discussion board external environment, resource based theory
1.What is a “niche market?
One might consider a niche market for a profitable opportunities especially as it applies to for those type of marketers who might have a brand name that might catches the attention of perspective customers.
For example, wife’s cell phone was losing power quickly after charging. She said I think I might need a new cell phone but before trading it in for a brand-new phone decided to checkout if new cell phone batteries are even offered by the original cell phone manufacture with no success. The local store indicated she might someone who species in batteries.
She called a “niche retail marketer” called “Batterie’s and Bulbs” who indicated they would replace the old battery with a new battery for $100 dollars. She did and she says it saved her at least $1,000 until she can get a better deal on a new phone.
The previous simple example is something you might be something to think about such a unique market segment. Can you think of a “niche” market that has develop into a profitable market of opportunity?
2. In Michael Porters video he speaks about organizations not being the “best” as we would think we would need to be like in sports but to have something that makes you unique against the competition.(2) This aligns with the competitive advantage in the Grant article and the “attractiveness” the product or service offering is compared to those offering a similar product or service.(1) When reading these I always reference the organization I currently and previously have worked for and when considering external environments, I believe Dow has a good strategy. Dow ranked 75th last year on the fortune 500 list (I know this from working there) and most organizations cannot get there without a great strategy. While I have my pros and cons of working for Dow, I can also see their great strategies as a global organization when it comes to major political events. There have been many very sad events happening within the world in the past few years; this is no secret, but Dow seems to always have a strategy to combat this. I personally believe on a global level this is their secret, their uniqueness, the “attractiveness.” Dow chooses wisely with whom and which countries they do business with and if they do not agree with something an organization or country is doing, they simply do not do business with them. I hate witnessed flags being taken down, as the final step before a page goes live on Dow.com I have witnessed country sites being removed and redirected. By no means is the organization I work for perfect, but I do believe putting values and beliefs of what is right and wrong and standing by them is giving Dow a competitive edge.
Of course, for every industry and organization what sets them apart from the rest should be something they are passionate about because in my opinion it makes it more authentic and relatable. There are several external factors to consider. Constant analyzing is crucial as the world is constantly changing and evolving.
Referenced
Grant, R. M. (n.d.). The Resource-Based Theory of Competitive Advantage: ImpHcations for Strategy Formulation. Retrieved March 27, 2024,.
Harvard Business School. (n.d.). You need strategy for Your Organization Prof. Michael Porter. Retrieved March 27, 2024, from https://www.youtube.com/watch?v=DViVtgD0xwE.
- Hoskisson, R. E. (2013). Competing for advantage. South-Western Cengage Learning.
In his key note speech, Prof. Michael Porter notes that in business competition there is ‘no best’, and to think that way would be rather dangerous; instead, an organization should look at what needs it is trying to meet, and managers should create a unique company that offers different things than the competitor and with that build success as well as societal value (Porter, 2012). How can a CEO or manager accomplish that?A company’s analysis of its external environment and understanding of its internal environment together will form a strategic direction (Hoskisson, et al, 2013). Although an organization cannot control the segments and elements of the general environment (like Demographic, Economic, Technological Segment, to name a few), it can analyze its external environment through scanning, monitoring, forecasting, and assessing to find opportunities to create growth and value (Hoskisson, et al, 2013). The focus is to create products or services that are different from the competitor, meeting customer needs and setting oneself apart from the field. Industry environment plays an important role in that quest, but also the ability to analyze potential competitors, and, ” … performance improves when the firm integrates the insights provided by all three analyses” (Hoskisson, et al, 2013, p. 74). If I am a newcomer, I have to build my brand and a following for my product or service, against roadblocks from established industry competitors and customer loyalty to other brands. If I am seasoned in the industry, I have to come up with new products that set me apart by meeting a customer need or a want that my competitor cannot satisfy.But what is it that I offer and what resources and capabilities does my organization have to produce the product, or to perform the service versus my competitor? These resources and capabilities provide the foundation of the company, and determine the strategic direction, as well as they serve as a stable basis in the process of gaining a competitive advantage over the competitor (Grant, 1991). Resources can also include employees with special skills. For example, my agency has an established client base in the homecare sector, but we also have a couple of our aides that have their state license as beauticians which allows them to cut our senior clients’ hair while taking care of them. Many of these folks have a harder time getting out, and enjoy this special service offer. This is an opportunity for growth for us with resources we have. “The resources and capabilities of a firm are the central considerations in formulating its strategy: they are the primary constants upon which a firm can establish its identity and frame its strategy, and they are the primary sources of the firm’s profitability” (Grant, 1991, p. 133). As Hoskisson mentioned, resources can be capital equipment, finances, materials, or skilled employees (Hoskisson, et al, 2013).
References:Grant, R. (1991). The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation. California Management Review. Hoskisson, R., Hitt, M., Ireland, R.D. & Harrison, J. (2013). Competing for Advantage (3rd ed.). South-Western Cengage Learning: Mason, OH.Porter, M. (2012). You Need Strategy for Your Organization. YouTube. www.youtube.com. Retrieved March 27, 2024, from https://www.youtube.com/watch?v=DViVtgD0xwE
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