Competitive Strategy - Review of e-Learning materials - Assessment Answers

What is Strategy?

Strategy is one of the most important aspects of a company. In order to develop a strategy a company needs to focus on four main areas. These consist of the area in which the company wants to compete. Here the idea is basically the company may want to compete in particular geographical area, in a particular industry or any other area as defined by the company. The second is that the value addition that the company brings to its customers in a unique manner. This basically stands for advantage that the company has with respect to other companies sin the market. The third is the resources and the capabilities that the company has which it can employ to bring the product or the service to the market. The last aspect of strategy formulation is the way the company is going to sustain its practices hence maintain its position. It is important to sustain the unique value that the company has over a period of time else there is no use of the value derived from the product or the service provided by the company (Teece, 2010).

Once a company is clear about these four aspects, it can articulate its strategy for the company. Strategy is like a road may which gives the company direction that helps them to fulfil their objective. It allows the various elements of an organization to come together and work in harmony with each other such that the company gains competitive advantage in the market (Chaffey, 2007).

A good and sound strategy can be beneficial for all companies. When it comes to Apple it can be seen that their sound strategy has made them a market leader in their industry. The company evaluates its markets, resources, capabilities and value proposition on the basis of which it lays its strategy. The company intensive strategy for growth in order to beat its rival like Samsung, LG, etc is mainly based on the company innovation and product design. The company’s strategy concentrates on differentiation of the product from the rest due to which their products stand out in the market. This means that Apple strives to be different from its competition not only when it comes to the price point but also when it comes to the features offered by the company in terms of its products. (Zott & Amit, 2008)

Thee differentiation strategy also means that in order to sustain it the company has to continuously innovate and bring different features to its products in a continuous manner. The competitors of the company eventually catch up with Apple products but due to its strategy the company usually is the first to innovate due to which it always keeps itself ahead of its competition. Also the company constantly looks at expanding its markets since it does not concentrate on any one particular geographical market. Such type of expansion is only achieved through an intensive growths strategy where the company employees its capabilities and resources to reach larger consumer base (Baye & Beil, 2006).

CAGE framework to evaluate international trade opportunities

Due to the advent of globalization international trade has been facilitated between countries to an enormous level however it is important to understand the type of trade that should be undertaken with a given country due to the differences between them. The choice of going international with respect to a particular country can have a deep impact on the business and the CAGE framework helps in the analysis based on a number of dimensions.

CAGE is a framework for the evaluation of international trade opportunities that are available to a company and it stands for the cultural, administrative or political, geographic and economic dimensions of a company. It should be taken into consideration when international strategies are being formulates since it helps in pinpointing the differences that countries have which might make the multinational companies handicapped when it comes to local competition. The framework also helps country to analyse their position with respect to another country. For example it allows a country like Vietnam to explain its strengths in the Asian markets (Ghemawat, 2013).. The framework also helps in analysing the different types of distance that exist between countries and the impact that it has with respect to the industry that the company is operating in. For example when countries are geographically far and the industry consists of bulky goods than the cost of transportation becomes higher. When it comes to the cultural difference, it affects the preferences of consumers hence countries who are culturally different should take into account the preferences of the domestic market should be taken into consideration by the multinational company (Gilbert, Rasche & Waddock, 2011).

The CAGE framework should be applied by any organization who intends on doing business abroad. An organization which can benefit from the application of CAGE is Starbucks which failed to manage more than a handful stores in Australia. If the company would have done their research on the basis of the CAGE framework it would have realized that there was huge cultural difference when it came to customer preferences in coffee. Australia already had a well-established coffee culture much before Starbucks arrived and the local population was already accustomed to having a series of different types of coffee which was customized exactly to their preference. The company achieved success in other developed countries since the coffee culture was not very established in these countries especially China where the company achieved great success since it nails the consumer preference in the country and introduced them to a good international coffee chain. Starbucks is a perfect example for a company that should apply the CAGE framework which will allow them to analyse domestic culture of Australia which is a nation that already has over 10000 cafes in the country (Nicita, 2013).