The probable reason that explains why both companies control the same product types is insufficient innovation. In today’s business environments, there are several forces that may work against innovation. These ranges from social factors, financial factors, risk of weird perception by other firms, and the amount of time and initial efforts that may be required to learn how to operate or use some of the new products among others (Hitt, Ireland, & Hoskisson, 2011).
Lower speed of innovation may also be a contributing factor. Lower innovation speeds are prompted by factors such as the relative advantage or the ratio of risks to the benefits and the extent of switching speed of the consumers (Hitt et al, 2011). In addition, culture of the customers may greatly influence innovation through several factors such as the level of a culture’s reception of new products and ideas, homophility, opinion leadership, and physical distance (Hitt et al, 2011). These factors limit innovation of thereby making the firms, to trade in only a few product varieties as opposed to a wider range of products.
Question 1: Use of SWOT Analysis in Strategy Management
SWOT analysis refers to the process of keen evaluation of a business venture or a project and its environments by considering different dimensions of its strengths, weaknesses, opportunities and threats (Pahl & Richter, 2009). It involves evaluation and specification of the different business objectives and identification of the various internal and external influences that are favorable (positive) and unfavorable (negative) to the business’ objectives. In the context of business strategy, SWOT analysis should be used for myriad of purposes:
To begin with, it should be used in the evaluation of the different factors that influences various business operations: SWOT analysis provides significant guidance in making business’ future strategic decisions (Pahl & Richter, 2009). In addition, it should be used to provide some of the best productive methods of getting the different personnel and management teams to effectively get involved in the business decision making process. SWOT analysis should also provide the business with some of the information that may be vital in matching the business’ capabilities and resources to its competitors or the competitive milieu within which it operates (Pahl & Richter, 2009). Therefore, SWOT analysis should be very instrumental in the formulation and selection of the different business’ strategies.
Question 3: Johnson and Johnson Company and Tylenol Case
The situations relates to the concept of core values that are necessary in every business as a prerequisite for the realization of its various business strategies and visions. The core values are some of the ethics that are central to the operations of a business venture. They reflect some of the business’ profoundly held values and are independent of the contemporary environmental influences in the external environment of a business (Hitt, Ireland, & Hoskisson, 2011). According to Hitt et al (2011), while a business needs to adapt to the different competitions in the environment within which it operates, its core values remain constant and considerably steady in order to provide the necessary guidance to the decision making process of the business. The core values of a business are thus independent of the business structure and its products life cycle. In addition, core values of a business do not change with the changes that occur in the industry within which a business operates (Hitt et al, 2011). As such, an industry may be prompted to seek new market in circumstances where its core values are unappreciated.
There are various values that a business may choose to be a component of their business core values. These include: social responsibility, pioneering technology, integrity, excellent customer services, and creativity among others (Hitt et al, 2011). The case involving Johnson and Johnson Company and Tylenol can be categorized under integrity values.
The two directions relate to the concept of product feature definition versus the market scope business products. The first direction, which involves offering new products to the current products, describes what is termed as product development. It involves marketing new products to the existing customers of a company (Hitt, Ireland, & Hoskisson, 2011). The second option, involving offering current products to new markets, also describes what is referred to as market development. It involves marketing of a company’s existing range of products to different new markets. Basically, in the second option, the products do not change but they are marketed in new markets to new customers and audience.
The growth prospectus of a business depends on the whether it opts to market its products and services to the existing markets or the new markets. To achieve an effective development in a business, there are two strategies that can be considered: the competitive strategy and the portfolio strategy (Hitt, Ireland, & Hoskisson, 2011). An effective and efficient way to achieve business development necessitates the adoption of Ansoff’s product – market grid which assesses the current market-product combination of a company’s product and the corresponding degrees of the company’s competitive advantage (Hitt et al, 2011).
Product developments have various shortcomings such as the tendency of some cultures to adopt new products at a slower pace than others (Hitt et al, 2011). It may also be only suitable for certain products for instance auto markets. Therefore, market development remains the best direction for this company that contemplates growth in its market share. Market development has been successful for numerous companies around the globe. Coca-Cola, for instance, have adopted the market development approach for a long time: they continue to market their Coca-Cola brand to different new markets as opposed to introduction of new products to their existing customers (Hitt et al, 2011).
The strategic issues in this case involve the implementation problems that occur in the course of strategic management process in a company. During the implementation of a business plan or objectives, there are various problem areas that may be encountered ranging from extra resources, goals that need most support and attention, the various parties on target, and assertive encouragement among others (Hitt et al, 2011).
Since implementation process forms the most significant value of a plan, it is important to ensure that all the management and other stakeholders efficiently follow the goals, track the various implementation milestones and analyze the different plan versus results outcomes. Therefore, in the described case, I would support scrapping the current plan to start over again. This is due to the fact that one of the strategic management concepts that Hitt et al (2011) proposes support such a decision. They describe the different methods that executives should apply in managing various business plans.
According to them, it is significant to adjust business objectives and goals if circumstances necessitates or when changes occur making the pre-set goals unachievable (Hitt et al, 2011). They further proposes that in such cases, it is significant to consider some of the macro objectives in more definite manner in order to see whether economic, political, and social events are responsible for the changes and to review the different assumptions that were made during the formulation of the goals in attempt to test if they are still valid (Hitt et al, 2011).
Question 6: Single Source of Competitive Advantage versus Multiple Sources
It is better to nurture all the three competitive advantage strategies in a business operation compared to concentrating on a single competitive source. One of the significant ways to remain competitive in the market is to fully understand the various sources of competition in the industry within which a business operates (Hitt et al, 2011). The market environment in the today’s business atmosphere is dynamic and keeps changing. As such, it is significant to make any changes in the company’s business strategies and approaches that can allow the business to remain competitive. In addition, it is significant to take advantage of any available resources or business strategy that can enable the business to outdo its rivals.
Nurturing the three sources of competitive advantage also provides a wide range of option that can ensure that the company remains more competitive in the market. The three sources of competitive advantage can be utilized by the business to eliminate its vulnerability to different threats that it is likely to face in its external business environments. According to Pahl & Richter (2009), it is significant for a business to have numerous ways and options that it can use to utilize its strengths and to eliminate competition. As such, many sources of competitive advantage may be very significant as a competitive strategy tool than a single source.