Strategic management significant for each and every business unit to sustain in the competitive market. It is related to the strategies and plans which can provide competitive advantage for an organization over it rival firms. This report is based on Stylerunner which is a e-commerce platform operate their business operation in Australia (Freeman, 2010). It provides a wide range of products to its customers. The purpose of this report is that the significant of strategic management practices in small and new businesses which can help to gain the competitive superiority.
Industry attractiveness is one of the important factor which influence new businesses in to the market. There are various reason which can influence an organization like good market opportunities, attractive potential profit and long term growth in the market (Hill, Jones and Schilling, 2014). Today e-commerce platform business are growing day by day due to internet connectivity and increasing the internet users. Stylerunner requires that to conduct a careful analyses of competitive forces which can affects the business in Australia. Porter's five force model can help to identify and analyses the market effective which can help to make their long term strategies accordingly. There are given below of competitive force for the industry:
Bargaining power of suppliers: It is one of the important force can identify and analyses the bargaining power of suppliers (Herman, 2011). If the number of suppliers are limited it can increase the bargaining power of suppliers which is not good for a small company. On the other hand there are large number of suppliers it can help to provide the product at the lower rate.
Bargaining power of buyers: There are large number of e-commerce companies which can increase the competition in the market. It can also increase the bargaining power of customers because, they can buy products which are available at the lower price and better quality as compare to others (Li and et. al., 2006).
Threats of new entry: There is no barriers on the entry in the market. It can make the market more complex and competitive. This industry is growing day by day which can attract more and more companies in the industry. If Stylerunner requires to compete in the market, they can provide high quality at the lower prices as compare to others. It can give the competitive advantage to the firm.
Rivalry among existing firms: There are various other firms which are already in the market. They have more experience and expertise in this industry. Additionally, they also have large capital which are not good for a small business unit (Oke, 2007).
Threats of substitute products: It is another factors which can affects the business operations and profitability of the company. For example if the company can sell products of a particular brand, on the other hand the same products is selling in the market offline. It can heart the growth of the new firms.
Resource based views is a approach which can help to the organization which can their available resources more effectively and efficiently. It can differentiate a firm form other business unit. In this approach the higher authorities of the firm can analyses the internal environment and use their resources more effective (Lenny Koh and et. al., 2007).
Resources of the firm are very valuable for Stylerunner. It can involves assets, skills, information, capabilities, organizational culture, organizational process, business attributes, knowledge. It can help to provide the products and services to its customers in a satisfactory manner. All resources are not equally valuable for the company. All resources can not give the strategies advantage to the firm. Only few resources can make the business unit different form their rival companies (Chien and Shih, 2007). For the company there are following attributes which can provide the strategic superiority are given below:
Valuable: In this category those resources which can provide the competitive advantage to the company. In can involves firms knowledge and products quality which can be valuable for the firm.
Rare: In this category those resources which can be unique form other firms and can give strategic advantage for the business unit.
Inimitable: Resources can be sources of sustained competitive advantage if competing firms cannot obtain them.
Non-substitutable:In this category resources which can not be able to equal with the valuable resources can be called non-substitutable.
Core competency is a uniqueness which can be technology, skills, capabilities, information, knowledge for a business entity (Montabon, Sroufe and Narasimhan, 2007). It can create a different value for its customers. For Stylerunner core competencies can be provide on time deliver of their products, quick replacement, provide high quality products to its customer etc. These core competencies can help to the firm to make the value of its brand in the market. These capabilities can also help which can give the competitive advantage for the firm. If the firm provide high quality products to its customer, it can leads to increase the customer loyalty. Therefore, company are requires to create their core competencies which can help to create and develop a valuable online platform in Australia (Wook Kim, 2006).
A competitive advantage is makes the firms better in a competitive market. It is a superiority which can differentiate the organization's products and services in terms of quality and lower price as compare to its rival firms. These attributes can give the company competitive advantage. Stylerunner requires that to gain competitive superiority form following approaches:
Cost Advantage: It is one of the important approach which can help to the company to develop a competitive advantage for the firm. If a business unit can provide the products at the lower price as compare to other firms. It can help to increase the sales and output of the company. It can leads to increase the profitability generation (Nair, 2006). Corporation requires to contact those suppliers which can provide goods at the lower price. Additionally, they can use effective approach like optimum utilization of their resources and make their logistics system more cost effective. It can help to create and build the competitive advantage.
Differentiation: It is another weapon which can be used by the business units to gain the competitive advantage. In order to make their product more unique, firms can try to create a uniqueness in their products and services as compare to its rival business unit. In order to provide differentiate products and services to its customer, they can make their products technologically advanced, brand name, different attributes, and high quality. It can help to increase the wide market share and profitability (Freeman, 2010). The small business unit can make their products highly qualitative which can help to build customer loyalty. The firm can also use premium products for their customers which can help to increase the market value and goodwill in the market. Stylerunner manager requires to try to make their brand valuable and more superior. It can help to build market competitiveness and provide strategic advantage to its customers.
Value Creation: These all attributes can help to the company to create and build the value for their customers as well as the organization. Manager of the business unit requires to focus on the making a effective activities like on time delivery, fast replacement and a sound after sale service can help to support the value chain of the firm (Hill, Jones and Schilling, 2014). The firm can more focus on the maintain the long term relationship with their vendors. These vendors can make fast supply of goods in the peak time.
It is important for a new business unit that they can make a long term plan and strategies which can help to grow their business. The higher authorities can more focus on the customer services. A customer centric approach can be useful for the company to sustain in the competitive market (Herman, 2011). They can concentrate on their transportation and logistics system. It can help to support their business activities in order to provide fast deliver of goods form vendor to the customer. Another important task which are related to the after sale services. Because there are various issues which can create a serious problem for a new business. If the company can resolve customer issues in a effective manner, it can help to help to make customer satisfaction level. A satisfied customer also can repurchase the firms goods and services. These issues can be replacement of existing products, repair of the existing products, repayment issues etc. (Li and et. al., 2006). These all problems can be solved quickly by the business entity. It can help to give the strategies advantage to the firm over its competitors.
As per the given report is has been concluded that strategic management helps to a new business unit to sustain in the complex and competitive business environment. A competitive advantages like cost advantage and differentiation advantage can help to the firm more competitive in the market. Additionally, it also explained the resources, core competencies and other attributes of the company, which can provide a long term growth and strategic advantage.