Strategy Formulation: Organizations that Would Benefit
Discuss about the Strategy Formulation and the Organizations that Would Benefit from the Idea.
Answer:
Introduction:
The world of business comprises multiple organizations that are given the responsibilities of executing their strategy. However, most organizations lack an understanding of what are strategies. Most of the strategies statements by these groups are the organizational goals, objectives, tactics and even descriptions of the organizational task. (Grant & Jordan, 2015) Strategies are often confused with goals. However, strategies could refer to the means by which to achieve the goals. A plan involves coordination of the various resources in the right place all to work towards achieving the set goal. The most organizations are in the process of formulating the policies. A good strategy for any organization is one that analyzes the business environment which the company is developed (Geneva, 2015). Once the
situation is examined there is the recognition of a gap in the firm line that would lead to the development of some uniqueness from the competitors. The business resources are then analyzed and used to measure the capability of the company to sustain the new business strategy. The policy should be aimed at producing a continued uniqueness throughout the lifetime of the firm. Therefore, it should be sustainable within the available resources. This means in the strategy development there has to be a plan that will ensure that the business will be able to maintain the uniqueness in the years to come. For a strategy to be termed as sound, the role of time is very crucial. The correct timing is required to ensure that the strategy is working in the best way possible. Wrong timing would be fatal to the whole idea. Strategies can take different forms depending on how they are formulated and the stage at which they are formed. Others are established during the time of operation; others forecast events to be done in the future while others are realized during the brainstorming of ideas (Slack &Lewis, 2015).
The organization that would benefit from this idea of strategy formulation is those organizations dealing with the massive production of goods (Ghemawat & Siegel, 2014). This could include an organization like the General Motors which is involved in the mass production of cars. The information about the formulation of a long-term strategy would be of benefit. Taking the case study of IKEA, the General Motors Company can borrow the strategy and employ it in their organization, and this will help in reducing the shipping cost of the products. The development of a sound strategy by this company would mean that the organization will be able to save much of its costs, and this will be reflected in the profits. A business strategy should also be guarded against the competitors. Therefore, a sound strategy will help the organization to be placed in a better position in the phase of the competition. The strategy should be difficult to imitate and should be kept along with the major trade secrets of the organization (Tracy, 2015). The plan is developed internally and should remain internal to the business. This will help General Motors company to have protection over their products and prevent the loss or leakage of this information to other organizations.
CAGE Framework
CAGE framework of evaluation of international trade defines the business relationship between two countries that have similarity in the cultural, political, geographical and economic differences. (STOBER, 2014) In this framework, the distance is seen to be the primary factor influencing the trade between nations. This distance is measured in the four different perspectives and is used to define the interactions. The interactions are said to be influenced along the four top factors serving as necessary things to consider in trade. For instance, when two nations share a common border they are likely to purchase more, unlike countries that are located far away. When there are two countries with the same economic power such that the level of development is almost equal, then the standard of interaction in financial terms will be high. There is also a significant cultural interaction between the trading countries. There are some cultures consider other factors to be immoral or unethical. This will result in minimized interaction with those countries that are involved with the product. Political or administrative influence plays a significant role in international trade. Therefore, if there are understandings between the two nations that are trading then the business will be enhanced. This is opposed to the countries that are located in the same border and lack administrative stability (MilolozÌŒa, 2015). Traders tend to shy away from areas that are not stable due to the fear of the risk involved in the trade that could lead to significant losses.
An organization that would benefit from the CAGE framework is the multinational corporations such as Holiday Inn; long chain hotels. It is because they conduct their business across the borders and therefore having an understanding of this framework will help in choosing the destinations in which to establish their branches. There is a need to understand the culture of the people for instance for them to accept the trade to be conducted in their region (Thomas Hutzschenreuter Affiliation: WHU - Otto Beisheim School of Management & Ingo Kleindienst Affiliation: Aarhus University, 2016). Introducing something foreign in a foreign destination will result in rejection of the business and lead to reduced performance. There is also need to understand the administrative requirements of the destination before establishing the new branch, and this will serve best to meet the trade regulations. The other important aspect to be put into consideration is the need to understand the location of the business. If the other nation is located far away, geographically there will be cost implications that will result from the distance factor, and therefore this will discourage the trade with that country. The cost implications are also dependent on the level of economic development, and therefore the trading interaction between two nations with the same economic development level will be more attractive to the traders than it would be in the case of differences in economic development (Geneva, 2015). This framework would work best for the long chains of hotels since they are expanding each day to new nations. There is need to know the levels of interaction between the two countries.
References
Ghemawat, P., & Siegel, J. I. (2011). Cases about redefining global strategy. Boston, Mass: Harvard Business Pub.
Grant, R. M., & Jordan, J. (2015). Foundations of strategy (2nd ed.). Chichester, West Sussex, United Kingdom: Wiley.
MilolozÌŒa, H. (2015). Differences between Croatia and EU Candidate Countries: the CAGE Distance Framework. Society for promotion of business information technology.
Slack, N., & Lewis, M. (2015). Operations strategy (3rd ed.). Harlow, England ; New York : Pearson,.
Stober, E. O. (2011). CAGE Analysis of China’s Trade Globalization. European Journal of Interdisciplinary Studies , v6 (n1), 39-54.
strategy, R. L. (2015). Robert Ludlum's the Geneva strategy (First edition ed.). New York : Grand Central Publishing.
Thomas Hutzschenreuter Affiliation: WHU - Otto Beisheim School of Management, B. 2., & Ingo Kleindienst Affiliation: Aarhus University, D. o. (2016). The Concept of Distance in International Business Research: A Review and Research Agenda. International Journal of Management Reviews , v18 (n2), 160-179.
Tracy, B. (2015). Business strategy. New York : American Management Association.
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