Essay代写：Business strategy and strategic management－r51due

下面为大家整理一篇优秀的英国essay代写范文- Business strategy and strategic management，供大家参考学习，这篇论文讨论了企业战略与战略管理。商业战略管理，首要的事情是如何制定适当的战略，以发展强有力的竞争力和超越竞争对手。而在这之中，我们就需要一定的战略能力了。战略能力作为一个组织赖以生存和繁荣所需的资源和权限， 这对保证一个组织的可持续发展至关重要。

1 Definition of dynamic capabilities in strategic management

Strategic capability is defined as the resources and competences of an organization required for its survival and prosperity (Johnson & Scholes, 2008), which is of vital significance in guaranteeing the sustainable development of an organization. Among all the strategic capabilities Johnson and Scholes had discussed, dynamic capabilities appear to be the most adaptable and adjustable ones to achieve and sustain competitive advantage. And among the countless contemporary literature related, Teece and Pisano(1994) put forward the most acknowledged definition of dynamic capabilities, which is “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments."In particular, they explained the terms “dynamic” and “capabilities” separately, where the former one emphasizes the versatile attribute of external environment, while the latter one focuses on the role that strategic management plays in adapting to such environment.

1.1 The role of dynamic capabilities in strategy formulation

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Speaking of business strategic management, the first and foremost thing is about how to formulate appropriate strategies to develop distinctive competences and outperform competitors. When it comes to the role of dynamic capabilities in strategy formulation, it requires the organization to keep pace with the times and embrace renovation whenever is necessary, rather than satisfying with current competences or stopping at existing competitive advantages. The instructive significance of dynamic capacities in formulating strategies is evident, especially in this fast-changing modern commercial environment, where technology booms and innovations spring up. It is not exaggerating to say that there is no permanent winner because of a certain product or service, either the same strategy, and there is always imitation or substitution of them from competitors, that’s why pursuing and possessing the capabilities to be dynamic and progressive plays a crucial role in strategy formulation, and why dynamic capabilities are highly applicable in managing business strategies.

1.1.1 Classification of dynamic capabilities

After being aware of the importance of dynamic capacities, the next is to get a better understanding of the various forms of them. According to Johnson and Scholes (2008), dynamic capabilities can be both formal and informal. On the one hand, they are likely to take the form of strategic acquisitions and alliances, by which the new competences or skills are acquired formally. On the other hand, they could also be obtained in an informal way such as organizational knowledge, which is the capability gained through collective understandings evolved from systems, routines, and sharing activities across the organizations, from which the members of organizations are able to apply the accumulated experience in the process of carrying out their work (Tsoukas&Vladimirou, 2001).As for their respective roles in the strategy formulation, if the former one puts more emphasis on major strategic actions which involves in sophisticated planning and coordinating, the latter one is more inclined to be accompanying informal strategies such as social networking, building personal relationships and exchange of information.

1.1.2 Application of dynamic capabilities in strategy formulation

Whether mergers, acquisitions or strategic alliances, the essence of them comes down to cooperation and collaboration. In this regard, Allred et.al (2001)suggest collaboration as a typical dynamic capability from a resource-based view. The objective is to make the most use of existing resources across organization boundaries, both within companies and between different partners. Accordingly, it is the responsibility of decision makers to formulate collaborative strategies and obtain inimitable advantages. At the same time, they should always bear in mind to balance the interests of all parties, to be more specific, allocate shared resources, correct strategic directions, and mitigate strategic conflicts.

Moreover, product development is also an indispensable part of strategic planning, for it is what creates customer value and differentiates the organization from its competitors. However, no firm can stick to a single product or service forever; even it has built a credible brand image among the customers. The reason is as long as the product has been launched on the market; sooner or later there will be similar or even better substitutes from competitors, which makes upgrading original products and introducing new products an important strategy for enterprises to survive. To gain this kind of capability, being “dynamic” becomes a prerequisite. According to Teece(2007), it implies the ability to rearrange a firm’s resource base in response to a changing environment of competition. Indeed, if an organization is capable of formulating dynamic strategies to reconfigure and integrate competences in a highly competitive market, then somehow it has built its own dynamic capabilities that cannot be replicated by its rivals.

Furthermore, we should not neglect the function of dynamic capabilities in strategic decision making. To some extent, whether an organization can make the right choices depends on how much knowledge they have, especially in this information era. As noted by Reijsen et.al (2014), knowledge is regarded as the primary asset of an organization. In the case of strategy formulation, it can be treated as a source of dynamic capability considering knowledge is frequently updating. In the long term, the positive effect of knowledge is more evident, since constant learning enables one to keep pace with the latest information, which is the source of renewal and recreation. And only based on plenty of up-to-date knowledge, can an organization be less biased and sensible enough to make correct strategic decisions.

In practice, successful application of dynamic capabilities is represented by numerous cases. For example, Helfat (1997) considered R&D activities as a type of dynamic capability; she used the case of petroleum industry in the US and suggested that firms with greater technological knowledge still resorted to R&D in response to changing market conditions. The findings of Helfat is exactly in accordance with previous arguments of application in strategy formulation, in the way that R&D activity is actually a dynamic upgrade of know-how, hence the research results from it will contribute to dynamic capability in a certain degree.

1.2 The role of dynamic capabilities in gaining competitive advantage

Competitive advantage refers to the ability obtained from attributes and resources that allows an organization to outperform its competitors (Porter, 1985).By definition; it is obvious that gaining competitive advantage is in line with the resource-based perspective of dynamic capabilities. For one thing, both of them are concerned with allocating and integrating available resources reasonably in order to stand out from the competition. For another, building and sustaining irreplaceable superior characters of organizations is their common highlight. Despite the above similarities of the two business concepts, it does not necessarily mean we can equate dynamic capabilities with gaining competitive advantage. The following part will make some comparisons and contrasts of them, as well as figure out the relationships between them.

1.2.1 Comparison and contrast of dynamic capabilities and competitive advantage

Véronique and Bowman (2009) pointed out that in markets of fierce competition, competitive advantage is more temporary and can only last for a shorter period of time compared with dynamic capabilities. In this sense, competitive advantage is a static or transient status and cannot maintain its long-term effects without dynamic capabilities. In addition, they argued that the links between competitive advantage and dynamic capabilities are indirect, and only when dynamic capabilities are relevant to the market, can they produce positive effects on firm’s performance and competitive advantage.

As for the close connection between them, it is best manifested in their consistent emphasis on resource-based view. Barney's (1991) proposed that if resources have the so-called VRIN attributes, which are “valuable, rare, inimitable, non substitutable”, they can be served as a source of sustainable competitive advantage. Similarly, dynamic capabilities also define the essential characteristics of resources that create values for the organizations. However, competitive advantage is more inclined to describe and define what the constructive resources are like, while dynamic capabilities focus on the way how the resources are utilized. Put it simply, if competitive advantage is the objective that an organization wants to achieve, then dynamic capabilities are necessary means and processes to reach the goal given an unpredictable environment.

Regarding to the subtle relations of competitive advantage and dynamic capabilities, there are plenty of researchers engaged in analyzing and explaining this issue, perhaps the most thorough and concise summary is from Eisenhardt and Martin (2000).As they pointed out ,dynamic capabilities are necessary, but not sufficient, conditions for competitive advantage. The rationale is, an organization must establish and develop required dynamic capabilities in order to gain competitive advantage, but being equipped with dynamic capabilities does not guarantee the acquisition of competitive advantage.

1.2.2 Ways of developing dynamic capabilities to gain competitive advantages

Based on above analysis, the key point is to identify and cultivate the right dynamic capabilities that contribute to competitive advantage. There are of course a wide variety of paths to improve dynamic capabilities; the first and foremost thing is to build a clear framework on the basis of different markets. In this aspect, Hine et.al(2014) further deconstructed and reconstructed the dynamic capabilities both from internal and external dimensions. They raised a new idea of dynamic learning capabilities, which do not only pay attention to existing capabilities, but also attach importance to create new capabilities, in an attempt to boost the outputs and performance of organizations. In the capability framework Hine et.al designed, dynamic learning capabilities belong to higher hierarchy in external dimensions, which reveals the indispensable role of organizational learning, as well as the implication that organization should lay stress on creativity and innovation when pursuing competitive advantage.

As mentioned in the definition of dynamic capabilities, “dynamic” is more about environment than competences. Coincidentally, Hine et.al (2014) considered external environment as another critical determinant of competitiveness. What’s more, they divided the external environment into high-velocity, medium and low-velocity markets. In high-velocity markets, capabilities can be outdated quickly. For instance, in high-tech and fashion industry, once a firm has launched a new product or a new trend is emerging, there will be various imitation or substitution of them on the market before long, and sometimes even with better properties or additional functions. As a consequence, the unique competitive advantage that belongs to a single firm will gradually become a common feature across the whole industry; hence an organization should take advantage of up-to-date knowledge and create new opportunities as fast as possible to win the competition.

Another effective technique of developing dynamic capabilities is collaboration between organizations, which have a variety of categories. There are mergers, acquisitions, joint ventures, strategic alliances and so on. The corresponding motives can be increasing product outputs, sales volume or market power, as well as enhancing technological know-how or other competences. With no doubt, the realization of these incentives is more or less helpful for maximizing competitive potential. In another sense, compared with passively accommodating the organization to the competitive environment, seeking for collaboration is a more proactive way to explore and exploit external resources.

In specific, mergers and acquisitions are transactions in which the ownership of enterprises, business organizations or operating units are transferred or combined. As a part of strategic management, mergers and acquisitions enable companies to expand, alter the character of their operations or improve their competitive advantage (Dutta & Kumar, 2009). And according to Joint Venture Agreement (2003), a joint ventures is a business agreement by which the parties agree to develop a new business entity for a specified time, it is characterized by shared assets, ownership, governance, returns and risks. Strategic alliances occur when two or more organizations cooperate together to pursue mutual benefits while remaining to be independent parties (Chan & Heide, 1993).From the definitions, it can be seen that the above collaborative approaches are dynamic processes as well, and if being implemented properly, they shall inject vitality into organizations and endow them with differential capabilities, which are vital for gaining competitive advantage.

1.3 Summary

To sum up, providing an organization is able to cope with the challenges in a changeful environment, is capable of allocating and integrating internal and external resources reasonably, is willing to join hands and learn from strategic partners, dynamic capabilities surely play a contributive role in formulating strategies and gaining competitive advantages.

2 An overview of blue ocean strategy

Market competition is not new in the field of business, and it has penetrated into almost every sector of the whole industry. The traditional and authoritative concepts believe that to survive and develop in the marketplace, a company must outperform its rivals and win the majority of market shares, especially in the case of perfect competition where there are a large number of similar producers. Under this circumstances, fierce and bloody competition is likely to take place and this is the so-called “red ocean” (Kim &Mauborgn, 2005).

On the contrary, Kim and Mauborgn pointed out that companies can achieve success without defeating competitors, but rather by creating ″blue oceans″ of uncontested market space that makes the competition irrelevant. Based on the research of 150 strategic moves across 30 industries and over more than a hundred years, they claimed that formulating and executing blue ocean strategy give rise to an increase in value for the company, its buyers, and employees. They also presented analytical tools and frameworks that are imperative to systematically create and capture blue oceans, in a way that is instrumental for companies to maximize opportunities and minimize risks.

2.1 Application of blue ocean strategy

From the overview of blue ocean strategy, it can be seen that the ultimate goal of it is to create unique advantages which are powerful enough to eliminate competition. However, before a company is capable of reaching such a level, it ought to go through a tough process from a competitive environment. Kim and Mauborgn (2005) has provided companies with the innovative strategic concepts of pursuing differentiation and avoiding fierce competition, along with detailed analysis of approaches to formulate and execute blue ocean strategy step by step.

They put forward four guiding formulation principles about how to shift away from conventional competitive strategic thinking to the blue ocean strategic thinking, which are reconstructing market boundaries, focusing on the big pictures instead of numbers, reaching beyond existing demand and getting the strategic sequence right respectively. They also proposed two additional execution principles to put theories into practice, which are overcoming key organizational hurdles and building execution into strategy. In addition, the researchers provided a great deal of solid examples and successful stories to prove the feasibility and effectiveness of blue ocean strategies, such as growing customer demand and raising profits for a specific company or an industry

Parvinenet.al(2011) have conducted empirical research, and their findings suggest enforcing blue ocean strategy as regards to sales management practices generally improve the sales performance of companies. Moreover, they indicated blue ocean strategy at least contributes to business model thinking in five perspectives: market space redefinition; managerial cognition; technological revolution; radical recreation; process and evolution.

Of course, the application of blue ocean strategy does not limit to sales industry and general management. In fact, it saw the most widespread usage in cutting-edge field such as high-tech industry and medical science. For instance, Slocum and Papa (2014) investigated into the osteopathic medicine domain and applied blue ocean strategy to the promotion of healthcare education. They concluded by adopting modern learning techniques and medical education technologies, osteopathic profession has the potential to be the prominent leader in reforming global health care training, or put it in another way, the opportunity to enter into the “blue ocean”.

Besides commercial field, blue ocean strategy can be implemented in economic policy as well. Lindič et.al (2012) innovatively examined blue ocean strategy from an entrepreneurial perspective; they recommended that to achieve long-term economic growth, the policy makers should step out from specific industries or certain business activities, and take into account cooperation between companies of different sizes, encourage value innovation and creation of uncontested markets, which are in line with the fundamental ideas of blue ocean strategy.

2.2 Strengths and limitations of blue ocean strategy

To be specific, blue ocean is an ideal state while blue ocean strategy is about how to reach and maintain this state. Dynamically, the realization of blue ocean can be divided into two stages. First is breaking out of the bloody competition in red ocean and find access to blue ocean, second is maintain the differential features that no one else can enter into the blue ocean. From my point of view, the strengths of this strategic management tool mainly lie in the first stage, and the limitations concentrate in the second stage.

As for strengths, instead of passively adapting the company itself to the external business environment from traditional structuralist view, Kim and Mauborgn(2015) held the reconstructionist view that market boundaries and industry structure can be actively reshaped by the activities and conscientious efforts of industrial players. In other words, they put more emphasis on endogenous growth as the driven factor for the development of a firm, rather than being determined by exogenous elements. To an extent, this advanced view has shifted the attention of companies from defeating rivalries to improving their own advantages and performance, it has more or less inspired companies and gave them confidence to break through the restrictions of external environment.

Furthermore, Dehkordi et.al (2012) took a brief comparison of competitive strategy and blue ocean strategy, they figured out better performance resulting from competitive advantage is visible to all the imitators, while a good blue ocean strategy is a dynamic progress, hence more difficult to imitate.

They assumed global market is comprised of red ocean and blue ocean. In the former situation, all the resources are limited and boundaries are defined, that means when one firm has occupied a large part of the market, customer base, suppliers or raw materials, then the above-mentioned elements that other firms can obtain would shrink correspondingly. In contrast, blue ocean is a brand new industry or field with untapped resources and undefined limitations, where a company is able to gain considerable profit without worrying out existing competitors, but it does not mean potential competition is not a problem, and this is the time when limitations of blue ocean strategy should be disucussed.

Indeed, a company can build its own blue ocean by conducting correct strategic moves and making sufficient efforts, and no one can deny that blue ocean strategy has provided various helpful methods in this aspect. However, when the market becomes lucrative enough, no one can stop others from chasing interests by imitation. Admittedly, other companies can explore new market as well, but actually it’s not as cost-effective as exploiting existing market, since developing new products costs both time and capital, and setting foot in the unknown area is risky

Taking the intangible assets as an example, why patents and copyright are so expensive and important, especially for companies specialised in technology and creative industry? The reason is they have spent a great deal of human, physical and financial resources on them. In turn, these assets can or have the potential to bring substantial returns for companies who own them. At the same time, patents and copyright protect the company from being imitated by competitors. In this sense, they can be regarded as a type of or components of blue ocean.

Then here comes the question, why should companies cost a lot to set these barriers if pursuing blue ocean is a suitable strategy for all the companies? The idea behind this fact is, on the one hand, for most companies, especially small and medium enterprises that trade daily necessities, it is not worthwhile and they cannot afford to develop their own blue ocean, such as conducting costly R&D activities. Instead, following the trend and improving available products on the market is the wisest strategy. On the other hand, though I acknowledge the role of value innovation as the cornerstone of blue ocean strategy, in most industries, there is not a lot space for creativity and innovation, such as traditional agricultural and manufacturing industry, where blue ocean strategy has little guiding significance.

More importantly, one of the most crucial features of an effective strategy is to provide an instructive framework for managers to design customized strategy for their companies.(Jarzabkowski& Wilson, 2006).However, the major analytical tool in blue ocean strategy developed by Kim and Mauborgne (2005), known as the strategy canvas, seems to go beyond this principle. As noted by Alex et.al (2011), by plotting a variety of factors that influence competition in the industry in a graphic form, the strategy canvas depicted the strategic profile of a company against that of competitors. Nevertheless, the range of factors presented in the strategy canvas that the industry competes on and invests in can vary from manager to manager, so they largely depend on managers’ observations and intuitions rather than on objective information and analytical data.

2.3 Recommendations for improvement.

Therefore, the prerequisite of formulating blue ocean strategy is confirming its worthiness, and before executing the strategy, it is necessary to figure out whether it is implementable. To tackle the above issue, the study of Parvinen et.al (2011) informed a practical implication that the choices of blue ocean strategy approaches and enforcement of them should be context-specific. They pointed out blue ocean strategy literature by Kim and Mauborgne mainly follows a descriptive method, which means somehow they tell the successful stories and interpret them from their own perspective, while ignoring the others who fail and do not manage to survive. The empirical results obtained by Parvinen et.al (2011) further suggested different approaches of blue ocean strategy should be adopted in different contexts and context combinations. Though they did not give detailed explanation, I extend the topic based on the theory of market structures under the guidance of their research.

Generally speaking, market structure is the number of companies which produce homogenous products, and there are six categories of market structures: monopolistic competition, oligopoly, monopsony, oligopsony, monopoly, and perfect competition (Schwartz, 2010). Since oligopoly and monopsony are defined from the angle of buyers, this paper mainly discusses the other four cases for the sake of sellers. In the case of monopoly, there is only one provider of a product or service. Needless to say, the company who possesses the power of monopoly does not need to care about competition; it has already occupied the whole market and the “blue ocean” exclusively.

As for oligopoly, there are a small number of companies that dominate the majority of the market share. In this case, to maintain higher prices and profit margin, oligopolistic firms often choose the form of alliances to minimize the degree of competition. Due to the limited number of them, oligopolist is likely to be aware of the actions of the others (Stigler, 2010).Hence, consideration of other market participants and cooperation based on mutual benefits should be prior to creation of value innovation on one’s own.

When it comes to monopolistic competition, there are a large number of buyers and sellers in the market, and no company has full control over the market price. In my opinion, this is the most suitable situation to implement blue ocean strategy. For one thing, there are no perfect substitutes, which allow the room for creativity and innovation. For another, there are barriers to entry, which means after companies have launched differentiated product or service, they can protect their “blue ocean” from easily invaded by competitors.

With regard to perfect competition, there are unlimited number of producers and consumers, which is analogous to the so-called “red ocean”. Since one premise of this market is no barriers to entry and exit, companies are unlikely to avoid competition and build blue ocean under this structure, unless they transform their business completely and enter into another structure.

To sum up, in this interconnected business world and under the context of accelerating globalization, no firm can survive and prosper in isolation. In most cases, where there is connection, there is competition. Therefore, when executing and formulating blue ocean strategies, managers should take market structures and industrial natures into account, and choose appropriate strategies according to different contexts.

Reference

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