competitive approach should be one of the major points organizations should carefully consider when developing a strategic plan.

There are many basic competitive approaches organizations can choose to adopt. Gamble, Peteraf, and Thompson (2019) list the five basic strategies as low-cost provider, a focused low-cost provider, broad differentiation, focused differentiation, and best-cost provider. Organizations may find it beneficial to align their areas of competency to find ways they can create a competitive advantage which fits into one the five basic approaches. A great recent example of how an organization has used its areas of competency to compete is the Tesla pickup reveal. Tesla has pursued a strategy where they focus on the consumers who are willing to pay a premium for cool-looking electric vehicles; the unveiling of a very different looking pickup truck stays true to their main strategy of focusing on those consumers who do not necessarily fit into the mold of consumers who usually purchase pickup trucks (Higgins & Somerville, 2019). Though Tesla has continued to focus on a niche market segment, they have been able to draw the attention of the world for their unique approach to design and engineering of vehicles.

Strategic Thinking: Competitive Scope

Competitive scope can be one of the key factors in deciding the strategic plan for an organization. Two key areas of scope include geographic scope and production/distribution scope. Geographic scope can include markets in which the organization wishes to compete or produce in. Production and distribution scope can include the product offerings and methods of distribution the organization chooses to use.

Geographic scope. The geographic scope of an organization can be a key factor in their strategic plan. Organizations may find it beneficial to analyze the risks and benefits associated with expanding their geographic scope. Organizations can choose a narrow scope where they would be limited to fewer local market segments, or they can choose a wider scope an operate and distribute their products in international markets; wider scopes may open the organization to untapped markets but it can also expose them to risks related to the external environments they operate in (Kim, 2016). Organizations should analyze the markets they plan to operate in and decide whether the benefits outweigh the risks.

Production scope. The scope of production and distribution can be an area which is more flexible for organizations. These areas can be changed to help the organization meet its strategic goals. Organizations may choose to reduce their product lines or change their methods of production and distribution to meet t economic constraints. A great example was the Apple case where Jobs rescued the organization by drastically reducing product offerings, reducing retailers down to one, and cutting distributors (Rumelt, 2011). Sometimes, it is necessary for organizations to limit their production and distribution scope to survive in tough times.

Decision Model

The chasm model is a decision model which may be beneficial for organizations trying to distinguish themselves from the competition. The chasm model represents the transition from the early adopters to the skeptics, where the early adopters must get the product or service across to the large mass of skeptics(Krogerus&Tschäppeler, 2018). This chasm model represents the risk organizations may take when they decide to launch an innovative product that may not be directly translatable to the masses. Like the Tesla example mentioned earlier, by choosing to go completely against traditional designs, organizations will have to convince the skeptical consumers to adopt a product that will set it forth on the path of an established product (Krogerus&Tschäppeler, 2018). Organizations can use the chasm model as a reminder of the work they must put in to ensure their innovative products move past the chasm and reach their target markets.

Conclusion

Competitive strategy and scope can have the potential to greatly influence an organization's direction. Organizations should decide which basic competitive approach best fits with their areas of proficiency and where they can create competitive advantages. Organizations should also choose which markets they will be focusing on and how broad or narrow their product offerings and distribution methods will be. Together, these factors can determine which direction the organization will take when approaching the competition. Differences amongst organizations is what can create an advantage; however, organizations should keep the chasm model in mind as a tool and reminder that when launching highly innovative products, there may be some convincing needed to appeal to the masses. 

References

Brown, S., & Blackmon, K. (2005). Aligning manufacturing strategy and Business-Level competitive strategy in new competitive environments: The case for strategic resonance. Journal of Management Studies, 42(4), 793-815. doi:10.1111/j.1467-6486.2005.00519.x

Gamble, J., Peteraf, M., & Thompson, A. (2019), Essentials of Strategic Management, (6th edition). New York, NY: McGraw - Hill Higher Education

Higgins, T., & Somerville, H. (2019, Nov 23). EXCHANGE --- tesla tries to break the mold for pickups. Wall Street Journal Retrieved from https://ezproxy.liberty.edu/login?url=https://search-proquest-com.ezproxy.liberty.edu/docview/2316971733?accountid=12085

Kim, M. (2016). Geographic scope, isolating mechanisms, and value appropriation. Strategic Management Journal, 37(4), 695-713. doi:10.1002/smj.2356

Krogerus, M., &Tschäppeler, R. (2018), The decision book: 50 models for strategic thinking, (Revised edition.). New York, NY: W. Norton & Company, Inc.

Rumelt, R. (2011), Good strategy/bad strategy: The difference and why it matters., New York, NY: Crown Business