Guide On Crafting And Executing Business Strategy Marketing Essay

A company’s strategy is management’s game plan for growing the business, staking out a market position, attracting and pleasing customers, competing successfully, conducting operations, and achieving targeted objectives. (Thompson, Strickland and Gamble 2005)

In an article written by Michael E. Porter, he pointed out that competitors can easily copy a company’s improvements in quality and efficiency. Best practices can be easily emulated. But, what rivals cannot or should not be able to copy is its strategic positioning of a company that distinguishes it from the rest. He argued that a company can outperform rivals only if it can establish a difference that it can preserve (Porter 1996). “Strategic positioning”, as he called it, means performing different activities from the rivals, or performing similar activities in different ways. Therefore, organizations have to formulate and implement a strategy to gain a competitive advantage.

A strategy is a formal set of activities that have been identified as the means through which stated aims and objectives are to be achieved (Combe 2006). By crafting a strategy, management is in effect declaring that ‘This is what we want to do and this is how we intend to do it.’

For instance, our case study, ‘Making It Big’ company has a notable strategy in doing business. MIB focuses on providing fashionable clothing for large or supersize women in the US. Unlike others, MIB has chosen to perform activities differently from its rivals. Instead of manufacturing the clothes in various colors, MIB has decided to manufacture the cloth in white or natural color then dyed to order in a variety of seasonal colors. In doing so, MIB wouldn’t have its money tied up in merchandize it could not sell due to unfavorable color choices.

Important thing to note is that a company’s strategy tends to change and evolve over time. A company’s strategy is partly planned and partly reactive. The biggest portion of a company’s current strategy flows from previously initiated actions and business approaches that are working well enough to merit continuation and newly launched managerial initiatives to strengthen the company’s overall position and performance. (Thompson, Strickland and Gamble 2005).

Four main strategic approaches

Four of the most frequently used strategic approaches to setting a company apart from rivals and achieving a sustainable competitive advantage are:

Being the industry’s low-cost provider ( there by gaining a cost-based competitive advantage over rivals)

Outcompeting rivals based on such differentiating features as higher quality, wider product selection, added performance, better service, more attractive styling, technological superiority, or unusually good value for the money

Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of niche buyers.

Developing expertise and resource strengths that give the company competitive capabilities that rivals can’t easily imitate or trump with capabilities of their own. (Thompson, Strickland and Gamble 2005)

Business Strategy and Business Model

There is a relationship between a company’s strategy and its business model. The process of designing business model comes as a part of business strategy [1] . A business model can be defined as the organisation of product, service and information flows, and the sources of revenues and benefits for suppliers and customers (Combe 2006).

In a nutshell, the ‘Business Model’ of a company tells how it makes money in its business. For example, the strategy of Amazon [2] , when it was founded by Jeff Bezo in 1994, is to provide a direct-to-customer channel that sells books with greater selection, convenience, quick and ease to use services. It sells its product through the Internet and has no physical bookstore. Thus, Amazon’s business model, strategically fit with its mission, differs from traditional brick-and-mortar bookshops like Barnes & Noble [3] at that time.

Identifying a Winning Strategy

Another important thing is to judge if a particular strategy adopted your company is winning or losing or simply mediocre. There are three questions to validate a winning strategy.

How well does the strategy fit the company’s situation?

Is the strategy helping the company achieve a sustainable competitive advantage?

Is the strategy resulting in better company performance?

A wining strategy fits the circumstances of a company’s external situation and its internal resource strengths and competitive capabilities, build competitive advantage and boosts company performance (Thompson, Strickland and Gamble 2005).

How strategy can be constructed and carried out effectively

Crafting and executing a strategy not only applies to multi-business corporate but also a small company can apply too. The managerial process of crafting and executing a company’s strategy consists of five interrelated and integrated tasks:

Developing a strategic vision of where the company needs to head and what its product-market-customer-technology focus should be.

Setting objectives.

Crafting a strategy to achieve the desired outcomes and move the company toward where it wants to go.

Implementing and executing the chosen strategy efficiently and effectively.

Evaluating performance and initiating corrective adjustments in vision, long-term direction, objectives, strategy, or execution in light of actual experience, changing conditions, new ideas, and new opportunities. (Thompson, Strickland and Gamble 2005)

Developing Strategic Vision

Developing a strategic vision is the first direction-setting task in the strategy-making process.

A strategic vision is a company’s roadmap that to achieve a position beyond what it is today. It shows where the company is heading, which buyer needs it wants to satisfy, its target customer and market segment and the kind of company it is trying to achieve. It entails management efforts to create a future-oriented roadmap for a company to spells out “where we are headed”. [4] 

A strategic vision is different from a mission statement. There are three elements in strategic vision. They are

Using the mission statement as a starting point

A company needs to develop a mission statement that states its current business activities and boundaries. A mission statement conveys the company’s present business scope and purpose – “who we are, what we do, and why we are here”

Develop a strategic vision that charts a course out to purse

Using the mission statement, next step is to develop a strategic vision that spells out a course to pursue. The company needs to define how the business will look like in the future, what would the future product-market-customer-technology focus be and what kinds of capabilities are needed.

Communicate the vision in a clear and exciting manner

After developing the strategic vision, a company’s management needs to communicate the vision down to the lower-level managers and employees. Explaining the vision and its underlying rationale is just as important as creating the vision. Otherwise, company personnel may not wholeheartedly support the management’s vision.

Setting Objectives

After the strategic vision has been defined, a company has to convert its vision into specific performance targets that can be used as yardsticks for measuring the company’s performance and progress. Well-stated objectives are quantifiable, or measureable, and contain a deadline for achievement (Thompson, Strickland and Gamble 2005). A particular objective should specify how much of what kind of performance by when. For example, instead of using vague words like “winning more market share”, one should state a strong objective like “winning a 70% percent of market share by 2012”.

In setting objectives, two types of balanced measurement – “financial objective” and “strategic objective” – are required. Financial objectives set the desired outcomes that improve a company’s financial performance and strategic objectives sets the outcomes that strengthen a firm’s competitiveness and long-term market position [5] . Combining both objectives, a company should take the balanced scorecard approach.

Crafting a Strategy

Once the strategic objectives are set in place, a company has to go through a strategy-making process that involves every managers of the company. Ultimately, CEO of a company has the main responsibility in lead the strategy-making and executing process. While the process is a collaborative team effort involving all managers down through the organizational hierarchy, there may be an exception in small owner-managed businesses. In the case study, for instance, MIB’s CEO Cynthia Riggs is the one who currently setting which strategic options to pursue – acting as the chief architect of MIB’s strategy.

Crafting a strategy is a united team effort that concerns primarily on how to respond to changing external environment, how to out-compete rivals and achieve a sustainable competitive advantage and how to make the company’s strategic vision a reality [6] .

Executing a Strategy

The most demanding and time-consuming part of the strategy-management process is implementing and executing a strategy. It is an operation-oriented, make-things-happen activity aimed at shaping the performance of core business activities in strategy-supportive manner.

To convert strategic plans into actions and results, a manger must be able to direct organizational change, motivate people, build and strengthen company competencies and competitive capabilities, create a strategy-supportive work climate, and meet or beat performance targets. (Thompson, Strickland and Gamble 2005)

Assessing what the company will have to do differently or better to execute the strategy proficiently and achieve the target performance, managers have to think of how to position their responsible areas to fit into the strategic plan. Management team has to answer how much internal changes are needed, which actions are needed to implement the process, how well the current environment supports the go-forward strategy.

Following activities primarily outline the strategy-execution process in most situations:

Staffing the organization with the needed skills and expertise, consciously building and strengthening strategy-supportive competencies and competitive capabilities, and organizing the work effort.

Developing budgets that steer ample resources into those activities critical to strategic success.

Ensuring that policies and operating procedures facilitate rather than impede effective execution.

Using the best-known practices to perform core business activities and pushing for continuous improvement.

Installing information and operating systems that enable company personnel to better carry out their strategic roles day in and day out.

Motivating people to pursue the target objectives energetically and, if need be, modifying their duties and job behavior to better fit the requirements of successful strategy execution.

Tying rewards and incentives directly to the achievement of performance objectives and good strategy execution.

Creating a company culture and work climate conducive to successful strategy implementing and execution.

Exerting the internal leadership needed to drive implementation forward and keep improving strategy execution. (Thompson, Strickland and Gamble 2005)

Value of Key Analytical Tools and Their Usage in Strategy-making Process

There are key analytical tools that can be used in assessing a company’s external and internal environment. Using such tools can help the managers decide a suitable strategy in their strategy-making process. Some key analytical tools are:

Five Forces Model of Competition

SWOT Analysis

Value Chain Analysis

Benchmarking

Five Forces Model of Competition

“Five Forces Model of Competition” is a key tool for diagnosing the competitive environment of a company. It is a valuable tool in diagnosing the principal competitive pressure in a market and assessing the strength and importance of each is the five-forces model of competition.

One must be able to perceptively diagnosing a company’s external and internal environment to succeed in crafting a strategy. Thinking strategically about a company’s industry and competitive environment is essential in strategy-making process. In this process, five-forces model of competition tool kicks in to answer what kinds of competitive forces industry members are facing.

This tool assesses the strength of following five competitive forces:

Rivalry among competing sellers

Competition from substitute products

Bargaining power of suppliers and supplier-seller collaboration

Bargaining power of buyers and buyer-seller collaboration

Competition threat from potential new entrants

In summary, this tool can be applied in analyzing a company’s external environment and identifying its competitive forces.

SWOT Analysis

SWOT analysis is a tool to evaluate the Strengths, Weakness, Opportunities and Threats of a company. SWOT analysis can give a good overview of whether a company’s overall situation is fundamentally healthy or unhealthy. This tool identifies the following factors:

Company resource strengths and competitive capabilities

Company resource weakness and competitive deficiencies

Company’s market opportunities

Threats to a company’s future profitability

By completing this analysis, one can make conclusion on the company’s situation and determine actions to improve the company’s strategy and business prospects. No matter how big or small a company is, SWOT analysis can be applied to analyze a company’s resources and competitive position.

Value Chain Analysis

In order to determine whether a company’s prices and costs are competitive and winning in the marketplace, a key analytical tool called value chain analysis is used. A company’s value chain shows the link set of value-creating activities the company performs internally. Value chain analysis is valuable in assessing a company’s cost competitiveness. It analyzes the primary and supportive activities of a company and their costs; thus, comparing the costs all along the industry’s value chain including suppliers and forward channel allies’ value chains.

Leveraging on the value chain analysis, a company can manage its value chain to gain competitive advantage.

Benchmarking

Benchmarking is a tool that focuses on cross-company comparisons of how certain activities are performed and the costs associated with these activities. It compares how different companies perform various value chain activities such as purchase of raw materials, inventory management, employee trainings, handling orders.

Benchmarking is a useful tool in evaluating whether a company is performing a value chain activity using ‘best practices’ adopted by front-runner in the industry. By studying how the practices and procedures used by other companies, a company can take action to improve its cost competitiveness. However, one must do the analysis following the ethical code of conduct.

This tool can be applied when a business is facing cost disadvantage over rivals. It is a key analytical tool in the strategy-making process.

Making It Big’s SWOT analysis

Like every other businesses, Making It Big Company’s goal is to move forward and grow its business to the ‘next level’. MIB’s objectives are to increase sales, revenues, customer base and to achieve a sustainable competitive advantage. In order to achieve the objectives, MIB must understand its own internal and external factors that are favorable or unfavorable to achieving its objectives.

A powerful tool called SWOT analysis can help evaluate the MIB’s Strengths, Weaknesses, Opportunities and Threats by sizing up MIB’s resource capabilities and deficiencies, its market opportunities, and the external threats to its future well-being. (Thompson, Strickland and Gamble 2005)

Strengths

Strengths are attributes that enhances MIB’s competitiveness and favorable to achieve its organizational goal.

Insight knowledge on customers

One of the main attributes that strengthen MIB’s position in the plus-size apparel market is its insight knowledge on the customers. Cynthia, a university graduate majoring in Humanistic Psychology and CEO of MIB, understands how big women feel about themselves and their bodies. Being a tall and big-boned girl herself, Cynthia knows that large women would love the casual style, trendy colors and flattering fit. She also had experienced the frustration of large women whose clothing choices were limited and not stylish. Through her friends, she came to know that the fat people, especially women, were mistreated while they all cannot be stereotyped as “lazy” people.

Based on the case study, MIB was born out of her inspiration to make the lives of fat women easier by clothing fit and decent apparels. With such tremendous passion for customer, MIB gained important expertise in providing plus-size apparels to all over the United States especially California. This is a valuable and intangible strength rivals cannot easily copy.

Strong customer base

Another key strength of MIB is having a strong buyer loyalty and goodwill. Through road shows and fashion shows, MIB has obtained valuable customers. Started with Cynthia’s army drawstring surplus parachute pants, MIB got strong customer base while it is difficult to get customers through usual marketing channels.

Initially, MIB was simply mailing the catalogs to the list of customers mostly obtained through Cynthia’s parachute-pants tour. Not only did that method work, using a conventional mail order business had also generated stronger customer base.

Case study mentioned that it is very hard to find new customers in plus-size apparel market. However, MIB already have an incredibly loyal customer base. Most of MIB’s sales were from repeat customers. It shows that MIB is able to attract its customers to keep coming back. This is a significant strength in this niche market.

Single brand and Wide Product Range

If we consider the MIB’s brand strategy, “Making It Big” is the single brand that offers almost everything every large woman would keep in their wardrobe. MIB’s ability to offer a full line of plus-size clothing and accessories under a single brand is another factor to consider in assessing its strength. Strengthening and simplifying its brand identity plays an important role to attract new customers.

MIB offers clothes and accessories in four main categories: career wear, casual sportswear, formal wear and outerwear. Accessories such as jewelry, scarves, shoes etc. are outsourced via selected local vendors. MIB manufactured more than 90 percent of the products it sold. Offering wide range of products for large women, MIB strengthen its position as a one-stop apparel shop for big women.

Capacity for innovation

In terms of innovation, there are two things that show the capabilities of MIB. First one is Cynthia’s mail order concept. Call her gullible, without any specific knowledge on mail order business, Cynthia has researched and developed a mail order concept and it worked. It proved to be an advantage in the niche, little-explored market. It also shows that MIB has the capacity to do old things with new approach.

Another innovative approach MIB has taken is its manufacturing method, which supports better inventory management. MIB manufactures the garments in white or natural color then dyes the color based on customer’s preference. In that way, customers can choose their favorite color while the company does not have its money tied up in merchandize it cannot sell. It is a unique strength MIB has, in terms of innovation.

Comprehensive website

Staying current with Internet technology, MIB has launched a comprehensive Web site to showcase its products. By adopting such click and mortar business model, MIB has opened up an additional channel to undertake business with customers (Business to Customer, B2C). As we can see in Figure 2.2, MIB Internet sales were growing steadily since beginning. It has also been reported that nearly half of MIB’s mail order sales were from online purchases.

While there may be rooms for opportunities to improve its web site, having a comprehensive website in place to advertise and sell MIB products is a considerable strength to grow the company at ‘next level’.

Figure 2.1 – MIB Sales by Source, 1997-2002

Catalog creation experience/learning curve

During the course of doing business, MIB has gained valuable experiences in catalog creation. For instance, company members learnt that a product’s presentation in the catalog directly affects its sales. So, the catalog is structured in a “grouping” format for the convenience of customers. It is a learning curve advantage over rivals.

Good credit history

Financially, MIB may not be the strongest player in the market. But it has built-up the confidence from financial institution through modest year-by-year growth. MIB started the business with ‘Cash On Delivery’ (COD) method which was a big constraint for a small manufacturing company. Over the years, MIB has built-up a good credit history.

Now, MIB has $100,000 line of credit and has developed excellent relationships with its business counterparts. Based on the case study, it shows that MIB has enough financial resources to grow.

Miscellaneous factors

Multiple distribution channels: MIB has a direct-to-customer sales channel via 32-page color catalog, a retail outlet, a comprehensive website and unique Houseparties.

Dedicated workforce: If we look at the top management of MIB, it shows Cynthia, the founder, has strength in cash flow and inventory management, customer relations and product development. While it is true that MIB employees have to work hard in high-pressure environment, we can see that they are dedicated in their work. For instance, Sharon, the production manager, has exceptional people skills, analytic skills and loyalty.

Weakness

A weakness, or competitive deficiency, is something a company lacks or does poorly (in comparison to others) or a condition that puts it at a disadvantage in the marketplace. In short, unfavorable attributes that hinder the company’s objectives are the weaknesses. (Thompson, Strickland and Gamble 2005)

No clear strategic vision

As a business shaped by the tangible events in the course of doing business, MIB lacks overall strategy to drive forward. On one hand, Cynthia, founder of MIB, never thought that the business could last for 20 years when it was started with the strength of ‘single aspiration.’ On the other hand, Cynthia’s burden of being the sole decision maker is taking its toll. Since she has to involve in day-to-day operations, she has no time to plan and execute growth strategy for MIB as well.

Like every other business, the aim and objective of MIB is to ‘grow’. But a company being managed as an improvisational style and without strong visions and strategy can eventually end up nowhere. A company’s strategy is typically a blend of (1) proactive actions on the part of mangers to improve the company’s market position and financial performance and (2) as needed reactions to unanticipated developments and fresh market conditions (Thompson, Strickland and Gamble 2005). Thus, MIB needs a clear strategic vision and the strategy linked to it.

Shortcomings of CEO

Cynthia’s lack of confidence is another obstacle for the company to grow at next level. Current sales decline and staffing problem, which we will discuss in next session, is another factor reflecting Cynthia’s ability to plan and execute the strategies. Taking the rein of the company tightly, Cynthia is now getting burnt out.

Even after 20 years as CEO, she still lacks essential skills such as communication and marketing skills. Dealing with her staff, for instance, shows that she is demanding and expects too much from them. Her lack of marketing skills is a fact as well. While it is true that no one is flawless, a CEO’s shortcomings to plan and craft and execute the long-term strategies for the company hinder its opportunity to grow.

Human resources problems

Staffing on the management level is the most challenging issue for MIB. In addition, none of the top management team members have a good background on marketing. (See appendix A). Cynthia takes most of marketing responsibilities but her plans are not panning out. Bridget, ex-general manager of MIB, left the company due to the sheer amount of marketing responsibilities. Likewise, Cindy, retail manager, is struggling with the marketing and advertising aspects of the retail store.

Due to the fire-fighting style of management, burnout seems inevitable for every employees of MIB. It is not a good sign for MIB. Bridget’s departure was the whistleblower for the company to change its course. Otherwise, Sharon may get exhausted and leave the company. In current situation, MIB cannot afford to lose another key employee. MIB’s failure to find and retain the right people is a significant weakness.

For a company to be outstanding in the marketplace, it should have the competencies and capabilities that are well matched to industrial key success factors. To possess such capabilities, MIB must have a competent workforce with the right skill set in the right place. Based on the case study, MIB is weak in human-resources.

Behind rivals in marketing

Unlike its rival Charming Shoppes, MIB does not have a sophisticated customer information system to strengthen its marketing capabilities. Charming Shoppes Inc, America’s largest plus-size women’s specialty apparel retailer, has the technology to keep detailed profiles of its customers, in order to refine its direct mail and adjust inventory for maximum profitability. It is a competitive deficiency that MIB’s marketing resources are inferior to rivals.

Self-manufacture

Case study stated that Mast Industries, the leading contract manufacturer of regular and large clothing, is producing clothing for many established brands including Lane Bryant, the leading competitor in plus-size apparel market.

Unfortunately, MIB wasn’t able to establish a contract with any manufacturers. MIB has to manufacture almost all the supplies by itself, which is a labor-intensive and time consuming task. Therefore, from a new idea to end-product, MIB may be slow to deliver a new product to customers. We can consider this as a competitive deficiency comparing to its rivals, Lane Bryant.

Opportunities

Opportunities are external conditions that are helpful to achieving the objective.

Rising demands in plus-size apparel market

According to Centers for Disease Control and Prevention, estimated 65% of American adults are overweight and half of American women are wearing size 14 or larger. More than one-third of U.S. adults – over 72 million people – were obese in 2005-2006. (Ogden CL n.d.)

Case study stated that plus-size sales accounted for one-fifth of all U.S. women’s apparel spending in 2001 and it is expected to increase.

Furthermore, industry experts believe that U.S. retail sales for plus-size apparel alone were expected to reach $47 billion by 2005. For MIB, who specialize in plus-size apparel, it is a good opportunity to grow.

Expanding into new geographic markets

According to a research report by InfoMat.com, American plus-size clothing companies have a great advantage in exporting to Canada. Although there is a significant consumer group of women requiring plus-size clothing, very few retailers specialize in that area in Canada. Due to the upward trend in obesity and aging population of baby boomers, buyer demands in plus-size apparel market will continue to rise. (www.InfoMat.com 2006)

MIB’s expertise in plus-size apparel in U.S. can also apply to Canada market as two countries have very similar fashion trends [7] , the report says. Thus, it is an opportunity for MIB to expand its market coverage and take competitive advantage.

Explore manufacturing partners in U.S. and other countries

MIB founders’ initial effort to engage a clothing manufacturer in 1983 was failed as the order quantities expected by the manufacturers were beyond the limit of a start-up company that lacked a sure idea of what it could sell.

Now, a business with more than 20 years of experience, MIB has fairly reasonable financial resources and expertise to pursue a manufacturer in U.S. or other countries. It has opened up an opportunity for MIB to strengthen its competitive capability in manufacturing.

Alliance with department stores

According to exhibit 6 “U.S. Retail Sales of Women’s Apparel by Distribution Channel” in the case study, 19 percent of total apparel sales were sold through Department stores such Macy’s and Nordstrom. Reacting to the increasing demands in plus-size apparel market, such department stores have started offering plus-size clothing.

It opens an opportunity for MIB to expand its market share by offering MIB clothes in department stores.

Increase product line / Widen or diversify target market

MIB is well-aligned to fulfill the needs for growing plus-size apparel market. In the mean time, demands for plus-size apparels are growing. It paves the way for MIB to increase the product lines.

Threats

Threats: external conditions which could do damage to the objective.

New entrants into plus-size apparel market

Due to the good prospects of plus-size apparel market, many players in U.S apparel industry have entered into this niche market. For instance, well-known brands such as Liz Claiborne and Tommy Hilfiger had launched lines catering to large women. Therefore, such new entrants threaten MIB’s position in plus-size apparel market.

Increasing intensity of competitions

As new competitors came into plus-size clothing market, the competitions in this niche market will increase.

In 2004, two grandsons of the founder of “Lane Bryant” founded a new specialty chain called “Fashion To Figure” (FTF) to enter the plus-size apparel business. [

Cite This Work

To export a reference to this article please select a referencing stye below:



Reference Copied to Clipboard.


Reference Copied to Clipboard.


Reference Copied to Clipboard.


Reference Copied to Clipboard.


Reference Copied to Clipboard.


Reference Copied to Clipboard.


Reference Copied to Clipboard.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our Guarantees

Money-back Guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism Guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision Policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy Policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation Guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more