Foss (1998) asserts that RBV focuses mainly on the resources and capabilities in which company have; furthermore he indicates that this means that all organizations develop unique resources and capabilities in which are the main source of competitive advantage and that the best that differing resources and capabilities provides the company with the potential for competitive
The motivations to joint ventures for strategic reasons are numerous. These motives primarily relate to amplifying of both the market power (Boyle, 1968; Fusfeld, 1958; Mead, 1967; Pate, 1969) and higher performance with competitive maximization (Backman, 1965; Berg & Friedman, 1977,1978; Stuckey, 1983). Vernon (1983), sees joint ventures as a defensive mechanism for firms to hedge against strategic uncertainty. Especially in industries of moderate concentration where collusion is difficult to achieve despite of the potential benefits of coordinating the interdependence among
INTEGRATION: STRATEGIC PROCUREMENT AND COMPETITVE ADVANTAGE Integration of strategic procurement and competitive advantages in an organization leads to basic competencies such as having access to raw materials, suppliers with an effective system for measuring quality of products supplied; develop advantage over competitors in relationship with suppliers, working close together with suppliers on product development efforts and close working relationship with suppliers to improve each other’s processes. This will foster benefits for both company and the supplier organization, while providing the maximum transaction value in the long run. Sourcing or procurement is the main aspect of a business organization when considering inputs. Sourcing is the methodology of finding the right supplier, right product, in the right time, at the right price, in correct quantities and right qualities. Sourcing strategy can be illustrated in the following process.
sales), with external centralization (e.g. R&D) and decentralization of other functions and practices (e.g. production), enabling it to reap the rewards of global efficiency, while at the same time maintaining flexibility and facilitating worldwide learning, validating the concept of transnational companies as the most appropriate structures of contemporary multinational companies (…) » 2. What role does flexibility play in Danfoss Trata and how does Danfoss Trata create flexibility within its organization? First of all, Danfoss Trata can be characterized as a type of industry who need flexibility.
Michael Porter has devoted many of his studies to the creation and maintenance of the competitive advantage of a nation. In his studies, Porter distances from classic economic theories and blatantly states that the ability of a nation to possess a competitive advantage depends on its ability to innovate and to be inimitable. 1. Innovation allows companies to succeed in international markets, especially when competitors are slow to respond to those inventions that “anticipate both domestic and foreign needs”. (Porter M. E., 1990, p. 217) The ability to innovate is central to a firm’s success; for example, the success of many Japanese firms can be credited to their ability to continually create ideas that suit the needs of global customers.
Question 16 16. Global outsourcing has been claimed as one of the major drives for the globalization of production. Discuss how global outsourcing benefits the firms and why firms choose to engage in outsourcing. Answer : Global outsourcing is a strategic acquisition in which business is to find the most cost effective location for the manufacture of the product, even if the location is in a foreign country. For example, if the manufacture of toys found that manufacturing and delivery at a lower cost because of lower foreign country in a foreign country because of lower wages of migrant workers, the company may close the plant using domestic and foreign manufacturers.
This reduces economies of scale, increases in import competitions and provided improved structures of vertical integration. Another econometric cram of the US telephone industry by Gort and Sung (1999) uttered that greater efficiency in the industry is produced by increased competition. They assume that efficiency can be affected by competition through multiple ways; to stimulate demand give greater incentives, capital input quality must be higher, reduction in cot of monitoring and efficient use of firm’s capital and most importantly innovation must be rivalry stimulating. Job creation, Industrial structure and start
Because Strategic Sourcing is so comprehensive, there is a high probability that the criticality and scope of Strategic Sourcing ends up involving much more. It can result in a cross-functional/cross enterprise effort intended to optimize the “concept-to-cash” supply chain performance. It is an ongoing endeavor to evolve both internal and external processes to obtain the highest level of strategic benefit for a business. When done correctly, the results are immense and ultimately position an organization to achieve a competitive advantage in the marketplace through its
Export-led Growth is an economic policy aiming to speed up the industrialization process of a country by exporting goods in which the nation has a comparative advantage. The strategy implies opening domestic markets to foreign competition in exchange for access to markets of other countries. However this may not be true of all domestic markets as governments aim to protect specific emerging industries so that they grow and are able to exploit their future comparative advantage and in practice the converse can occur. There are essentially two types of exports that are used in this context, namely, Manufactured Goods (Goods made on a large scale using machinery) and raw materials. Manufactured goods are most commonly used to achieve export-led growth.
Furthermore, competitiveness describes the ability of a company to offer products and services that meet or exceed the quality standards that are set by the local or global markets at competitive price. To add on, the company should be able to compete with other firms and sustain stable in the market on the long run. Importance of competitiveness The importance of competiveness relies on the company to generate greater volume of revenue and take an advantage on their competitors. Moreover, a competitive firm gives a greater value for the firm 's shares. A competitive business reflects its ability to grow which makes it a good investment choice.