Why Does Strategy Matter
Summary
The strategy is fundamental to the sustainability and success of an organization. A commercial strategy is a detailed plan designed to achieve success. The corporate tactics should be executed by executives, with managers taking a series of pre-determined actions to attain specific goals, which are part of the company’s mission and vision (Peng 2017; Yuliansyah, Gurd & Mohamed 2017). Constantinos Markides states, “Building a successful strategy requires continuous assessment of the strategy, investigating and then repetitively renewing the rational process by probing the outcomes. No matter how good today’s strategy is, one must always keep reinventing it” (Leonidou et al. 2017, p. 585). It is necessary to analyze strategy from a theoretical perspective and relate the hypothesis to practical use. Thus, each corporate entity must align its goals to its blueprint and undertake its operations based on the pre-determined plan of action.
Synthesis
The role of strategy can be expansive from decision support, coordinating device, target to animation, and orientation. The strategy used either corporate or business needs to address how the organization positions itself within a sector or industry (Johnson 2016; Chen Eshleman & Soileau 2017). Blackberry is an instance of a company that failed in its business strategy (Howitt 2019; Vynakov, Savolova & Skrynnyk 2016). The failure can be explained as the lack of understanding of how to please the customers and not necessarily the business-to-business strategy (Manika Papagiannidis & Bourlakis 2017). Blackberry focused on producing company-worthy technology based on security and improved efficiency against its competitors. However, the plan failed when users that are employees failed to see the merit in purchasing the mobile phone. Eventually, users transitioned to iPhones and Android phones (Moussi & van Amsterdam 2017; Huang 2019). The central emphasis of the business was to improve company profits rather than the value of its products, especially emphasize business to customer model (Muthukumar, Ramakrishnan & Krishnamacharyulu 2017). Corporations must analyze the market and trends to identify the best type of strategy or tactical approach that will optimize current business positioning for future success.
Analysis
Porter’s Five Forces of Competition framework will be implemented to identify the reason for the failure or success of a business. The approach ascertains and examines the competitive forces that shape an industry (Dälken 2014; Dobbs 2014). The first concept in Porter’s five forces theory is a competitive rivalry. Blackberry operates in a highly competitive environment (Naor, Druehl & Bernardes 2018). The mobile phone industry has limited companies operating in it. However, the competitive aspect originates from the innovation and promotion of their products (Pringle & Huisman 2011). For instance, the switching costs of buying mobile phones from one company to another presents low switching costs for the customers (Singh et al. 2017). Alongside this, the competitors are aggressive in their innovative technology and promotion in marketing. The high-priority strategic management undertaken by competitors and low-strategy implemented by Blackberry may explain why the innovative feature in the mobile phone did not suit the target market. Concurrently, it presents the threat of new entrants into the market.
The threat of novel entrants into the market was the strong force that led to the collapse of Blackberry’s business strategy. The product differentiation in the market allowed competitors to provide newer operating features and components in their mobile phones compared to Blackberry. The aspect of differentiated products made customers shift to more modern versions of competing companies. With respect to the negotiating power of suppliers, the force is weak. The reason for the low supplier purchasing power is based on the fact that purveyors have restricted control over prices, which makes their trading power weak. Further, Blackberry products are fairly standardized, less distinguished, and have low switching costs. Hence, the suppliers of mobile phones have no credible threat against the competitors, thus making the company’s strategy weak. As a result, the trading power of the customers is based on the prices provided, given that there are limited competitors in the market. Thus, reliance on customers to set up costs and preferences of the Blackberry products may explain why the business’ strategy failed.
The consequential effect is the development of the implications of the theoretical analysis. From an industry analysis, the perceptual mapping expounds on the implications for Blackberry’s failure to improve shares in the market (Johnson 2014). As a result of the business strategy that Blackberry employed, the corporation’s productivity reduced significantly. Consequently, the valuation of the entire company was affected negatively, with the performance of its competitors improving significantly. Overall, the 5 Porter’s Forces of Competition theory explains all the situations of Blackberry’s lack of proper strategy to improve sales with a focus on the business-to-customer model.
Figure 1: Perceptual Mapping of Mobile Phone Industry Analysis
Authority
The 5 Porter’s Theory of competition sufficiently addresses the business problem identified under the company, Blackberry. The theory explains each factor, including the bargaining power of suppliers and customers, the entry of new competitors, and competitive rivalry (Dedrick, Kraemer & Linden 2011). Therefore, no gap can be identified that the theory has not described (Porter 2008; Sutherland 2014). However, in my perspective, Blackberry’s plan did not set provisions for the needs of the customers who were the actual users of the products and not the company. In conclusion, Blackberry’s strategy was doomed from the beginning.
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