TOPIC 7 ORGANISATIONAL STRATEGY
These resources must fulfil at least four conditions in order for an organisation toestablish its competitive advantage, these are (1) valuable, (2) limited, (3) difficultto be copied and (4) no replacements.The use of valuable resources will increase the efficiency and effectiveness of theorganisationÊs operations. An example of an organisationÊs valuable resources isthe possession of sophisticated and latest technology. Nonetheless, the elementsin a business environment such as changes in consumer taste, action of competitors, technology advancement and others, can affect the resources thatwere previously valuable to be of less value now.In order to maintain competitive advantage, these valuable resources have to belimited. This means that they are not owned by the competitor. Even if there areother people who have the said resources or such capabilities, the numbers arevery limited.Apart from that, the resources owned must be difficult to be copied. This meansthat the valuable and limited resources cannot be copied or are too expensive to be copied by competitors.Finally, these resources must also be irreplaceable. This means that there are noother resources that could provide the same results or interest such as the oneproduced by the said valuable resource.In summary, in order to establish a strategy, the organisation must firstly identifyits strengths (that is the competitive advantage) it owns. This identification isimportant to ensure that the competitive strategies established are based on thesestrengths.
PROCESS OF STRATEGY ESTABLISHMENT
Organisations establish strategies to maintain its competitive advantages. Thestrategies are established based on the three steps illustrated in Figure 7.1.
Some organisations prefer to use old strategies to compete with othercompanies and it is not impossible for them to fail in such competitions.How important are the changes of strategies to an organisation?