The paper "Competitive Strategy, Reinventing Business Model " is a perfect example of a management assignment. The strategy is the processing of creating a unique and valuable position involving a set of activities. The sources of the strategic position are; serving different customers with new needs, serving few customers but with broad needs and serving many customers with broad needs but in a narrow market. Since some competitions are incompatible, the strategy involves making trade-offs in a competing market. Additionally, the strategy requires a company to create “ fit” in its activities. Fit it the way company’ s activities interact and support each other.
Fit ensure competitiveness and sustainability. Furthermore, the strategy requires an effective leader since leadership and strategy are linked inextricably. The strategy creates unique activities. The competitive strategy involves doing things differently from the rest of the competitors. It involves deliberately choosing different methods of conducting activities to deliver unique values. When companies achieve the strategy of doing things differently and create unique products or services, they perceive a new position in the market thus attracting customers. New position created by the strategy creates new customers, new demand, new distribution channel, new information system and new purchase occasions arise.
The strategy does not only ensure unique deliveries but also ensure that a company is competitive in any market. Competitive strategy is a method of creating new ideas, products, and services. In turn, this creates new customers, demands, market environment and different distribution channels. Therefore companies that use the competitive strategy over time are assured high growth and significant profit over a sustainable period. Competitive strategy is hence a financial strategy to ensure profitability.
A balanced scorecard can be applied to the model: the objective is creating new market space so as to create demands thus make profits. The matrices are set to measure the profits produced and demand created by the strategy. The strategy may be significant for only those companies that are not rigid and those that encourage innovation. Coming up with the idea that will create new products, ideas, and services space will require a lot of creativity and flexible management. Furthermore, research indicates that the competitive strategy only enjoys the market for only 15 years.
At the beginning of the strategy, things work as planned but as times goes by there are be pressure from an increase in customers demand, the entrance of other competitors after realizing the new market as well as changes in operation strategies in the company. The business will sometimes be forced to alter its operations which may affect customers negatively pushing them away. Q2. Reinventing business model The innovation of business models have reshaped industries and have enabled companies to generate millions of dollars as well as the addition of values in companies.
Despite the fruits of business model innovations, very few senior managers or companies do not take the advantage that comes with the innovation. The reason for this is because the managers or companies know very little about the dynamics and processes of business model development. Secondly, it is only a few businesses that understand their existing business model. An innovative business model should have customer value proposition (CVP), have a profit formula, have key resources and key processes.