E-Learning Activities Answers | Assignmenthippo Assessment Answer

What is Strategy?

In today’s world the word strategy has lost its definition as it is used to define tactics and objectives of companies rather than what the word actually stands for. A well-defined strategy tells us what a company does and what it does not do, by clearly outlining the target market of the company, what they would like to deliver to this market, how they would deliver it and how they would sustain in the market (Rothaermel, 2015). Hence, strategy is a high-level plan that is used to achieve clear goals (Grant, 2015). It is extremely common to see that the intended strategy of a company would completely look different when actually implemented as strategy is emergent. It is therefore key to understand that business needs to adopt to the changing market and vary their strategy rather than being rigid. When defining a strategy it is important to first analyze the company and understand if the resources, technology and finance required for the implementation of the strategy is available (Gobble, 2012). A strategy without resources cannot be implemented. It is also important to understand that certain things have to be given up to achieve required goals (Madsen, 2016). Apple Inc., which is the leading company in high-end mobile phones have understood that they cannot compete with Windows in the PC market, as the target market requires economic products. Thereby instead of trying to increase their market share in the PC market, they are only making sure the product sustains while finding ways to increase their share in mobile markets.

The Eastman Kodak Company, was a pioneer in imaging products. The company did extremely well in the photography industry, producing cameras, lenses and photographic film. Even today, a moment worth capturing is known as a “Kodak Moment”. However, with the advent of digitization and quick migration towards digital cameras the company lost a significant share in the market. The company today is restricted to imaging products and videography equipment for the filming industry. To increase their revenue Kodak can implement a new strategy that is to develop economic high-resolution camera lens for smartphones. Their target market would be the medium-budget camera phones, which require good quality camera lens for a cheap price. The company already has experience in the same and the technology can be easily scaled. Given the brand name, the company would be able to sustain in the market. The timing to implement this strategy is now, as the sales of smartphones is increasing day after day and customers are inclined to choose phones that have excelled front and rear cameras. Kodak can ideate the concept from their prior experience in photography and integrate into the current smartphone market to generate revenue.

Cage Framework

With the emergence of globalization, international trade has become a common strategy of every company to increase its customer database, brand name and revenue. International trade is also encouraged due to the availability of low cost labor and raw materials like in case of China and India, better infrastructure and manufacturing facilities like in case of the US and Japan.. It takes a lot of analysis to understand which overseas nation would be able to provide a good base to work with. The first step for this analysis could be the CAGE framework, which stands for Culture, Administrative/Politics, Geography and Economy. Lower the CAGE distance between two countries, easier the trade between them (Ghemawat, 2013). This is one of the major reasons why most of the companies of Australia have trade affairs with New Zealand and Singapore. The similarities would increase the trade chances exponentially as the source country can easily relate to the target country (Ghemawat, 2016). However, which aspect to concentrate on is dependent on the type of industry. A product manufacturer would prefer doing business with the closest country due to transportation costs while a software company would hardly consider the distance. CAGE framework can hence be a starting point to understand the possible countries a business can trade with given the type of business (Ghemawat, 2014).

Any company looking for expansion can benefit from CAGE analysis. One of the companies today that has already expanded globally is the New Zealand based accounting software company “Xero”. The company develops cloud-based accounting software targeted for small scale and medium scale industries. Today Xero is present in Australia, US and UK. However, all the three international markets have considerable competitors in the field of accounting software. Hence, the company would have to migrate into a country that has lower competition and high customer base. Once of the easiest country to move into would be Canada as the CAGE distance is extremely similar to US. Another potential market for Xero would be Japan. The cultural distance in Japan is high and hence Xero should be able to adapt a version of the Japanese Language for their software along with a reliable customer service. The economic distance of Japan is one of the key factors for Xero to enter the Japan market. The currency rate of Japan is considerable high than the home currency (Moalla, 2014). The country is also in need of high quality financial services given the various start-ups of Japan. Also, penetrating any of the eastern markets would open doors to various other countries which would be beneficial to the organization.

References

Ghemawat, P. and Hout, T.M., 2014. Globalization, Capabilities, and Distance: Theory and a Case Study (of China). Globalization.

Ghemawat, P. and Hout, T.M., 2016. Globalization, Capabilities, and Distance. In The Oxford Handbook of Dynamic Capabilities.

Ghemawat, P., 2013. Redefining global strategy: Crossing borders in a world where differences still matter. Harvard Business Press.

Gobble, M.M., 2012. Innovation and strategy. Research-Technology Management, 55(3), pp.63-67.

Grant, R.M. and Jordan, J.J., 2015. Foundations of strategy. John Wiley & Sons.

Madsen, T.L., 2016. Business Policy and Strategy.

Moalla, E. and Mayrhofer, U., 2014. How do different dimensions of distance affect market entry mode choice? An application of the CAGE-distance framework (No. hal-01134087).

Rothaermel, F.T., 2015. Strategic management. McGraw-Hill.