Strategic Management

(Assignment 2- Case Study)

Table of Contents
Introduction................................................................................................................................1

Chapter 1: IMI’s Strategy Purpose Evaluation and Utilisation of Knowledge and Skills.........2

1.1. Evaluating the Purpose of IMI’s Strategy...................................................................2

1.2. Combination of Knowledge and Skills........................................................................3

Chapter 2: Evaluation of IMI’s Niche Market Strategy and Recommendations.......................5

2.1. Reviewing IMI’s Niche Market Strategy....................................................................5

2.2. Recommendations.......................................................................................................6

Conclusion..................................................................................................................................8

Reference list..............................................................................................................................9

List of Figures

Figure 1: Competitive Strategies................................................................................................6

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Introduction
Considering organizational strategy, employees can use their knowledge and skills to
integrate functional activities in an organization. The strategic purpose can be translated too.
To ensure competitive positions in markets, organizations implement several strategies
(Cullen, 2014). The case study of IMI, an engineering firm operating in over 50 countries,
reflects on strategic management and competitive advantages. IMI capitalises its engineering
advantage by utilising the talents and expertise of its staff. Various issues relating to the two
questions are examined, with a focus on IMI's strategy and competitive edge. Other
competitive strategies are used to inform some of the recommendations.

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Chapter 1: IMI’s Strategy Purpose Evaluation and Utilisation of
Knowledge and Skills
1.1. Evaluating the Purpose of IMI’s Strategy
Business strategies can be varied based on the purpose or objective an organization holds or
perceives to attain its long-term target. For an organization, reducing costs and maximising
profits can be major purposes. It can be determined to expand a broad segment or a focused
market. Even, the orientation of customers can influence the purpose of an organization. in
terms of strategy, the purpose can be the removal of uncertainty and utilisation of full
potentialities (Grant, 2013). To evaluate a certain degree of strategy, an organization must
ensure some key prospects. Firstly, reflection on the purpose of organizational strategy can be
a source of evaluation. Some organizations highly focus on the enhancement of quality. Some
determine to reduce the costs (Barney et al., 2018). In the case of global-oriented
organizations, many businesses try to expand the market for their standardised products, as
this strategy reflects on a single market. Whereas, some businesses highly aim to serve in
certain niche marketplaces. In the whole process, the purpose of strategy determines the
strategic choice. Suppose, a business that is determined to expand the market for its product
at the global level can choose the cost leadership. The reason can be its purpose which
reflects on a broad perspective (Jenkins and Williamson, 2015). It needs to minimise the costs
to grab a greater market share.

In the given case, IMI, a reputed engineering company, established its strategy to capitalise
on opportunities. IMI has a wide range of expertise in the field of engineering. Its strategy
reflects on the emerging market needs in respective niche or focused markets. To serve
various requirements of different niches at relatively low costs. Its “engineering advantage”
gives IMI a competitive edge over others. The company initialised various dimensions of its
engineering advantage to produce several sorts of products such as specialised valves for
different industries (Freedman et al., 2017). Comparably, competitors cannot exploit such an
advantage that allows IMI to have cost leadership in different segments. In the evaluation of
IMI’s strategy and its purpose, it can be said that the company mainly follows a niche market
strategy and the purpose is to establish a long-term presence in various niches globally. IMI is
also successful to translate its purpose through its strategy and action that gives it a
competitive advantage and helps to expand worldwide (Wang, 2018). And, the ultimate
reflection is its “sweetspot”- a three-factor objective related to IMI’s strategic convergence

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that highlights the utilisation of knowledge and skills, becoming a market leader in niches
and increasing profit margin. In general, IMI’s strategic purpose is competitive and reflects
its long-term expectation from markets and stakeholders.

1.2. Combination of Knowledge and Skills

Knowledge and skills are crucial assets for organizations. The creation and development of
these two assets can dynamically shape the whole organization. By doing so, an organization
can exploit existing and imminent potentialities. Employees can perceive market and
customer requirements. They can utilise their knowledge and skills to understand the gap
existing in an existing or emerging market. As internal customers, employees can reflect on
various activities of organizations (Rothaermel, 2019). Their practical and academic
knowledge can be implemented to the strategic objective. Based on the level of expertise and
knowledge, an organization can dream and desire some big goals to be attained in the long
run. The importance of knowledge and skills available in organizations is inevitable and
many organizations are focusing on the concerns related to knowledge and skill development.
Reflecting on the utilisation of knowledge and skills to attain competitive advantage, the
main success an organization can experience is an increasing rate of innovation that can entail
prospective outcomes for the organization (Lynch, 2018). Even, that allows businesses to
have competitive advantages.

Here, IMI has done a great thing regarding this concern. IMI focuses on introducing new and
innovative products to selected niche markets to increase its operating margin and become a
market leader. Serving selected markets with differentiated products requires a higher-level
knowledge and skills from employees and management, as this plan requires a collective and
strategic approach from both stakeholders. In the given case, IMI’s engineering skills in fluid
technology reflects on five core segments- Fluid power, Severe service, Indoor Climate,
Beverage dispense and Merchandising. IMI can enable to utilise the experiences, skills and
knowledge of its employees that helps IMI serve niche products for several niche markets
(Martin et al., 2019). Employees can focus on productive engineering that requires less
product cost and makes compatible products for customers. Even, they can reduce the
manufacturing costs through the optimised use of the supply chain. IMI’s sweetspot
encompasses half of its operations and is expected to be extended to 70% within five years.
Such long-term can be possible through the proper utilisation of its employees’ skills and
knowledge. Without these, IMI might not perceive such ambitions like to be a market leader
in its selected niches. Organizational skills and knowledge allow IMI to identify the existing

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gaps in chosen markets and fulfil those needs with required products, as its engineering can
solve various industrial necessities regardless of the size of operations (Bozick et al., 2019).
Thus, IMI’s competitive advantage is an entailed fluke of its organisational skills and
knowledge. IMI’s strategic leadership allows such involvement from employees to showcase
their skills and knowledge in problem-solving and decision-making that giving IMI a
competitive advantage.

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Chapter 2: Evaluation of IMI’s Niche Market Strategy and
Recommendations
2.1. Reviewing IMI’s Niche Market Strategy
Niche market refers to serving the needs of a particular market with a perfect product or
service. It is one of the strategies that Michael Porter mentioned. Niche market can be a
perfect choice for an organization when it encounters numerous challenges and a higher level
of competition in markets. Businesses try to perceive certain requirements of a market and
align those requirements with their desired scopes. In the given case, IMI reflects on this
strategy. Before evaluating its strategy, its external and internal environment is taken into
consideration (Krug, 2015). SLEPT analysis is given below.

Social: It studies the population related to age, gender, demographic factors and so on. In the
UK, the increasing rate of the ageing population affects the workforce and skill requirement.

Legal: In the UK, some legal obligations related to the health and safety of employees and
the environment are required to be implemented. IMI needs to consider these issues, as legal
requirements tend to vary among countries.

Economic: It underscores interest rate, inflation, economic growth and so on. Here, the
ongoing global economy is inclining recession (Aguilar, 2017). As IMI intends to operate
globally, it needs to consider this point.

Political: It reflects on how political settlements and governments’ positions influence the
conduct of a business. In the given case, the government is intended to form policies by
considering the environmental factors and climate changes (Viljoen and Dann, 2013). This
may require IMI to re-engineer some activities, as its specialisation lies in fluid engineering.

Technological: It encompasses the growth of technology and technical influence. The

increasing use of the Internet can make global operations smoother and fast.

In terms of IMI’s internal factors, IMI has been working to ensure more safety for its
employees in the workplace. It is ensuring a collective and participative environment for its
stakeholders, such as customers, employees and others. IMI focuses on strategic leadership
in which emphasises “Key Account Management” (KAM). This approach allows employees
to provide insights on customer-oriented details and in-depth market information to find out
technical solutions for engineering purposes. It has the “engineering advantage” to exploit

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various opportunities at the global level. IMI’s supply chain management ensures a higher
optimisation of its operational networks. Even, it can lower its manufacturing costs that allow
IMI to compete with others at a low-price tag. To ensure environmental sustainability, it
focuses on environment-friendly approaches (Gupta et al., 2018). IMI works for various oil
and gas suppliers whom it serves valves and other engineering products. Thus, it attempts to
excel the threshold and implement a new norm towards sustainable development.

Considering the discussion from the given case, it can be mentioned that IMI’s niche market
strategy is competitive and allows itself to make its strong presence in various niches, as it
operates in five core business segments- Fluid power, Severe service, Indoor Climate,
Beverage dispense and Merchandising, to fulfil various requirements. IMI’s utilisation of its
engineering advantage supports its long-term objective.

2.2. Recommendations
Strategy can be taken or implemented based on the purpose of an organization. Generally,
organizations follow key four strategies- cost leadership, differentiation, cost focus and
differentiation focus.

Figure 1: Competitive Strategies

Source: (Maritan, 2014)

Cost leadership can be a core advantage when an organization can provide products or
services at low cost than that of its competitors and is determined to serve a broad market.

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Whereas, differentiation strategy reflects on an organization’s ability to serve different
products or services in a higher competitive market. Niche strategy serves two segments-
cost focus and differentiation focus. In the cost focus segment, the organization is determined
to serve a product or service at a low price to a particular niche. Whereas in the
differentiation focus segment, the competition is narrow like cost-focused, but the core
advantage is differentiation (Maritan, 2014). In the provided case, IMI serves in five core
areas of fluid engineering. Each segment has different levels of requirements, such as fluid
power reflecting on manufacturing valves to provide air and fluid in several industries,
including medial, severe service emphasising on control the flow of gas and oil that requires
ultimate precision. Considering its cost structure, IMI’s organizational skills and knowledge
and supply chain network can be able to lower manufacturing costs while maintaining
quality. IMI’s ambition is to serve various niches globally and become a market leader. At
present, IMI follows a niche strategy, more specifically, a differentiation focus strategy that
allows IMI to serve different products to different niches (Lynch, 2021). Some
recommendations are given below by shedding light on these issues and three other
strategies.

Cost leadership: Considering IMI’s position, it has some advantages to lower manufacturing
costs, as its supply chain management is quite dynamic. It can lower its costs and focus on
the certain standardised product(s).

Differentiation: This strategy is more compatible with IMI. As it aims to serve various
niches globally and become a market leader, it can provide different products into chosen
markets. It can serve in several new countries and expand into various industries with
different products (Ansoff et al., 2018). In competitive markets, it can compete and become a
market leader.

Cost focus: IMI can also adopt this strategy. It can lower the cost but serve in smaller sizes
of niches. Here, the competition level would be lesser than differentiation.

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Conclusion
The report is about a case study of IMI, a well-known engineering organization. IMI can
exploit its engineering advantage with its employees’ skills and knowledge. Various concerns
related to the given two questions are discussed by highlighting the evaluation of IMI’s
strategy and competitive advantage. Some recommendations are given based on other
strategies.

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Reference list
Aguilar, F.J. (2017). Scanning the business environment. New York: Macmillan.

Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., (2018). Implanting
strategic management. Springer.

Freedman, L., (2017). The transformation of strategic affairs. Routledge.

Gonzalez, G.C., Doss, C.J., Kaufman, J.H. and Bozick, R., (2019). Supporting Middle-Skills
STEM Workforce Development: Analysis of Workplace Skills in Demand and Education
Institutions' Curricular Offerings in the Oil and Gas Sector. Research Report. RR-2899-
NSF. RAND Corporation.

Jenkins, W. and Williamson, D., (2015). Strategic management and business analysis.
Routledge.

Krug, J.A. (2015). Corporate strategy. Los Angeles: Sage.

Lynch, R. (2021). Strategic Management. S.L.: Sage Publications.

Lynch, R.L. (2018). Strategic management. Harlow, United Kingdom ; New York: Pearson
Education Limited.

Makadok, R., Burton, R. and Barney, J., (2018). A practical guide for making theory
contributions in strategic management.

Maritan, C.A. (2014). Competitive strategy. Cheltenham, Uk Northampton, Ma Edward

Elgar.

Mumford, M.D., Todd, E.M., Higgs, C. and Martin, R., (2019). What is needed to think
creatively at work? Knowledge and skills. In Creativity and Innovation in Organizations (pp.
41-68). Routledge.

Pandit, D., Joshi, M.P., Sahay, A. and Gupta, R.K., (2018). Disruptive innovation and
dynamic capabilities in emerging economies: Evidence from the Indian automotive
sector. Technological Forecasting and Social Change, 129, pp.323-329.

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Rothaermel, F.T. (2019). Strategic management. 4th ed. New York, New York: Mcgraw-Hill
Education.

Viljoen, J. and Dann, S. (2013). Strategic management. Frenchs Forest, Nsw: Pearson
Education.

Wang, V.C.X. (2018). Strategic leadership. Charlotte, Nc Iap, Information Age Publishing,
Inc.

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