Posted at 10.14.2018
Business level strategy concentrates on developing a strong specific model that will allow the firm to get competitive edge over its competitors on the market such as where it performs. Business strategy would focus on increasing its competitive position of the company's or business unit's products within the specific industry or market segment that the business and/ or its business units serve. The question explored running a business level strategy is:
How a firm can best be competed in the industry they are in?
For a good example Honda motors, Japan has a local market because of its products and also it manages internationally. Thus business strategy should be built focussing on the means of how it out beat the domestic opponents who manages both in the home market and the as the in the international market like Mazda, Mitsubishi, Daihatsu, Suzuki, Toyota and Nissan and rivals in the international market like Standard motors, Chrysler, Ford Motors etc.
In formulating business level strategies, organization should think about how best it can be competitive in each one of the industries it operates in. Thus business level strategies require crafting the strategy and setting the organization in each of its business. For a good example Honda should formulate another business strategy for its motor cycle production section that attempts to add build competitive advantage over rival, street bike manufacturers. And there should be another business level strategy for its car mobile manufacturing section that addresses the ways and means of contending against rival automobile manufacturers and a separate strategy for power products (machines, portable generators, lawnmowers, outbound motors) developing division that attempts to build competitive edge over electric power product manufacturers on the market.
Corporate strategy is to a firm's success and success and it is largely about the decision of the way for the company as a whole. I. e. Corporate level strategy represents company's overall course in terms of its basic attitude towards growth and the management of its various business and products. Corporate strategy is concerned with two key questions,
What business should the company be in to maximize the long-term profitability of the company?
What strategies should it use to enter into and can be found from the business enterprise area?
This is true whether the firm is a small, one product company or a large multi national corporation. Corporate strategy in a multinational company is all about managing various products and sections for maximum value. In this situation, corporate head quarters must play the role of the organisational 'Parent' for the reason that it must package with various products and business product 'Children'. Even though each product line or business unit has its competitive or corporative strategy it uses to acquire its competitive advantages on the market place, the organization must organize these different business strategies to become succeeded.
For an example Honda Motors, even though there are numerous competitive or corporative business strategies at various business device levels, it is the top management that chooses the overall path and goals for the complete company. i. e. even though there are several business sections as motor cycle manufacturing, vehicle mobile creation and electric power product manufacturing and different competitive or corporative strategies used by each one of these segments at business level, corporate level strategy for each and every of these segments yet.
Honda's underlying progressive strategic management process is referred to as "reconciling dichotomies" There can be seen amount of dichotomies that encompasses management thinking and pass through all the functions and as well as aspects such as buyer supplier relations (e. g. Vertical integration and market relations), work company, (useful and humane), product development procedures (simultaneous and sequential development), business strategy (cost and differentiation) etc. They are worried as paradoxes that needs to be resolved implicitly by the western while Honda's way of thinking is completely different.
A dichotomy reconciliation way exemplifies both school of thought behind the actual product design and the mental process of technology research. When considering about the merchandise related center competencies in Honda, its adherence to the principle of build in quality has brings forth the competitive gain to Honda. The build-in quality theory focuses on making sure the effectiveness of the performance final result of sub transformation activities. The measure of performance is customer described benchmarks of performance that may be achieved by breaking down the full total standard of performance methods needlessly to say by the clients to amount of sub activities where value adding can be understood at every level of the procedure in a way that it gives a greater accrued value by enough time of functions process reaches its end. This brings about a decrease in costs and the as exceed expectations of the clients. For the reason that sense build in quality principle highly emphasis regarding product related functions which are assessed by the clients eventually. The progress internal combustion machines which power the complete selection of Honda products is being regarded as a core competency, which is also a successful reconciliation of dichotomies, deliver immediate and immediate competitive edge for Honda.
The right-the-first process constitute that the consequence of any process should be free of errors. An error occurred in a specific process necessitate re-working on it before it passed on to next stage of the development process, which might led to delaying the whole production process and as well as increasing the functional costs, costs of lost opportunities of sales attained from customers who choose not to hang on and swap to other brands. As such right- the- first theory adopted by Honda, will improve its functional efficiency by not squandering time and other resources by increasing productivity. More over its intro of Just WITH TIME development and logistic system contributes to more accurate inventory control that save cost further. It can be pointed out as a dichotomy reconciliation that permits both product variety and successful efficiency.
Western flawed assumption of management thinking was that the right-first time and the build-in quality is only a dichotomy that requires places only when a substitution of getting the benefits in one at the disbursement of the other is assumed as it is viewed only from a manufacturer's perspective, which has to be at least focused from a dual point of view, the maker and the customer. If it ought to be considered from a multiple point of view, taking all partners in the resource chain directly into account.
Doing things right the first time is a cost benefits approach as it helps to eliminate waste and decrease the necessity of reworking. Lower operating costs can convert into higher margins, which is helpful in appealing to customers by offering them the products at a reasonable price and it too will avoid customers from moving over to rival brands.
Customers not judged a product by involving only on its quality, but its entire blend that brings forth the huge benefits and there fore value to them. Thus the features and attributes like delivery time and cost of purchase and possession are too considered through to. Quality is there fore both process and product centered. For a good example the worthiness of high product quality due to its superior features, characteristics and characteristics can be dismissed by slow delivery times if things aren't done right the very first time.
Through its variety of management strategies Honda has shown that the notice of right- first time and build- in quality is not different in mother nature and will not exist in isolation but are rather similar and complementary operations if the draw strategy is implemented placing customers before else.
Question Two: Global Mergers and Acquisitions (M&A)
Mergers and acquisitions have been the emphasis of corporate strategies over the last few decades, with a growing amount of mergers across the globe, especially in the automobile industry. A merger or acquisition is a combination of two companies where one company is completely ingested by another company. The less important company loses its id and becomes area of the more important firm, which keeps its personality.
Mergers and acquisitions can occur for amount of reasons. One such is to beat too much personal debt or to avoid individual bankruptcy situations. Dealer bankruptcies make up the first wave of restructuring and the pace of bankruptcy fillings will continue to accelerate in the near term. As credit becomes more widely available and companies are able to safe and sound liquidity, you will see a wave of Mergers and acquisitions. If a particular company is undergoing enormous money and locates it difficult to overcome competition or to survive on the market, management could make a choice to get a divesture. As a result company may sell out to another firm or may go for a merger.
If a firm is suffering from a personal bankruptcy situation, perhaps it may decide to move for a sell out strategy. Financially viable opponents in the same industry may considering merging with or acquiring another corporation in the same industry despite having huge debts or under a individual bankruptcy state if there is any potential advantage of merging or acquiring is witnessed. Some times it may be due to company's ability to create goods efficiently if they combined their efforts and facilities. These efficiency benefits may come simply by virtue of the size of the mixed company; it might be cheaper to create goods on a huge level. Collaborating or writing experience may achieve increases in efficiency, or a firm may have underutilize possessions that the other company can better use if not due to technology or the brand image or any other unique attribute open to the bankrupt company.
Through such merger or an acquisition, the company which suffered with financial difficulties will lessen its burden as it has the ability to overcome its money as the change in the management may make the business more profitable
Automotive mergers and acquisitions become method of increasing market talk about, bettering reach attaining economies of level and augmenting product ranges. Automotive mergers are turning into a strategic option for companies looking to accelerate development.
Through mergers or acquisitions companies designed to boost synergies through their complementary advantages in product line-up, procurement, R&D, marketing and personal training which would cause cost reductions, higher global market penetration and other benefits through organization. Due to a merger or an acquisition a corporation would get the access to up to when technology, an internationally network and advanced managerial experience. In addition considerable cost savings have been achieved by way of a common purchasing strategy and by setting up a common dealer base. Common programs will be developed to reduce time for new product intro.
Achieving of synergies is the perfect sought in commercial mergers and acquisitions. Synergy refers to an increase in the amount of performance of any combined organization that will go beyond the previous specific performance when it was operated separately. For an example managerial economies like the increased opportunity of managerial specialisation, specialized economies such as technical know how, purchasing economies anticipated to increased order size and associated large buying discounts. In car industry there are several synergies that may be achieved through mergers and acquisitions. For an example in 1990 Honda came into in to an arrangement with Rover under which Honda received minority shareholding in Rover to be able to begin European production of Honda Accord.
And also once Honda rewind its formal associations experienced with Rover, BMW purchased Rover Company from its parent company with the expectation of expanding its capacity from 600, 000 to 800, 000 by 1999 with 150, 000 of the vehicles exported.
Mergers and acquisitions bring forth several technology and platform sharing agreements, enabling companies to lessen product development time and costs. Further it will be helpful in moving in to new markets
Through mergers and acquisitions companies can obtain technology economies. I. e. Mergers and acquisitions will bring about enhancing the level of technology posting and utilisation than previous. As such in vehicle industry there may be seen major acquisitions or mergers. For an example in 1979 Honda Engine company signed technical collaboration with British Leyland (Now Rover Group), covering United kingdom Leyland development of Triumph Acclaim automobiles in britain. It had been a step taken to enter in to the Western market and also to have the technology of Rover Group.
As mentioned earlier, mergers and acquisitions can be seen as a way of getting into strange, emerging market segments. Some countries in the growing market segments such as India, China, and Thailand are growing at a spectacular rate. Thus this phenomenal development rates are getting global motor vehicle majors to these market segments in increasing volumes. Companies are resorting to acquisitions or mergers to get foothold in these market segments due to certain social reasons or even to accommodate dissimilarities in two cultures.
Question Three: Commercial Social obligations & Competitiveness
Corporate Friendly Responsibility (CSR) has permeated management practice and theory up to a point where CSR can be known as the latest management fad (Guthey, Langer & Morsing, 2006). However, so far CSR integration in to business techniques has been very uneven. (Hockerts, 2008)
CSR is also known as Corporate Citizenship, Responsible Business, Sustainable Responsible Business (SRB), or Commercial Social Performance. The concept of cultural responsibility proposes a private corporation has responsibilities to society and also to the surroundings that extended beyond making a earnings. It is a form of corporate self legislation integrated directly into a business design that functions as an integral, self-regulating system whereby business would monitor and ensure its support to law, ethical expectations, and international norms.
Further more, CSR focused business would proactively uphold the public interest by heartening community development and development, and voluntarily eliminating practices that injury the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of general population interest directly into corporate decision making and the honouring of an triple important thing; People, Planet, Revenue. While People and World in the triple important thing concept symbolizes the non financial aspects a firm should concentrates on when carrying out its business in addition to the financial facet of making money.
The vehicle industry at the moment faces difficulties that lengthen beyond the framework of automotive technology, including the reduction of global warming by investing in zero emissions within a concentrated work toward issues concerning the global environment, eradication of thrown away resources and environmental degradation through mass development, sales and removal and the realization of fail safe travel system. It's important for an organization, specially a car maker to be focused on preventing environmental devastation and destruction when building its plants and the as carrying out its processing activities. A new evolution is required, where lean creation can be applied beyond the sphere of technological innovation to contribute to reforming syndication, logistics, recycling and as well as cultural systems.
As such consumers expect motor vehicle corporations to take a dynamic role in the economic and sociable development of their country. Consumers across the world are very likely to admit or reject a company based on its reputation for social and environmental responsibility. CSR studies indicate that consumers are more likely to buy something or something from a corporation with sensible business practices plus they would avoid purchasing a product or service if the corporation didn't follow green or moral business procedures.
Among the global motor vehicle businesses BMW, Honda, Toyota and Volvo vehicles ranked highest for corporate communal responsibility. BMW graded highest in the Spain and the as with Italy; Honda for USA, UK and Indonesia, Toyota for Japan, Korea and Thailand and Volvo trucks for Sweden and Netherlands.
Remy Pothet, Global Director TNS Automotive, feedback that "Large businesses are ever more aware that their communal responsibility directly impacts their image and brand collateral and therefore, their business success. As such heavy investment funds in CSR can be seen in the market segments where they may be focusing on expansion. The result of our review highlights the publics growing interest in neuro-scientific CSR, and makes a direct hyperlink between this and their purchasing behavior. "
Bonsi concludes, "The general public is a very important stake holder for the automotive industry as a corporation's reputation is often judged in the courtroom of public view. Corporations that fail to engage contemporary society often go through serious outcomes when there is a crisis. However organizations that create a strong public goodwill can make use of it as a social insurance to tide them over during difficult intervals. The CSR champions discovered by this research are already viewing the value in their investment; now other companies need to take notice. "
According to the management literature, there is a grand distinction between your traditional western management style and Japanese management style in terms of overall information work processes, development organisation and logistic management techniques, company and labour relationships etc.
When concerning about the overall description western management model, Ford system of mass development which causes standardisation and mass marketing is the essential paradigm for development systems in western countries that pays high attention on large lot, just in case production. Where as Japanese developed an alternative production system called Japanese creation system or Just WITH TIME (JIT), which really is a flexible developing system. A further development of this is also known as lean processing. They honored the Draw strategy of marketing their products as oppose to the Drive strategy of marketing implemented by the european countries.
The need for the Japanese processing is it discovered the side effects of mass creation with high volume of manufacturing that centers single attention towards overall economy of scale alternatively than cost reduction through elimination of lost resources through streamlined development. JIT creation and synchronized developing that created what, when, and exactly how much was necessary and eliminated wasteful techniques and stock. This was resulted in finding yourself of circuit of stockpiles and dissolved the rigidity of creation where only existing products stayed made with existing technology.
When concentrating the peculiarities between american and Japanese work functions, almost all of the european work processes were builds after taylorism theory which emphasis the need of breaking down of every action, job or activity in to small and simple segments that can be easily examined and taught. Accordingly traditional western employees are deemed to be ' Do individuals' and almost all of them are unskilled thus they are expected to be performed in ways they thought, and just the jobs or tasks allocated to them. But Japanese employees are considered to be 'Think personnel' where they are anticipated to be impressive, polyvalent and versatile rather than just executing an given job or a task. Therefore Japanese management model is more appropriate and suitable to today's' sophisticated business context due to above mentioned grounds.
First and fore generally the report talked about about the business level strategy and the organization level strategy in the global business context. It was likened and contrasted the business level strategies and the corporate strategies in the global car industry. Then it evaluated the process of 'reconciling dichotomies' at Honda Motors with reference to the 'product-related key competencies versus process -related key capabilities' dichotomy.
Secondly it assessed critically the impact of certain factors such as too much arrears and risk of individual bankruptcy, potential product synergies, access to new technologies and emerging markets on Mergers and Acquisitions (M&A) in the global vehicle industry, using appropriate illustrations from the global automotive industry.
In current business framework Corporate Community Responsibility bears an important place. So latter part of the report targets the corporate cultural responsibility and the competitiveness, using information from relevant books on 'Commercial Social Responsibility (CSR)' and appropriate samples from global motor vehicle manufacturers and suppliers. Further it mentioned the impact of CSR on organisational performance in both financial and non-financial areas.
Finally it was likened and contrasted japan and Western tactical control models and advised the Japanese proper leadership model as the most appropriate model owing to the unique features and talents determined in it with in comparison to Western strategic control model.