Is discrimination ever tolerable? When should discrimination become a human rights issue?
If one had to explain what exactly discrimination is, in the context of mutual human relations, one could simply say that it is an action in which an individual is treated unfairly in comparison with another person, under similar circumstances. But the issue is far more complex than could be expressed so briefly as there are many forms of discrimination, both direct and indirect. While defining discrimination in plain and simple language would not be possible, it can be stated that discrimination becomes noticeable only when a person is unjustifiably excluded from an activity or expelled completely from a group of people; and after it becomes noticeable it also becomes a human rights issue and needs to be dealt with seriously.
While unfairly treating a person or group of people differently from other people or groups of people can be termed as discriminatory and illegal, it certainly does not mean that discrimination is always unlawful. Two common examples of justified discrimination are affirmative action and varying height requirements for men and women who wish to be part of the Police Force. This kind of discrimination is, in fact, aimed at ironing out the existing inequalities. Affirmative action is used to give opportunities to already underrepresented groups. Similarly, having different height requirements for men and women means women are given an equal chance to be part of the Police Force.
There are instances where discrimination becomes absolutely essential and if not practiced there is a serious risk of causing harm to one or more persons. One would not expect a blind person or a person with limited vision to be issued with a driver’s license. The act of discriminating against him in this case, is crucial in ensuring his own safety and the safety of people on the road. In other words, discrimination against people with some kind of physical or mental disability becomes vital when it means putting them in life endangering situations. Similarly, one would not hire a person with learning disabilities to teach school children. One needs someone who can effectively teach the students and that would be impossible in this case. Discrimination in cases where a person is considered to be unqualified for a particular job should not actually be regarded as discrimination at all. If a person is not qualified for a particular profession or job, there might be many other opportunities that fit perfectly with their skills and expertise.
Discrimination in Society
Instances of justifiable gender discrimination can be seen in society and are definitely not considered to be wrong. A woman is treated with love and affection by her boyfriend. He would not do the same with one of his male friends, (if he’s heterosexual) and this is not discriminatory at all. Justifiably, a man with a terminal disease would either be unable to get health insurance or get it at a very high rate. A person who gets pulled over for driving drunk a couple of times, may get his license revoked and this is definitely rational discrimination.
The only negative side to defending certain forms of discrimination is that sometimes the line between the benefits and harms of discrimination is somewhat distorted. What seems right at the time from every logical angle may eventually turn out to be discriminatory in the future. In many ancient societies women were rarely allowed outside the house; they were considered to be weak and mentally less capable and therefore, not fit to do things other than household chores. At that time this was considered to be the norm but today it comes under gender-based discrimination. The only rational way to decide on an issue like this is to consider whether the particular discrimination has more benefits or harms and to decide accordingly.
Generally, discrimination becomes illegal when it is carried out in respect of a person (persons) belonging to a specific social group. If one doesn’t hire a mentally challenged person for a teaching job that would not be discrimination but if one excludes him simply because he is Asian, it definitely comes under discrimination. If this happens in rare instances, the said individual could always find a job elsewhere but if it becomes a general practice in society, whereby the person is unable to find a job anywhere, it is social discrimination. This means a personal dislike for a certain social group cannot always be fought against; every human being has the right to have likes and dislikes. However, if this dislike is so widespread in society that it affects a person’s right to a normal life, it is clearly discrimination.
Even in cases where the intention was not to discriminate, if the final outcome is the exclusion of a particular group and unequal opportunities for them, it will still be called discrimination. For example, if there is the same height requirement for men and women who wish to enter the army, this would mean fewer women would get in. If this gender inequality is present in other parts of society as well, then it means fewer employment opportunities for women and therefore, it is definitely discriminatory even if the intent was not there.
There are certain factors that are uncontrollable and therefore, being discriminated against on account of these factors is completely unjustified and unlawful. For example, one has no control over the color of one’s skin or one’s country of origin. Discrimination based on these factors, is thus all the more unfair.
There are five main factors which are used to discriminate against individuals. Discrimination against people from a particular race or a certain ethnic background is the most common one. Treating a person unfairly because of his/her sexual preferences is another. Using a person’s religion or belief system against him in a way where he is denied equal opportunities and is unable to profess his beliefs is also wrong. Age-based discrimination, whether it is because the person is too young or too old is still unjust. The last is unfavorable treatment of people with disabilities, both in employment and in general dealing.
Most countries in the world have some form of legislation to deal with cases of discrimination. The people of New Zealand, for example are protected against discrimination in a number of different areas in accordance with the Human Rights Act 1993 and with United Nations conventions. Similarly, the Employment and Industrial Relations Act (2002) completely prohibits discrimination in the workplace. Federal law prohibits discrimination based on (but not limited to) race, sex, religion, disability or age and yet it is only the state of Michigan and 6 other cities that have actually imposed a ban on discriminating against hiring people who are overweight. It is understandable if obese persons are unable to perform their duties but to overlook them simply because they don’t look good is completely unwarranted. The Citizens Medical Center in Texas only hires people with a body mass index less than 35. They claim that the intent is to hire people who appear normal and therefore do not attract attention to themselves. The policy clearly goes against the federal law on discrimination. Certain companies refrain from hiring smokers which is justifiable considering the side effects of the habit and the consequent higher health insurance premiums for such people. However, any form of physical appearance, which does not hinder the person from performing his work efficiently, cannot be used to discriminate against him. Appearance discrimination indicates intolerance towards the physical appearance of people which is completely and totally unjustified.
There are several courses of action that can be taken by a person who is being discriminated against. Going to court is one option but before going to the court one can also file a complaint with one of the several government bodies. These include the Industrial Tribunal (under the Employment and Industrial Relations Act, 2002), the National Commission for Persons with Disability (under the Equal Opportunities (Persons with Disability) Act) , the National Commission for the Promotion of Equality for Men and Women (under the Equality for Men and Women Act), the Public Service Commission (under the constitution of Malta), the Ombudsman (under the Ombudsman Act), the Broadcasting Authority (under the Constitution of Malta), and the Employment Commission (under the Constitution of Malta) .
In order for the authorities to take action, the complaint must be made by the victim himself. Legal Notice 461 0f 2004 and Legal Notice 85 of 2007 however, allows people or organizations with a legitimate interest in the case, to support the individual in judicial or administrative procedures, with his permission. By law, the National Commission for Persons with Disability has the power to assist such people. The assistance could be of a financial or legal nature or it could simply be help in writing the complaint. The Commissioner for the Promotion of Equality is empowered under Article 11 of the Equal Treatment of Persons Order, to investigate the matter and to take necessary steps if the complainant needs help in formulating the complaint itself.
Under the Employment and Industrial Relations Act, if there is a case where an employee has been dismissed without due cause or if there is any other violation under Title 1 of this Act, the matter will be transferred to the Industrial Tribunal for a decision, following a referral made by the complainant or someone acting on his behalf.
To conclude it needs to be emphasized that the defining factors in the act of discrimination change with time. What we consider a normal act today, might become discriminatory in the not-too-distant future. However, discriminatory actions against certain individuals or a particular group have far-reaching consequences and therefore cannot be taken lightly. Steps have to be taken to regulate society through effective legislation and through regulatory bodies that can take action against individuals or parties that are guilty of such discrimination.
Sony is a multinational corporation comprising of other corporations engaged in different businesses that fall under one corporate structure. According to Cooper and Glazer (2010) it involves a parent company and subsidiaries, the parent company in this case was started in Konan, Minato, Tokyo, Japan, it’s considered to the largest media conglomerate with revenues estimated to be more than $ 267.1 in 2011 fiscal year. The company’s business corporation include Sony corporations (electronics), Sony financial services, Sony pictures (movies& music) and Sony computer entertainment. Sony also produces communication items and video games for it customers and professional market (Byars 1991). This report is written on Corporate Strategy Sony Corporation.
To create exciting new digital entertainment experiences for consumers by bringing together cutting-edge products with latest generation content and services.
To develop a wide range of innovative products and multimedia services that challenge the way consumer’s access and enjoy digital entertainment. The level of saturation within the electronics industry is placing huge difficulties and pressures on Sony in achieving long term competitive advantage. However, The Sony Corporation appears to be striving, achieving record growth to the point where analysts have said it could become the world’s largest electronics industry with time. The purpose of this paper is to understand what origins have driven the success of the Sony organisation. Incorporated within this document: first the paper delves into a brief history of Sony Corporation and then into the description and application of strategic analytical tools. Finally it will provide conclusion to the findings.
Background to Sony Corporation
Sony Company was started by two electrical engineers geniuses Masaru Ibuka and Akio Morita in Japan the year 1946.they were concerned with what the company was to make and how it would be made (McCurry 2008). Their advice was used in production of transistors which they pioneered in its invention. Sony research and development is different from those of other companies with its great flexibility in its essence. Sony is still a Japanese company traditionally. Employment is lifetime with strategy creating values being observed strongly through employee actions. Instead of fringe benefits and bonuses for superior achievements, employees are given status through awards (crystal award). There is also the strong seniority system such as the mentor and apprentice relationship that’s typical of Japanese firm. Strategy formation is considered a collective behaviour.
Competitive advantage is a description of how an organization is able to achieve success over her competitors. This strategy aims at giving customers quality services unlike the ones offered by the competitors that enable the given organization to earn a high average return in terms of profits (Byars 1991). The competitive strategy should be in line with the organization’s goals and a true reflection of the market where the given organization is situated. It is defined as “delivering superior value to customers and in doing so earning an above average return for the company and its stakeholders”. Potters (1998) states ‘Competitive advantage is achieved whenever you do something better than the competition’ (Capron & Glazer 1987). Porter goes on to suggest in his work that competitive advantage “grows out of the value a firm is able to create for its buyers that exceeds the firms cost of creating it”. (Kotler 1998). Competitive advantage should support organisational strategy and reflect key market capabilities
This is the internal organization of the business and how it operates including the factors that affect its smooth operation (Kotler & Schlesinger 1991). Sony being the world largest electronic manufacture since 1946 it engages in research and development for it to maintain its leading position in the market. Sony global (2010) states that the electronic business sector is currently Sony’s cash cow representing 65% of the total revenues. In this segment, two products are vital: TVs (25% of the electronics revenues) and digital and video cameras (21% of the revenue). According to Data monitor, the global consumer electronics market grew by 4% in 2008 to reach a value of $267.2 billion. In 2013, the global consumer electronics market is forecast to have a value of $306.1 billion; therefore research on this area will be pivotal in market share command. This business sector employs world class marketing tactics and skills thus making Sony an international mega brand. At this stage to answer what make the electronics sector such a successful world class business unit in the selected market of China we will look at:
Accounting ratio analysis
Accounting ration analysis is the ratio that is mostly used to evaluate the relationships that exist among the financial statement items. These ratios are used to come up with the trends within a given period of time for a given company and to compare the performance of two or more companies. With theses ratios one would be able to know the success of an organization. Financial statement analysis looks into the liquidity of a business, the profitability, and its solvency (Capron & Glazer 1987).
In the year 2011 Sony electronics operating profit margin accounting ratio in China market was 0.018 (0.045 in the year 2010), return to shareholder equity was 0.006 (0.007 in 2010) while total asset return was 0.002(0.002 in 2010).the high investment rate does not correspond to the business sectors profitability. These poor results show that aspects of the electronic sector had not been managed well in China thus making it hard to achieve average even returns.
Financial resources are concerned with the operations of an organization that make it realize the profits and its strategic goals (Johnson & Scholes 1993). Sony electronic net sales in China for 2011were $21 billion (3% higher than in 2010).however $0.49 billion earned in 2011 as operating income represents a 40% decrease compared to 2010.this is an indication that Sony electronics in China has been eroded significantly.
Organization design and structure
Organizational structure is a form of management in an organization that aims at bringing together the people in the given organization, information and technology. This integration is aimed at making the organization achieve its goals. Through the designing process, most organizations are able to work towards the profitability of the organization. Nevertheless, the design process is an internal change with the facilitation of an external person (Johnson & Scholes 1993). The management and the employees need to work together to understand the organization’s needs and creating systems to meet those needs in the most effective manner.
With immense and increasing growth in China, Sony electronics employed the Strategic Business Unit way of the multi-division structure to institutionalize and implement its diversification structure. The electronic sector is divided into four SBU (cameras & camcorders, TV, Stereos &radios and VCR & DVD) which are further divided into smaller functional units known as divisions. This functional division are sub related yet different in commonality. This SBU financial and strategic controlled are exercised at the headquarters of Sony electronics in China.
Physical resources are skills such as in the buildings, technology, and other skills that enable the organization’s work to be simple (Cooper 2000). Sony electronics despite its infrastructure in china it still continues to invest heavily in the same infrastructure so as to meet its ever growing customer needs and demand in china. Like in 2009 Sony electronics acquired Chinese based companies Xing Electricals and Guangzhou Electricals Appliances Company in 2010.by 2011 Sony electronics owned 14 manufacturing plants in china, this was after seeing the closure of 3 in the northern part of the country.
Technological resources are the resources that use technology that is applied by an organization to ensure that the delivery of its services is effective and make it gain a competitive advantage. Sony electronic was first in areas such as camcorders, Trinitron, walkman and robot dog in china. The company is advanced technologically than its competitors in china e.g. its DVD offer high performance with new features like record and play making possible complex effects such as viewing oneself while seeing on TV from the DVD in 3 D form. Sony TV also has new features. Above this Sony electronics is capable of leveraging its competitor’s ability well and ahead to create high quality electrical appliances for china’s customer base and it market at large.
Human resource management
Human resource management is the function within the organization that is concerned with the recruitment, management and giving the directions for the employees. It moreover deals with issues such as compensation of employees, hiring, performance management, organizational development administration and training. All these functions relate to the smooth functioning of the organization in service delivery and hence need to be managed in the most efficient manner (Kolter & Schlesinger 1991).
Sony electrical china website stresses that the development and vitality of Sony employees in china drives dynamic growth for Sony electrical. At the moment Sony electrical offers training to it employees for them to be superior in quality production of electrical appliances. Curriculums tailored to local Chinese managers are being provided by Sony electrical in the china region. Sony electronics in china has the ability to identify high calibre managers to take managerial posts for the company sector in china to continue being well managed and innovative culture proliferated business sector.
For these Sony electronics employees in china are recognized and awarded for their outstanding and good performance. This makes Sony electronics human resource management in the china market capable of motivating it employees thus improving productivity of its staff.
Reputation of resources is one of the strategies in an organization. Public relations are important in the ever changing world and that the way the organization engages with the public is important. This can be through the use of social media that is finding its way into the market. Reputation resource management makes it possible that the information about an organization is accessible by the public in the most efficient manner such as the use of media and online resources (Johnson & Scholes 1993).
Sony electronics china has the reputation as the best managed company in the region. In 2011 it was proclaimed as china’s largest consumer electronic company a significant media industry player and the fast growing TV maker in china. In short Sony electrical china is one of china’s most recognizable and trusted brands.
Risk management is an important tool in the planning of most business organizations. This process reduces the occurrence of certain kinds of events that might affect the organization. This process involves identifying, assessing and giving more priorities to a variety of risks. Once the risks are known, then the risk manager has to minimize its occurrence. Depending on the type of risk identified, there are a variety of strategies to be applied. Risk standards can be developed by an organization or the organization can use the International Organization for Standardization (ISO).
The risk here includes pure risk and price risk.fpr pure risk, for Sony electronics to be successful in the China market then it must be able to take into consideration the various measures of risk management and standards. They need to purchase insurance policies to mitigate them. Price risk will be mitigated by the use of foreign exchange forward contracts and currency swap agreements.
The internal analysis of the Sony organization has been important in establishing the internal problems within the organization and trying to solve them with an intention of the smooth running of the organization.
Value Chain Analysis
Customer Value Chain Analysis is concerned with the customers and the stakeholders, taking into view their value “propositions” and their relationship to the development of the automobile industry products. Research shows that the definition of a product is vital to providing quality products for the customers. Understanding the various stakeholders involved in the product chain too is vital in the successful production of a product (McCurry 2008).
Together they form value chain analysis. Cost and assets are attached to each activity in the value chain. The cost behaviour depends on a number of causal factors known as cost drivers.
In this case Sony electronics in the china market will engage third parties in the production of complex in bound logistics. Sony electronics engaged Ziang a china company in the production of its products components so that Sony electronics will continue being a leading and challenging player in the china market. Sony electronics will have to transfer its production to china to make use of the available cheap labour cost thus making managing complex and regionally spread inbound logistics activities of Sony electrical strengths.
Sony electronics business will range in china will range to different provinces in Chinese market. Sony electronics production spreads from Europe, Asia and ameerica.teh details can be summarized as: 1) Total annual production for 2011 in electronics, 30% was sold in the Chinese market, 2) Asia excluding china and Japan was responsible for 20% of total annual production, and 3) U.S, Africa and Europe accounted for the rest. Sony electrical though will face and still faces duplication off products thus making it unable to address inter-operative linked issues which is a cause of alarm which create the company’s sector weakness.
Sony electronics in the china market will have to be well connected to the channels of distribution that every country has. Outbound logistics will have to be automated to track movements of finished electronics and the payments made for such electrical products in the Chinese markets. A prominent magazine in china reported that in the year 2011 Sony electronics were rated among the best in china and worldwide as well, and that their staffs are well equipped with the knowledge to any operation. The ability to train employees and outsource outbound logistics is Sony’s Electronics strengths.
Marketing and Sales
Sony electronics strategy for the china market is to make itself a leading provider of electronics in the region and brand itself as a manufacturer of high quality electronics which enables it to sell it products at a higher premium than its competitors. Massive marketing is done and will continue being done for these electrical products which has helped to create several successful sub brands in electronic products such as Trinitron and WEGA. This success strengthens the Sony brand. Due to sensitivity to its competitors actions and reactions the company has no qualms of incurring unwanted expenses, so by doing this it solidifies the company’s reputation and image. Sony electronics market shrewdness took the first spot on china according to Yao Xing (2011). Due to this Sony electronics marketing is a strength that’s hard to copy and of great value.
Sony electronics sector will have to establish service related activity in the Chinese market that will promote customer satisfaction which will make the customers feel that the product has met the expected required customer qualities. The support activities for Sony electrical in china will be as:
Human Resource Management
This will involve how the company will recruit, train, develop and compensate all personnel (Kotler 1998). At the moment Sony electrical offers training to it employees for them to be superior in quality production of electrical appliances. Curriculums tailored to local Chinese managers are being provided by Sony electrical in the china region. Sony electronics in china has the ability to identify high calibre managers to take managerial posts for the company sector in china to continue being well managed and innovative culture proliferated business sector. For this Sony electronics employees in china are recognized and awarded for their outstanding and good performance. This makes Sony electronics human resource management in the china market capable of motivating it employees thus improving productivity of its staff.
This will include how the company which is Sony in this case in engaged in process design ,products design and how it research and development in carried out to production of better products for the consumers. The company is advanced technologically than its competitors in china e.g. its DVD offer high performance with new features like record and play making possible complex effects such as viewing oneself while seeing on TV from the DVD in 3 D form. Sony TV also has new features. Above this Sony electronics is capable of leveraging its competitor’s ability well and ahead to create high quality electrical appliances for china’s customer base and it market at large.
Sony electrical should be keen on how purchase its raw materials that’s it should be having a strong and working procurement system for this to happen. Their suppliers should be acting and supplying the required supplies in time. Highest quality goods should be obtained here in low prices for materials necessary for the company’s operations.
This includes planning and control systems, such as finance, accounting, and corporate strategy etc. (Lynch, 2003). Sony electronics despite its infrastructure in china it still continues to invest heavily in the same infrastructure so as to meet its ever growing customer needs and demand in china. Like in 2009 Sony electronics acquired Chinese based companies Xing Electricals and Guangzhou Electricals Appliances Company in 2010.by 2011 Sony electronics owned 14 manufacturing plants in china, this was after seeing the closure of 3 in the northern part of the country.
To understand Sony electronics activities in china through which competitive advantage is created while observing and maximizing shareholder value, series of value generating activities known as value chain will divide the business system. Transforming input into output looked to have problems and required immediate response from Sony electronics to fix it. If not fixed and solve urgently they might affect the effectiveness and efficiency of operations of the primary activities of sonny electronics business sector downwardly. Though electronics has witnessed a significant increase in internal cooperation between hardware and software managers more work and effort need to be put. The nature of good and fine networking sought to become the habit of Sony electronics sector for it to enjoy a commanding competitive advantage in the Chinese market.
Summary of Sony’s Electrical Sector strength and weaknesses
Able to motivate and improve employees productivity
Positive Sony reputation contributes to increase in sales and revenues
World class marketing tool which makes Sony’s mega brands
Innovation ability which mesmerizes customers to buy them.
Ability to leverage on technology well ahead of competitors
High debt ratio put the company in danger in case debtors demand their money.
Weakness of divisional structure that include duplication of activities leading to high cost
Competing business unit engage in office politic instead strategy formulation and implementation
Resource competency use on Sony’s Electronic models primary and support activities
Bundle of Resources Available
Able to conduct complex inbound logistics for smooth organization operations
Technology, human, financial, innovation and infrastructure
Capable to innovate and build mesmerising products to customers
Technology, human, financial, innovation and infrastructure
Capable of training employees to perform vast complex outbound logistics activities
Technology, human, financial, innovation and infrastructure
Marketing and sales
World class marketing tools for making Sony mega brands
human, financial, innovation
Able to integrate various resources and functional activities to meet customer need in china
Technology, human, financial, innovation and infrastructure
Finance and infrastructure
Possess various physical resources to help create competitive advantage
human, financial, innovation and infrastructure
Provision of numerous packages and training that help motivate employees
Able to leverage on technology well and ahead of it competitors
Technology, human, financial, innovation and physical
Possess procurement know how that leads to high quality at low costs
Technology, human, financial, innovation
Environmental PESTEL Analysis
Environmental analysis is the study of the company’s competitiveness and the whole
Environment where it operates, this will have an impact on the decisions the organization makes in regard to the strategies the organization is to employ in order to achieve profits. (Kotler 1998). PESTEL is one tool used to identify primary factors for consideration in the general environment. When applying a PESTEL analysis it should be recognised that the categories are not ‘mutually exclusive’ (Byars 1991). This section will analyze the companies PESTEL and it consists of political, economic, social cultural, environmental and legal forces impacting Sony electronics in the Chinese market.
Political influence has been particularly evident in recent times. Extreme security measures have been established since rise of the terrorist threat. Government of china policies obviously are of value in running the country successful. Since Sony electronic headquarters in Minato Japan, the corporations policy differ with those in Chinese market. Here marketing strategies and decision activities are restrained and controlled by various laws and regulations established by political institutions in the People’s Republic of China. China will enact laws to preserve a competitive atmosphere or it consumers who in this case are the china people. The extent of the impacts on these laws on the marketing mix variable will depend on Sony electronics sector will interpret such provision that they might be subjected to heavy regulations.
Some political changes in china might make Sony electrical activities difficult and they may encounter political risks during their operations e.g. times of war, political unrest, terrorist activities. The concerns of Sony electronics strategist in this scenario is to understand china’s political system or policies, the government of china’s commitment to the rule of the game ,expectation of change in government and the expected change in business practices.
The economic status of any country plays a vital role to the success of the industries located in that country. These factors affect the consumers’ decision on the purchase of the products because the economy of a country includes exchange rates, inflation and the income of the individuals. Globalization led to emergence o international production markets. It also led to access of foreign goods and services; due to this the demand for products went high. Strategists at Sony electronics sector should be able to understand the economic variables present in the china market. The economic forces can affect the market either positively or negatively.
Sony electronics sector should be aware of china’s inflation rates which in 2011 was at 1.0003%.the knowledge of this would lead to strategies to counter this economic menace. Sony Electronics should know china’s level of economic condition, is it boom, recovery, recession or depression. The availability of natural resources that can be used by Sony corporation in china to aide it operations in the country. Sony corporation should also know of china business atmosphere is it friendly or otherwise.
Sony corporation should understands china’s purchasing power of the market as this will dictate the levels of income, prices, savings, debts and credit availability. By understanding china’s industrial structure of the economy Sony corporations will determine the level and distribution of income and this will in turn impact on the business organization performance. Some of the important factors to be considered by Sony electrical corporation in the Chinese market are: 1) Economic stage of china, 2) Economic structure adopted by china which in this case is Socialism, 3) Economic policies by china e.g. industrial, monitoring and physical. Nevertheless, Chinas national indices like; National income, distribution of income, rate and growth of GNP, per capita income, disposable income rate, rate of savings, and balance of payment. Infrastructural factors in china like communication, transportation and insurance facilities.
Social Cultural Factors
The socio-cultural factors include demand and the tastes of the consumers. These factors on the other hand vary depending on the fashion, the disposable income, and the general changes that provide the opportunities and threats for given companies. In several cases, products for a given industry have to change depending on the market situation and here prices and the strategies involved in promotion have to change. The society in which people live shapes up their beliefs, values and norms. People of china will absorb a world view that defines their relationship to themselves, others, to nature and to the universe at large. Sony corporation electronics sector should be aware of china’s people core beliefs and values that tend to persist. The knowledge of this factor will ease the penetration of Sony electronics into china’s market.
Technology is vital on strategic management of any company (Camp 2007). Technology creates a strategic advantage. However, other external factors such as the government support and encouragement affect the use of technology by an organization. This involves the rate and level of change which affects the people of china lifestyle. Technology is seen in electronics through camcorders, computing mobile phones.
This will influence how Sony electronics will produce its products, advertise them, personal selling, market research and pricing. The technological advancement of china will lead to how Sony electronic will invent new electrical products and new methods of production for the Chinese market in China.
The total output of Sony electronics in china market can increase through increased productivity, reduced cost and new type of products.
Sony should be aware that other Chinese companies are able to copy its technologies in a shorter period of time and sell them at throw away prices. Due to this the technological margin is diminishing and Sony corporations through it electronics sector should be cognisant with that.
Effect of Technology
This can be evidenced in the types of products made and sold by Sony electronics. Therefore technology will lead to home working in China, service manufacturing in China and database marketing through the website in China.
Sony corporation electronic sector should analyze China’s intellectual property and property right which they are capable of applying for their electronics as well commercialization. This will offer Sony in the china market a significant source of comparative merit of enterprise. The PESTEL analysis has proven to be important for the market analysis for the Sony Corporation. It has assisted in identifying vital external factors that affect the operation of the organization and its expansion.
Porter’s Five Forces Model
Porter (1998) suggests that Five forces will look at; threat of substitute products, bargaining power of suppliers, bargaining power of buyers, threat of new entrants and the intensity of rivalry in the Chinese market. From porter five forces model the competition in the electronics industry is fierce thus any company making an entry into the industry in the china market will experience difficulties in profit making. This does not imply that the company will get the same profitability result it got in the previous fiscal period; if Sony applies its business competencies well in china it will still get profits above the industry level.
Threat of substitute goods
For the china market the threat of substitute goods is high since substitutes from other industries are a lot and most of them seem to be current and innovative. Although the threat is high Sony corporations through its electronics sector has established and positioned itself by building good reputation and customer loyalty in the Chinese market. This positions Sony electronics effectively against any product from substitutes in the china market.
9.2 Bargaining power of buyer
The buyers bargaining power in china is high since they can swiftly change from one product to another. The access of interest in china has led to consumers finding information on prices charged by various manufacturers thus making the change form one from one manufacturer to another who offers cheaper prices for the same goods as those offered by Sony electrical. Bargaining power in the Chinese market has also increased due to online shopping.
Bargaining power of suppliers
Supplier bargaining power in china is lower due to the fact that a large number of suppliers and customers exist. Sony electronics operate in global chains thus making its supplies less concentrated and above all they are small in size thus commanding a weak supplier bargaining power in china. Due to its direct negotiations with its suppliers they normally cheaper prices though reliable.
Threat of new entrants
The threat of new entrants in the china market is too low due to the fact that they will incur high costs, economies of scale, product differentiation as well as high technology and innovation knowledge. This market in china is regulated by requiring every new entrant to have approval from the relevant authorities being eligible to operate.
Competitive rivalry in china as a market is high due to intense competition and high exit cost. This rivalry characterized by numerous and equally balanced competition in china due to high research and development, fixed and storage costs, intensity of competition in this market is further heightened by slow growth in the industry.
Porter’s five analyses has been used by Sony Corporation to gain a clear understanding of the market and enable the organization build a competitive advantage over her rivals in the industry.
Competition represent a major determinant of corporate success and if Sony corporation through its electronic sector fails to take detailed consideration of competitors strength and weaknesses in the Chinese market may lead to poor performance and greater exposure to competitive disadvantage which may lead to make Sony a follower instead of a leader in that market. Cooper and Glazer ( 2006, P.10-21). In this case Sony Corporation should:
Identify its competitors in the Chinese market.
Who they are and how many. This will enable Sony to understand competitors’ moves and monitor them easily and appropriately prepare a marketing defence. The danger though is from emerging competitors and their numbers. In china Sony electronic competitors include; Philips, Toshiba, sharp, Samsung, LG, Kodak & Fuji, Matsushita.
What are the competitors’ goals and objective?
This involves determining the competitors’ goal and objectives. Sony should try to answer what each competitor is seeking in the Chinese market and what drives the competitors aim in the market. Sony should also know how a competitor weighs each objective as this can help them know how they are likely to react to different types of attack.
What are the competitors’ strategies?
Sony should try to identify competitors’ strategy amongst those competitors within the same market with the same strategy.
What are the competitors’ strength and weaknesses?
Sony electronics sector in the Chinese market should try t identify competitors strength and weaknesses by gathering information on each competitive business. The information will help Sony Corporation on who to attack and how to attack.
What’s the competitors’ reaction and response towards competition?
Sony predicts this about its Chinese competitors from the competitors’ philosophy of doing business. Sony here will need a deep understanding of the competitors’ mind set so as to anticipate their likely reactions. Strategies that can be adopted by Sony electrical in the Chinese market are;
Sony can try to control the Chinese market by being the low cost producer. For this strategy the product is typically undifferentiated. In case of discounts in this stage they shouldn’t be too high so as to offset cost advantages.
In this strategy Sony Corporation will offer products regarded as unique in areas which are high valued by customers. The product uniqueness will protect Sony from competition. However the price premium received should not outweigh the cost of providing differentiated product for this strategy to be successful.
Sony can use this strategy whereby it either uses cost or differentiation but rather than serving the entire Chinese market it decides to operate in particular attractive segments of that same market.
For Sony electronics to continue enjoying the leader position in the Chinese market it should reduce the cost of its products to increase profit margins. They should also create project based work teams that report to top management, this will reduce office politics and encourage strategic thinking. The employees in the sector should improve interaction and communication, by this team spirit will be high. Sony should incorporate customer oriented features; this will make customers feel they they’re part of the company thus increase customer loyalty. Sony should maintain it leader position in the Chinese market as this will make it outshine it competitors in the market. They should also encourage dreams as this will inspire employees to strive and achieve their dreams thus leading to innovations. Above all Sony should work with the people’s republic of china government.
The Chinese market is a harbour with many business potentials, if Sony Corporation through it electronic sector focus on it seriously it will reap hugely. This is so since Sony is considered as a market leader in the region with strong financial resources, obsession with innovation culture visionary leadership and the pioneer advantage. It should continue marketing it products to stay in touch with its Chinese customer (McCurry 2008). Clearly, despite the increased competition in this industry, Sony Corporation has succeeded in becoming one of the world’s most successful operators. It has recorded highest levels of growth. In contradiction to Porters belief that an industry’s structural characteristics determine the attractiveness and profitability of a market or industry Sony Corporation has excelled. Clearly, the factors that have contributed to the success of this organization come for three distinct areas: financial backing and investment into rapid growth and capital, holistic corporate dedication to its vision of quality and customer service, and vast Branding coverage of noteworthy promotional medium.
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Discuss the purpose of corporate communication strategies
Corporate communication is the overall effort of an organization to communicate effectively and profitably. For the achievement of set goals of an organization, it depends largely on character and organization’s relationship with its stakeholders such as community, employees, clients and suppliers. Thus, it is a strategic tool for an organisation to have competitive advantage over its competitors. It is used to motivate, inform employees, lead and persuade the clients. Corporate communication strategies should be aligned according to different organisation members who may not necessarily be having the same interests. Below are the purposes of corporate communication strategies. Public information: here communication is described as dissemination of information through the media such as bronchus and newsletters. Two ways symmetric: here is a dialog rather than a monolog, communication efforts are seen in terms of its research based and the use of communication in enhancing understanding with stakeholders. Press a gentry: it tries to gain coverage from mass media. Here information is given and no more information is collected from the stakeholders.
Assess how corporate communications link to corporate objectives
Significant relationship between corporate objectives and corporate communication is evident. The top management should ensure that the corporate objectives are clearly communicated to the lower management through the middle. Lack of effective communication may lead to poor or no strategy implementation. Percentage growth, market share in the market, future revenue targets as well as creating more values for stakeholders are examples of corporate objectives, which helps in running of the organization. This makes the organisation have a strong link between the corporate objectives and the corporate communication.
Analyze the relationship between corporate communication and corporate branding
There is a great relationship between the corporate communication and corporate branding. Corporate branding is the symbol used by corporate to identify itself to its audiences or clients. Corporate branding is important as it helps in creating awareness and act as a reminder of the existence of an organization. It is through effective communication in an organization that will enhance corporate branding. In addition to corporate branding, we need to consider the corporate image, which is the perceived sum of organization such as plans and objectives. It includes management style, services, products and communication activities.
Demonstrate how you would plan an internal corporate communication audits
A communication audit is an indicator of a corporate current communication practices and their effectives. A communication audit can cover internal and external communication as separate or both depending on the desired outcome and the objectives of the corporate. An audit points out problems such as information blocks, information duplication and misunderstanding. When planning for a communication audits, formal and informal strategies should be used. For instance use of surveys which is a form of quantities research, use of interviews (qualitative research), analysis and reports and action planning. A communication audit is important in that it helps in highlighting current practices as well as possible lacking elements in an organization.
Explain how you would conduct an internal corporate communications audits
Here we have to consider various steps in corporate communication auditing. Determining key areas to audited. By considering both the internal and the external communications; consider everything from your standard branding pieces such as logos and business cards.
Choose research method. When conduction a corporate communication audits you have to select from a variety of research methods such as online survey, interviews and focus groups. This helps in collecting relevant information.
Collect and evaluate your past communications. Here you have to consider all the types of communications and information passed from the management to the middle and lower management. You need to ask questions like; who were our key audiences? Key messages? Did we reach our clients with the correct information? This helps you in knowing where to start with your corporate communication audits.
Look outward. This is where you focus on the customers and your community. Use questions to analyze your communication from your community and customers point of view. Try to find out what is their perception about your organization.
Look inward. Staffs and volunteers are the most important consideration in this stage. You need to collect their views about your organization’s communication. Ask, what are your reactions of communications during the past year? What could be improved? Did internal documents serve your needs? This helps you to have an overview of what is required of you, Put together a plan for future communications. You need to use your research as the starting point for making a corporate communication audit for your organization.
Critically evaluate the effectiveness of the current levels of practice in your organisation
In evaluating the level of effectiveness, you need to consider the commitment of the organisation. In terms of commitment, the organisation should be effective in that it ensures that all the objectives of organization are achieved through proper communication.
Another effective practice is the human resource. Through effective communication in the organization, various functions such as section, recruitment, in-services training are taken care off. Administration and finance control. In the running of the organization through effective communication of the set objectives, the management is in a position to control how the finances are used.
Explain how you would conduct an external corporate communication audits
An external communication audit is an indicator of current communication practices in an organization. It gives an organization’s information to the external stakeholders such as the local community, the government, the media, clients and suppliers. When planning for an external corporate communication audits you should consider various factors such as the target audiences. This will help in knowing the type of information you are going to pass from your organization to the target audience, thus enhancing the effectiveness of communication.
Demonstrate how you would conduct an external corporate communication audits
When conducting an external corporate communication audits, you have in use things like signage, posters, newspapers, voice messages and bronchus. The following steps are used in achieving it.
Understanding strategic communication practices. This helps in measuring your communication efforts. You need to ask questions that will help you determine strategic communication practices such as what is your communication vision. In addition, how does it relate to your organization’s mission? Are your communication goals well defined and measurable?
Identify the level of practice. There are various levels of practice such as institutional practices that are routine and improved over a time, Optimized practices are continuously evaluated and improved over a considerable period with sufficient resources.
Access the current performance. Here you need to know the levels of your organization performances through interviewing your audiences, use of focus groups. This helps in understanding where to start and what information to change about your organization.
Identify the areas for improvement. Getting feedback from your audiences, you now have an idea of where to change or improve in the organization. This enhances how communication has been done in the organisation. Here you need to ensure that media coverage is taken care off to pass the relevant information to the target audiences. After all this is done, you need to plan for future communication. This increases the effectiveness of your organization.
Critically evaluates the effectiveness of the current levels of practice in your organisation
As a result of effective communication in the organization there is a great change in practices such as community relation. This is as a result of corporate communication branding and imaging in the organization which helps the organization to change a lot. Through enhancement of communication with the local community; the organization has known the tastes and preferences of the community. Program management is another sector that is effective. Due to communication done with various departments in the organization, programs are run effectively thus enhancing the relationship
Financial management: It is through effective communication in the organization that budget administration is taken care of by knowing what the target audiences need you are in a position to budget well.
Demonstrate how you would plan the development of a corporate communication strategy
Having in mind what you need to achieve, you need to know what your communication plans are by asking yourself the following questions; do you want to improve your organization reputation? Do you want to generate more online or offline news coverage? You just need to lay down your organization objectives. The objectives need to be SMART: specific, measureable, achievable, realistic and time.
In planning your strategy, you need to define how you will achieve you objectives. Your strategy should include a profile start such as; do you want to generate maximum or minimum coverage? By having this in mind you are in a position to have an effective corporate communication strategy in your organization.
Selecting the audiences to influence with a corporate strategy
When selecting audiences to influence your corporate communication strategy you need to consider both the internal and external audiences in your organization. First consider how employees who are the internal audiences influence your communication strategy. What information about your organization do you want to pass to your employees? Consider the external audiences such as the media, suppliers’, clients and how they influence your communication strategy. The information about your organization passed to the audiences should be clear information in order to protect the image of your organization. Both the internal and external audiences influence your communication strategy as you need to know how to deal with them.
Plan appropriate measures to monitor a planned corporate communication strategy
Participatory monitoring and evaluation covers any process that allows all stakeholders – particularly the target audience – to take part in the design of a Project, its ongoing assessment and the response to findings. It gives stakeholders the chance to help define a programme’s key messages, set success indicators, and provides them with tools to measure success. They include problem ranking, surveys and mapping. This helps in monitoring your communication strategy.
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The changing social and the economic terms have led to the rise of the idea of the corporate citizenship to be adopted by the well-known corporate brands across the globe. The corporate citizenship definition states the social and the economic responsibilities that are taken by the corporate organizations across the globe for improving the social and economic lives of their stakeholders and the society as a whole, slowness or damage to their growth both in terms of economy and reputation. It has been introduced with an ideology of improving the quality of living but at times it is seen that the corporates tend to maintain the same only over the papers while the reality speaks of some other truth, as well.
Qualities of Good Corporate Citizenship
The corporate establishments should not try to fool the customers and should provide them with the correct and accurate data about their products and facilities. They should not induce unfair means to reap more profit from their products and should comply with their social responsibilities.
They should donate to the social causes and should also try to organize cultural activities so as to improve the society as a whole.
The corporate organizations should try to donate their services and products to the needy and the deprived so that they can contribute to the social uplift. There are often many orphanages and the old age homes that are in need of proper funding that are at times becomes impossible for them to manage and often at the disposal of corporate funding. This will not only do value addition to the society but will also reflect their social attributes.
The corporates should not tend to deviate away from the promised quantity of the products and can even misguide the customers for their own marginal profits and which might hurt the customer sentiments towards the company, as well. Most of the consumers agree that while achieving business target, companies should do CSR at the same time (Epstein-Reeves, 2010).
Deviations from the Idea of Corporate Citizenship
They sometimes compromise with the quality and quantity of the products. Often they tend to provide their products to the customers with a reduced rate so as to keep at per with other rival market competitors. In this rat race, they often tend to compromise with the quality of their products, as well. This not only can impact the customer faith in their products but if found to be falsified can even lead to severe consequences and can draw severe penalizations, as well.
They at times exploit the customer sentiments and fool them with fake promises, as well. The at times comes up with schemes like promising of free assured prizes or coupons which in reality might not match with the promised items, as well. An environmental management system has a part in creating the image of a good corporate citizen (Sonja Petrovic-Lazarevic, 2010).
The organizations at times axe the jobs of certain employees from their organization in the process they call as cost cutting not being considered as a step to reduce their losses but often related to the cause of increasing company profits and maintaining their growth. This in turn increases the unemployment factors.
Experts believe that the corporate entities with higher profit margins which tend to deviate them from the moral and social outlook which should be prohibited by the.
All companies should pursue the governance structure that ensures the social values of the organization are aligned with those of the community; overall unique stakeholders’ understanding of a healthy working environment should support sustainability; equal implementation of occupational, health and safety regulations for each state ( Sonja Petrovic-Lazarevic,2010).
Environmental hazards and issues are growing at an alarming rate on a daily basis due to the growing human activities that tend towards bending the delicate balance of nature. There are many factors that have led to the contribution of the environmental hazards but of them there are few for which concerns have been raised by the experts. We have tried to include some of them in this report and have tried to make a comparative analysis of the same for addressing such problems.
The four major environmental issues
Pollution: The growing problem of pollution is very disturbing in maintaining the proper ecological balance. Pollution in all the forms of air, water and land are becoming very problematic to handle each day. The non-availability of the waste lands and even the filling up off the wetlands for the different purposes are affecting the bio-diversity and are creating more biohazards. Pollution by air is becoming very difficult to control due to the emission of many unwanted and even poisonous gases by the various factories from the various industries like manufacturing and power. Even the water pollution has contributed much due to the dumping of the regular household and the daily waste in the mainstream rivers and oceans have made the problem of pollution very critical. “These undemocratic maneuvers do an end run around state legislators and should trouble advocates of open government.”(Organization Trends, April, 2008)
Non-biodegradable items: The uses of non-biodegradable items have been much of concern recently. Materials like plastic is considered to be nonbiodegradable and even the degradation rate are very high if considered to other similar items. The chemical combination of the compound makes it be very light weight and very easily available. Thus, plastic items are used for carrying out daily and regular tasks and also used in various sectors as often they are easily available and are pretty less priced compared to its other substitutes and counterparts. It comparatively reduces the price of the items, as well.
Global Warming: The global warming has much contributed to the hazard to the environment. Scientists and the experts have concluded that due to the rise in the carbon dioxide level in the atmosphere, the depletion of the ozone layers in the upper atmospheres have resulted in the much depletion of the ozone layer. Sources of ground level ozone include; vehicles, factories, industrial solvents, gas stations, and farm equipment, to name a few. (EPA, 1992). Photographs and herbarium specimens as tools to document phonological changes in response to global warming. (Miller-Rushing, Primack, Primack, & Mukunda, 2006).
Toxic materials: The use of toxic materials that are produced as by products from the various industries are causing many damage to the environment leading to drastic climatic changes as the acid rain and others and even leading to many unknown diseases, as well.
Addressing the issues
Use of renewable source of energy: More and more use of the renewable source of energy like the solar panels is used in now day’s vehicles that ensure zero pollution. Though the technology is at nascent stage but still evolving. Use of recycling and waste management techniques are introduced for reducing land and water pollution as well.
Use of degradable items replacing the non-degradable items: Use of other cheap fabrics and degradable materials like jute and other organic synthetic materials have been introduces to tackle the problem. Though much progress is needed to replace their use in the other sectors like automobile with efficiency.
Plant more trees and reduce the carbon footprint: More plants should be planted as they are the only living elements capable of releasing oxygen by taking in carbon dioxide through the process of photosynthesis. College officials agree to cut greenhouse gases. (2007, June 13).
Proper care should be taken by every participant in the society to curb the growing problem of the environment issues so as to keep the proper environmental balance.
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Employing Competitive Priorities in Business: The Case of FedEx
The courier industry is one of the most integral parts in the American economy. It is involved in the transportation of a variety of products like drugs, packages, bulk materials and documents to businesses within USA and outside its borders without which the whole economy would come to a standstill. The same day delivery service is also a vital part of the just in time nature of the economy of the US. This multi billion industry has more than seven thousand businesses in it in direct competition with the big four courier firms, (DHL, UPS, FedEx and USPS) and with each other.
In the recent past, competition between FedEx and UPS, two of the largest courier a company, has intensified as their core business increasingly overlap. UPS traditionally dominated the overnight delivery market while FedEx dominated ground delivery. With each moving to its rival opponent’s domain, the need to create competitive priories is even stronger because this is the only way for the companies to retain their businesses and deliver value to their shareholders. FedEx’ relies on technology to drive its competitive strategies and maintain their business operations. FedEx business model is highly dependent on data between the businesses and its customers. FedEx thus invests more than $1 billion each year to maintain its technology and building a wireless infrastructure to relay timely information on possible problems in the delivery route, enhance efficiency and cut business costs. I will use FedEx as a study case to analyse how a business can gain competitive advantage using competitive priorities.
FedEx Corporation, NYSE:FDX is a Memphis based logistics services company which offers courier services, logistics solutions. FedEx is one of the largest logistics companies in the world delivering small packages to the US and to more than 220 companies in the world. FDX Corporation was founded in 1998 after, FedEx Corporation, which had been incorporated the previous year acquired Caliber systems Inc and its subsidiaries like RPS, a small package ground transportation company, Roberts Express which offered expedited shipping, Viking Freight, a less than truck load freight courier and Caliber Technology, provider of logistics and technology solutions (FedEx, 2012).
After this acquisition, FDX started offering other courier services apart from express shipping. FDX, later rebranded as FedEx Corporation was formed to oversee the operation of all the acquired subsidiaries including Federal express, its air division. It also rebranded the subsidiaries to have the FedEx brand in all divisions with federal express being renamed FedEx Express, RPS renamed FedEx ground, and Roberts Express renamed FedEx Custom critical, Caliber Logistics and technology were combined to make up FedEx Global Logistics.
In 2012, the company’s annual revenue was 40 billion which a 13% increase from the revenues was for the previous year. The earnings per share on the other hand for 2011 grew 20%. In the same year, the company increased its fleet of electric and hybrid electric vehicles by 20% to 408 to curb air pollution (FedEx, 2012).
During the first quarter of 2010, the company spent an estimated %4.9 million in campaigns lobbying against the government’s move to sign the Federal Aviation Administration reauthorisation bill which would make it easier for some of its employees to unionise terming it a bailout on UPS, FedEx’s main competitor in the US market (FedEx, 2012). To survive in these kinds of competitive markets, companies have to adopt strategies to survive. Managers can only take advantage of the changes in the wider environment by using appropriate strategies. Effective strategies allow the firms to use their resources for the best outcomes. The next part of the paper looks at what strategy is.
What is Strategy?
Strategy is an outline of how an organisation intends to achieve its goals. The goals of an organisation are the objectives the owners set for the business while the strategy sets out the route to achieve these objectives. In the early years of the businesses, the strategy taken by the business is fairly simple: to survive and achieve growth targets. However, as the firm increases in size, it must select narrower set of strategies referred to as competitive strategies to survive in the face of strong competitors. According to Porter (1996), competitive strategy is about being different. It refers to choosing a different set of activities to deliver the company’s mix of value to the customers. Markides (1999) argues that the essence of developing a strategy for the organisation is to select one strategic position that a company can claim as its own and pursue it. A strategic position represents a company’s answer to the following three questions: who should the company target as its customer? What products/services should the company offer to the target customers? And, how can the company deliver these products efficiently? These three questions help a company to choose a success strategy that is different from that of its competitors (Henry, 2008).
Another view of strategy is that given by Kay (1993). According to Kay (1993), strategy is a match between the organisation’s internal capabilities and the relationship with stakeholders. Strategy is therefore concerned with the firm’s use of analytical techniques to understand and hence influence its position in the market.
Since the environment within which the company operates is constantly changing and the needs of its customers shifting, a company must ensure that its internal resources and capabilities are more than sufficient to meet these needs since companies do not exist to survive but to grow and prosper in the competitive environment (Henry, 2008).
An effective strategy gives a firm three benefits. The first benefit is a strategy as a source of economic gains. Secondly, it provides the firm with a basis for resource allocation. And thirdly, guides the firm’s decisions regarding management and organisation. One main strategy that companies use is the development of consistent set of objectives which are known as Competitive priorities. These priorities are: Cost, Quality, Time and Flexibility.
The first competitive priority that a company can choose is cost leadership. This is a strategy whereby the cost of a given product in a company is relatively low compared to that of competing products from other companies. This strategy does not jeopardize the quality of products. It rather focuses on high profit margin based on competitive price (Chard, Jacobs and Aquilas, 2004, p.35). In order to ensure effectiveness of cost as a competitive priority, companies operations should be guided by economies of scale. They should also minimise all other operational costs, which include cost of labour and materials. The employees should also be well trained so as to maximise their productivity.
The second priority is quality. Customers always intend to purchase products which they consider being of high quality. For this reason, companies should ensure that they avail high quality goods and services to customers. Care should be taken in pursuing quality as a competitive priority because there are differences in what customers term as high quality. For instance, there are customers who search for products that possess superior features.
There are two dimensions of quality; namely, high performance design and goods and services consistency (Chard, Jacobs and Aquilas, 2004, p.35). High quality design involves the production of goods which address the quality demands of the customers. On the other hand, consistency involves building confidence among clients by ensuring availability of goods and services upon demand.
The third competitive advantage is differentiation as regards to time in delivery speed and reliability. As much as a company pursues production of high quality products, production should not take too long. This is because delays in production and delivery upset customers. Chard, Jacobs and Aquilas (2004) outlined two dimensions of effective delivery. These are rapid delivery and on- time delivery. Rapid delivery involves quick reception of customers’ orders while delivery on- time involves high frequency of on-time delivery of goods and services. In order to utilize time as a competitive priority, companies should make use of technology and employ effective work force.
Therefore, in the process of delivery, companies should ensure that deliveries are “in accordance with the promises made to customers”. This is referred to as dependability (Hayes and Wheelwright, 1984, p. 24).
The fourth priority is flexibility of product mix and adaptation to changing markets. Competition always leads to change of products in the market by different companies. Therefore, as the market changes and customers’ needs and expectations shift, the company should device ways of accommodating these changes. This should be geared towards winning the confident of customers. Chard, Jacobs and Aquilas (2004) categorises flexibility into product and volume flexibility (p. 36). Product flexibility is the ability of the company to offer goods and service that suits the customers’ needs. With this, a product may be dropped out or introduced to the market depending on the market trend. Volume flexibility is the strategy of increasing or decreasing the production of a given product in order to accommodate changes in its demand.
Hayes and Wheelwright (1984) expound aspects of flexibility as the ability to change volume of production, time taken to produce, mix of different products or services produced. Flexibility also involves the ability to innovate and introduce new products and services (p.24).
Flexibility enhances healthy competition as competition is not based on speed of production but customized products. In addition, it helps to reduce competition based on cost. This is so because production of customized products may require extra resources for production. Companies which employ this strategy ensure that its products are varied, and its workers are skilled and competent enough.
Scholars hold divergent views regarding the criteria for utilization of the four competitive priorities. For instance, Hayes and Wheelwright (1984) companies cannot simultaneously succeed when they pursue all the priorities simultaneously. This is because there is the likelihood that such companies have to allow different operators to implement priorities at different times. The resultant lack of coordination leads to inability to achieve objects. The two, therefore, advocate for trade-offs whereby companies pursue one competitive priority to greater levels than the other priorities. On the other hand, there are other scholars who argue that companies can still succeed while pursue the four competitive priorities simultaneously (p. 25). In the next part of the paper, an analysis of FedEx competitive priorities will be done.
FedEx Competitive Priorities
The environment in which FedEx operates is quickly changing due to the financial crisis and globalisation which has resulted into an increase in the number of competitors in the courier business. During the crisis, the quantity of global trade was severely affected which in turn affected the revenues of logistics companies, including FedEx. Although the financial position of the company for last year looked promising, the future is too vague to predict for FedEx. This means that the company must look for ways to strengthen its position in the market. One of the ways that company can do this is by exploiting competitive priorities (Porter, 1998).
The main competitive priority for FedEx is time. In the same day delivery business, delivery on schedule is a vital component in winning customers trust. According to Chase, Jacobs, et al 2006, a company can differentiate itself using time as its competitive priority in two ways: First, is through speed delivery speed and secondary through reliability and ability to deliver the goods when promised. Some of the packages that FedEx is in charge of delivering like medical supplies are extremely time sensitive and hence the businesses is always on the lookout for ways to reduce delays in the supply chain to ensure that packages arrive on time. One of the ways that FedEx achieves this is by controlling every part of the delivery chain. The company owns aircrafts, delivery vans and sorting facilities to ensure reliable on time delivery.
As early as 1980 during the initial years of the company, FedEx had a fully integrated system to monitor the location of vans, track packages and communicate with customers to ensure that all packages were picked and delivered on time. In the last few years, the company has been replacing the old wireless system with Wi-Fi, Bluetooth and cellular networks, GPS which enables customers to track their packages in real time using their WAP enabled phones and PDAs. In addition to this, the company has over the years build a seamless international and domestic network linked by air and ground delivery channels which ensures that customers needs are well met (Berger, 2011).
The second competitive priority for the company is flexibility. According to Chase, Jacobs, et al 2006, flexibility involves the ability to provide a wide range of products or services without delay to meet the needs of the client. The company has always been a leader in adaptation of new technology to better meet the expectations of its clients. For instance, the company was the first to start offering delivery at 10.30 am after identifying a need within the market to have their goods delivered early so that they have enough time during the day to work on them. The company also formed a strategic alliance with U.S. Postal Service to offer its customers more flexibility in drop-off points for their parcels (Porter, 1998).
The third competitive strategy that FedEx pursue is cost leadership. According to Porter (1998), cost leadership is concerned with producing high volumes of standardised products to take advantage of economies of scale. FedEx offers its customers a range of flat rate fees and delivery options to ensure that all customers well satisfied. To reduce costs, FedEx uses technology to gather data and through outsourcing some of its operations such as delivery.
The fourth competitive strategy for FedEx is quality. According to Porter (1998), quality is concerned with excellence in operations, product based quality and value based quality where the organisation offers excellence at an acceptable price. To maintain quality, FedEx trains all its employees the importance of correcting a mistake before it goes further on since the mistake becomes more costly to fix once it is allowed to go on. For instance, sorting goods before shipping helps the company avoid wrong shipping. The company also maintains its quality by offering timely delivery which has earned it more satisfaction among its customers than its rival UPS. Quality at FedEx is also maintained by the use of information technology, such as Wi-Fi and iPhone apps, at every point of its delivery channel which enables the company to gain important information about picking up its customers’ parcels and relying information to the customers about where the package is at every step of delivery. The use of technology helps to communicate with the customers in case of delays to maintain their loyalty.
In conclusion, a company should seek to exploit its competitive priorities to ensure survival in times of competition. Competition is normal in every industry and so is the case in US courier industry in which FedEx operates. In the recent years, intense competition over the US market has increased for FedEx both from its main rival UPS and also smaller courier companies which fill the gaps that larger courier companies like UPS, FedEx and DHL are unable to fill due to their large size. In such competitive markets, a company has to come up with a strategy not only to survive but grow in the face of competition. Formation of a competitive strategy involves matching the internal capabilities of the firm with needs of its stakeholders to tap into the changing needs of the market. One of the best strategies that a firm can use is called competitive priority.
Competitive priorities that affirm can utilise to gain competitive advantage are cost leadership, flexibility, quality of products and timely delivery. The first competitive priority, cost leadership, is concerned with producing a high volume of standardised products to gain economies of scale. FedEx offers to its customers a wide range of services at acceptable prices due to its large market size which has enabled the company from a distribution network in the US and other countries which allows it to pick and deliver parcels more conveniently and cheaply. It has also reduced its operating cost by use of technology to gather data which is vital in logistics.
The second competitive priority that a firm can utilise is quality. This is concerned with a company attaining excellence in its products and offering these products at a competitive price. One of the ways that FedEx maintains its quality is through the use of IT to ensure that its customer’s packages are delivered on time. Timely delivery is enhanced by its already established efficient delivery channel which allows it to collect and deliver packages as per customer’s demands. The other competitive priority a firm can pursue to gain a competitive advantage is flexibility in the mix of products and in offering new products. FedEx achieves this by observing the changes in demands for customers to offer new services like late night delivery and linking up with online sellers, like Amazon, to provide online shoppers with convenient transport of their shopping. The last competitive priority is timely delivery and reliability which FedEx does by ensuring that customers receive all their packages in time by integrating IT in their delivery system to rely information about possible delays to help take corrective action and help customers track their packages to avoid uncertainty.
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