WEEKLY LEARNING DIARY

Weekly Learning Diary

Strategic management
Title: Competitive
Strategy & Value Chain
Analysis & cultural
Perspectives

By: Tauseef Ahmad

Id:181360175

Submitted to:
Prof Suleman Anwar
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Reporting:

In the video, Michael porter talked about competitive strategy. According to porter,

delivering sessions through video medium is more beneficial and effective. Portal said that

competitive strategy is the positioning of a company in a competitive environment.

positioning is not only included the product positing and marketing concepts but the overall

positing of the company involving all kinds of function like production, distribution,

logistics, and services, meant the whole picture of the company.

Developing a strategy:

How can we develop a strategy?

There are two basic areas we have to address in developing a strategy.

Structure of the industry in which we are competing and the 2nd one is company’s position

within the industry. Portal said that different companies of the same level, earn profit

differently, just because of the strategy they have planned. So our first area is analyzing the

structure of the industry.

Industry analysis

In any type of industry, no matters what they are producing, service or product or any type of

it is. There are five basic comitative forces:

Rivalry among Threats of

existing new entries Threats of
competitors substitutes

Bargaining Bargaining
power of power of
suppliers buyers
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These can be considered the determinants of profitability of any industry.

1. Rivalry

To measure the intensity of rivalry there is a number of determinants including,

industry growth, switching costs, product differences, barriers to exit, brand identity,

and diversity of competitors. Further porter shows different company’s progress and

profit like pharmaceutical and airline industries under these determinants. The

structure of an industry can be shifted or change by environmental forces like new

technology and by their new strategies.

There is another aspect that should be a focus on understanding the industry, attention

to significant forces, during industry analysis, is making sure to look constantly that

how the industry might be changed.it has been seen that companies have the power to

shape and change their destiny but at the same time, similarly, companies can destroy

their industry by not implication properly their strategic movements.

Threats of new entries:

This means increasing competition, entry of new people in the industry with new

ideas and the latest updated products.

Competitive positioning:

To be superior in your industry there should be a competitive attitude. A company

should always try to do batter from its rivals, this can be earning in term two

advantages, one is that your competitors cannot copy the product of yours, or the

other one is that you can improve batter than your competitors.
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Types of competitive advantages:

Low costs

The company is low costs in designing, delivering, and marking its products than its

competitors.

Differentiation:

A company can provide some kind of unique benefits, that its customers think are

important, and because of its uniqueness and importance, its customers paid premium

prices, which can leads to superior margins in turn to superior performance. These

two of the advantages can get by either the strengths or weaknesses of the company

by turning them into positive changes.

Competitive scope:

The scope can be broad or narrow if the industry offers wide ranges of products to

their customers, they have a broad scope and other companies recognized that they

can achieve competitive advantage wit a broad range of customers or with brad range

of products lines, therefore they pick a narrow scope.

So, these two areas, competitive advantages and competitive scope leads to the way of

generating strategy.

Cost leadership: a company with broad scope (ivory)

Cost advantage, if company want, must start with good products. If their product is

acceptable in quality, in features, meets the basic needs of customers, but low-cost

competitors’ do not offer this all. They just seek to produce a simple good product.

Successful industries choose different strategies, implement strategies over time and

remain consistent, respond to market changes

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Company with narrow scope: (La Quinta)

Important principles:

Focus strategy starts with choosing a particular target segment, whether its customers

or product line, or geographic region, but this target must have distinctive needs. And

then they service their target exclusively and they do not broaden their strategy just

for the sake of increasing customers.

Conclusion:

Cost leadership starts with a good product, it is not cheap about low-cost products but

to make choices about below costs. For success drawing advantages from many

resources. cost leader pays attention to coemption and makes costs a part of the

company’s culture.

Value change analysis and culture perspective

Industry value chain:

The main concern is to discuss the components of the process of raw material

extension to product and delivery to the final customers. Like suppliers,

manufacturers, distributors, retailers, and finally the customers. The supply chain is

also about setting cost prices with profits, like suppliers will get profit on a product by

manufactures and as they go on, till to the customers. Industrial structures are not that

simple, there are many suppliers, manufactures, distributer, and retailers working in

an integrated way, moving at the same time in the same industry.

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Value chain vs supply chain

The process of fulfilling the requests of customers, by involving all parties is called

value chain, also it is group activity which are inter related, used by compnies for

competitive advantages.

Supply chain management:

Right product on right time period with reasonable cost and delivering to the exact

place is the process of supply chain management. It can also call value facilitation.

Organization responsiveness vs cost

Develop right trade-off by material, cash, and information flow and services.

paradigms of supply chain management:

The ancient paradigm emphasized the culture of organization which focuses on short

terms/ contemporary performance.

New paradigm:

The organization focuses on activities in its area of specializations:

All parties of the chain get benefits, boundaries are dynamic and extended also they

deal with reverse logistics.

Is it supply chai or demand chain?

Supply chain:

The producer or supplier pushes goods and services along the supply chain in the

direction of the eventual consumer, which is known as the supply chain. After the

producer has launched the goods or services, there may be several stages. If there is a

demand, the Supply Chain indicates big stocks.

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Demand chain:

On the other hand, the demand chain refers to customers requesting products or

services as and when they are needed. Customers need items and services quickly in

this process, which is known as demand-driven. A Demand Chain will necessitate a

long lead time, as the demand will be sent back to the manufacturer, causing delays in

production and delivery.

Demand-driven supply network

It can be defined as a method of supply chain management, and the focus of this

method is to construct a supply chain to demand signals in response. A Demand-

Driven Supply Chain relies on information flows to bring all parties in the supply

chain together. it can always respond to changing market conditions, allowing it to

maintain or lower inventory levels while also decreasing the intrusive problem of

rushed orders.

Procurement:

Products or services purchaising, to persue business objective is the process of

procurement. Some time we can say that it is only the ultimate process of

ppurchaising, butt ofenly it used as entire act of Procurement . it is considered

necessary for any industry before finalizing its decision about purchaising. Companies

might be buyers or sellers in the process of procurement on both sides.

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Purchasing:

Purchaising can be elaborate as the process of procurement of products and services

in organized way on purchaising entity’s behalf. All required items are timely

ppurchaised with cost effective manners are ensured by Purchasing operations.

Department of purchasing is very important component of an manufacturing

companies, where number of quantity of raw material products are produced oon

regular basis.

Organization working online:

In the case of online working, the value chain will be

 Firm’s structure (finances, Online investors relations (information

dissemination)

 Human resource management (self-services personal, employee database)

 Technology development (knowledge directories access)

 Procurement

Company focus

A looking outside the company for gathering necessary data to make some strategical

decisions, understanding the need of customers. Also, helpful to know about the market

competition. It isn't an either/or situation for most firms. The majority of the time, a mix of

factors influences strategies and judgments. However, one viewpoint is frequently

dominating. Let's take a closer look at each viewpoint.

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Cultural competence:

If organizations are operating in more than one country, they have to confront a lot of

diversities, cultural conditions, constraints, and circumstances. So, we should aware of lower

context and higher context counties about operating the organizations to avoid cross-cultural

shocks. There are four components of measuring cultural competence.

 Awareness

 Attitude

 Knowledge

 skills

Awareness:

Awareness refers to being aware of one's reactions to persons who are different from oneself.

For example, A cop who knows that he is labeling persons who appear to be from Mexico as

"illegal aliens" shows cultural awareness. This group of people has elicited a variety of

responses.

Attitude:

Analysing personal views and values of cultural diffrences, stresson training to raise

awareness about cultural biasness and belifes are all considered as attitude’s components.

Knowledge:

The Knowledge component is a key part of the development of cultural competence. We can

all benefit from strengthening our cross-cultural effectiveness, regardless of whether our

attitudes toward cultural differences match our behaviors. One of the most prevalent goals of
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diversity experts is to build inclusive systems that enable individuals to operate at their

highest levels of productivity.

Skills:

To make cultural competency perfecty , skills sections is used. In organizations, to

interact indivually with others there is an important tool which is communication.This

includes nonverbal communication as like gesticulations and other nonverbal communication

that diverges by culture.

Understanding culture:

Lower impact or culture understanding is to recognize the differences, developing respect for

the differences, recompilation to resolve the differences and last is legalization and rooting.

Hofstede’s cultural dimensions:

Index of power distance

This is the process of tolerance and inequalities between the groups whor are in

power, and who dnt have it. A higher numbers of scores in power distance shows taht

societies supports all these inequlaites and power distribution hierarchally and also within in

the organization, members are awere from their status and that members of society will not

tolerate situations in which power is distributed unequally.

Individual and collection

In a socites the bont of people with one an other is reffered as indivuall and collection

component. If score are higher in this stage it means the indivual is not having interpersonal

skiils to interacts socially. Here member blame others for the acts and they do not accept

responsibility.Every indivuall is responsible for well being of other in a larger grops.

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Manliness and womanliness

The role of man and women , they are playing as a part of culture. In masculine culture duties

of men and women are not more overlapped, and men are expected to be forceful.because

being strong and showing achivents according to them are very brilliant qualities.on the

other side, in feminine culture, duties of men and women are overlapped, and modesty is seen

as a virtue.

Avoidance index:

This is the ability of the person to deal with anxiety. People try to make their life controlled

and prictable as much it possible in societies where Uncertainty Avoidance is. May be they

give up with it when they came to know that they are not able to control their life. These

individuals may refer to "maana" or place their fate "in God's hands."

Orientation long or short terms:

"Pragmatic Versus Normative (PRA)" was the early name for this area known as members of

society's time horizon. Countries who have with a long-term outlook are seems to be more

truthful, self-effacing, and thrifty. But the counties with shore terms orientation, have to make

their people to value ideologies, reliability, and truth more, and are more religious and

nationalistic.

Lenience and limitation

Hofstede's sixth dimension, which he found and detailed alongside Michael Minkov, is

likewise new, thus there is less evidence to go with it. Countries with a high IVR score allow

or encourage people to gratify their own desires and emotions, such as enjoying life and

having fun, relatively freely. There is more emphasis on repressing gratification and more
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regulation of people's behavior and behavior, as well as stronger social norms, in a society

with a low IVR score.

Relating Hofstede’s cultural dimensions with strategic management:

1. Priority to the induvial needs or considering the needs or goals or a firm/ organization

2. There is a difference between the rules for men and women in different societies like

masculines and feminine.

3. Willing with dynamics or giving preference to unknown systems

4. To what stance, people are comfortable with upward influence and inequality or

power distribution in society

5. Plans for future,

6. Gratifying basic drive or regulation of strict social norms.