M4311 Strategic Management

ASSIGNMENT 2
POON WAI SHING AESON
 I. Introduction

As we all know, a well-organized strategy is the key for the organization to be successful. Because it can identify
the organizational resources, influences its pattern of investments by defined vision and mission as well as strengthen
the ability for withstanding the environmental changes. (Grant, R., Butler, B., Orr, S., & Murray, P. (2014)) In fact,
there is no impeccable strategy which can be applied in all situation, since the market is dynamic rather than static.
Therefore, strategy is important for the company to success. This reflection will be divided into 3 sections including the
importance of strategy, the impacts of globalization to strategy decision making, each part will illustrate with some
examples. Lastly, the recommendations and prospects will be drawn in conclusion.

II. The importance of strategy

The strategy is an element that has an ability to determine how far the company can go. It is considered as a
long-term planning process which aims to achieve one or more objectives under conditions of uncertainty. In fact, the
leader of the organization is the person who formulate the strategy, so the quality of strategy depends on ability of the
leader. According to Roger (2007), the successful leader has an ability to think critically and holding at least two
conflicting ideas or options in mind at the same time. They try to examine all the possible factors which tends to influence
the outcome and consider the problem as whole instead of breaking down into small pieces. A strategy can help to define
the basic long-term goal and objectives of the enterprise and design a course of action as well as allocating the resources
for accomplishing the desired goals. Therefore, it has an ability to force the organization raise and fall.

Taking Uber as an example, ride-sharing is now being a popular trend around the world. Uber expanded their
business in China because it has the highest population density among the countries for them to wider the base of
customers with less competitors. (Lopez, L. (2016, August 02)) In accordance with the past experience, ride-sharing
was working smoothly in densely populated cities. Although China has a large population, the car ownership of the
residence is the major problem, with only 130 vehicles per thousand people which leads to insufficient supply of drivers.
Plus, the infrastructure, financial markets, banking system and legal system are still underdeveloped when compare to
the Europe, so it is difficult to duplicate the practice directly from the home country to the host country. For the local
ride-sharing company Didi Driving, they are highly familiar with the environment in China. Eventually, they drop out
from the Chinese market. (Salomon, R. (2016, August 08)) In my point of view, Uber should not adopt standardization
strategy for entering China ride-sharing market, but try to corporate with the local business by using localization
approach or merging with the local company so as to take an advantage of relationship and expand the business easily.

III. Globalization impacts strategic decision making

The strategic decision making is affected by different factors including economy, cultural, political, technology
and human resources. Globalization makes the events interconnected with the worlds economic activities, so the
uncertainty of the business environment become extremely high. Therefore, leader have to embrace the complexity and
be open-minded in order to react quickly to the rapid changing environment. (Embracing Complexity. (2011))

One of the example is IKEA who is the world's largest furniture retail chain and has more than 300 stores
globally. They had faced cultural problem when it entered to the United States. Because they initially tried to duplicate
its existing business model and products into the host country. (Chu, V., Girdhar, A., & Sood, R. (2013, July 21))
Unfortunately, revenue remained steady as the product cannot satisfy the customer needs perfectly. In my point of view,
they should identify the strategic challenges and develop a strategy attempts to overcome them which corresponds to
specific needs of customer. In fact, the challenges that new investors entered China market, however, were far different
in US and leader should embracing these uncertainty in order to discover the right answer. In general, strategy and
business model cannot be replicated when the company want to enter the mature market. Therefore, they should slight
modify them which helps to minimise the differences between home and host country. Although there are many factors
that affecting the decision making, cultural differences are the common problem that overlooked and encountered by
the foreign investors.
IV. Sustainable competitive advantage with VIRO

Competitive advantage is the critical part for the organization acquire more market shares. It defined as the products,
service, behaviour of the organization is better than other competitors within the market. But most of the competitive
advantages are not totally sustainable like game set of Play-Station which can be replaced by others instantly. If the
company possesses the sustainable competitive advantage that rivals are hard to imitate, that company can attains a large
portion of market shares.

For instance, Apple Inc. who focuses on producing hardware, software and mobile company. It is the only company
that using their self-developed operating system and it creates the uniqueness. Besides, they not only stresses on selling
products, but also holding different software workshops like code creation and photoshop workshop for customers. This
action helps them to differentiate their products from its competitors like Samsung. In addition, since the operating
system is convenient to link up all the apple products like iTunes, Apple music, it gives a high switching cost for the
users change to other brands. Until now, there are no competitors possess their own system which makes Apple to enjoy
this benefit. According to Painter (2017), Apple is now working on the project of electric car and expect to launch the
car on 2020. It is an evidence that they exploit the resources to strengthen their competencies. In order to growth
gradually, making activities more distinctive and offering features or services that competitors would find impossible
or expensive to copy is the only way to success in long term basis. (Porter, M. E. (1996))

V. Conclusion

In conclude, strategy is a vital element for the company to be successful, even a multinational company will make a
wrong strategic decision. By eliminate the failure, we should explore ourselves, try to understand the differences
between countries as well as cultivate an integrative thinking skill. It helps us to generate innovative or creative ideas
for developing a strategy to respond to the rivals action and changing environment.

Word Count: 1083

VI. References

Chu, V., Girdhar, A., & Sood, R. (2013, July 21). Crouching tiger tames the dragon. Retrieved September 28, 2017,
from http://www.businesstoday.in/magazine/lbs-case-study/how-ikea-adapted-its-strategies-to-expand-in-
china/story/196322.html

Embracing Complexity. (2011). Harvard Business Review, 89(9), 89-92. Retrieved September 20, 2017.

Grant, R., Butler, B., Orr, S., & Murray, P. (2014). Contemporary strategic management: An Australasian perspective
(2nd Ed). John Wiley & Sons.

Lopez, L. (2016, August 02). This is why Uber failed in China. Retrieved September 30, 2017, from
http://www.businessinsider.com/why-uber-failed-in-china-2016-8

Martin, R. (2007). How successful leaders think. Harvard Business Review, 85(6), 60-67.

Mintzberg, H., & Waters, J. A. (1985). Of strategies, deliberate and emergent. Strategic Management Journal, 6(3),
257-272.

Painter, L. (2017, September 12). ICar release date rumours, features and images. Retrieved September 28, 2017, from
http://www.macworld.co.uk/news/apple/icar-apple-car-release-date-rumours-news-caros-evidence-patents-
3425394/?p=2#toc-3425394-1\

Porter, M. E. (1996). What is strategy? Harvard Business Review, 74(6), 61-78.

Salomon, R. (2016, August 08). Why Uber Couldn't Crack China. Retrieved September 28, 2017, from
http://fortune.com/2016/08/07/uber-china-didi-chuxing/