Porter (1999) asserts that operational efficiency carried out in a particular way can achieve immeasurable success but that does not fully work in the long term. He allows that the best way to achieve organizational success is by utilizing strategic positioning. The Reconstructionist strategy that Agility DGS plans to use involves utilizing the available company’s resources to win the consumers back. Agility DGS has also thought of redefining a new strategy to aid the company to gain a successful market re-entry as well as competitive advantage. In line with this, Agility DGS plans almost change the entire business to enable the company to deal with new market conditions such as new type of consumers.
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Reconstructionist strategy: Outcomes Pros and Cons
The Reconstructionist strategy, like other business strategies come with both pros and cons when applied to specific business. Agility DGS has suffered from employee layoffs and lack of revenues and needs to utilize the Reconstructionist strategy to bounce back into the market. The company is considering re-entering the previous market in defense and governing services but in a different way. This is an advantage for the company, as it will enable it to differentiate itself from the current and potential competitors. Agility DGS outsources its services to third-party suppliers and wants to utilize its influence on its suppliers to ensure quality service to the final consumer.
The company has decided to reevaluate its relationship with suppliers and other partners through mergers and acquisitions which will enable it to get better terms. It also will offer additional superior logistical utility services to DLA at a low price. This will win back DLA’s confidence in Agility DGS as well as leveraging on the price and better competent suppliers. Additionally, bulk purchase from suppliers will enable the company to gain a competitive advantage against the competitors. However, Agility DGS may suffer in the short term in giving high quality service at low prices to DLA even though the strategy is viable in the long term.
The company has decided to keep its mission and vision in its Reconstructionist strategy. This is a bad idea as the employee are already feeling demoralized. What the company requires is formulation and implementation of a new strategic vision and mission, to show the employees that the company is committed towards success. This is supported by entry of new players in the market. By offering specialized supply chain services at reasonable prices, the Reconstructionist strategy will work to the advantage of Agility DGS by differentiating itself from competitor. However, this is subject to faster and successful imitation by competitors.
The opportunities and expectations with partner organizations will foster and strengthen the relationship through periodic evaluation of the business. This is an advantage for the company as it will be ale to anticipate future needs and thus manage future value and growth of the ventures. A comprehensive employee incentive program incorporating various motivational methods including opportunities for higher learning, training, mentorship or development will enable the company to motivate its workforce and thus more revenues. In this case, the company acknowledges that communication will be vital in encouraging employee trust and loyalty.
Re-Define a New Strategy: Outcomes Pros and Cons
In this strategy, the company figures to change the company vision and mission as well as aligning the value, profit and people proposition (redefined) strategy in consideration of the major competitive forces in the market. A new strategic vision and mission will inculcate a new sense of confidence towards achievement of company success.
The company also is switching from dealing directly with the government to dealing with private consumers. The company had suffered because a supplier was being protected by the government. Therefore, dealing in the private sector, Agility DGS will be able to tap into a market regulated by competitive market forces with minimal interference from the government. The private sector has a wider consumer base and hence more profits. However, the company will be venturing into new areas and therefore competition will have to be carefully assessed as it represents a threat to the business with regards to government regulations, customer choice and national economy trends.
Therefore, lack of evaluating the competition represents a pitfall for Agility DGS. Expected entry of new players in the market will also put pressure on costs, prices and the rate of investment necessary to compete with current competitors. However, the company does not require addition investment on capital and human assets, making it better placed to deal with new competitors. Agility DGS’s focus on low volume sale in market with higher profit margins as well as getting into mergers with current businesses will ensure it has a market niche and competitive advantage against its major competitors. Additionally, focusing on small businesses to attract consumers to company products and services, Agility DGS will ensure to minimize costs and earn more profits.
Agility DGS venture into online retailing has fewer risks in market entry in addition to utilization of a better marketing platform even though the internet platform is subject to cyber crimes such as fraud. In this strategy, the company plans to use the diversity strategy to motivate its employees. Giving jobs to minorities and minority-owned businesses will endear the company to the government and hence better support form the government in company operations. It will also encourage and attract a diverse potential workforce and hence better understanding of potential consumers. However, this strategy does not consider the demoralized current employees who need to be motivated. Therefore, this is a weak point as the current workforce will continue to be de-motivated.
Cost-Effective Analysis: Reconstructionist Strategy and Re-Defined New Strategy
This Reconstructionist strategy will allow the company to experience low costs as it requires reevaluation of the business operations and making necessary changes to return the business to profitability. Supplier and merger transactions will involve drawing mutually binding contracts where the company will utilize its current resources with only the personnel requiring extensive input. Additionally, the strategy is bound to incur lots of benefit in the long-term with minimum costs. Periodic evaluation will also enable Agility DGS to stay ahead of and different from their competitors and hence better competitive advantage and a unique market niche.
The Re-Define a New Strategy, being based on entry into new markets in the private sector which is quite competitive, will incur high costs especially in motivating and training current employees as well as training and hiring new ones for business survival in the private sector. Compared to the Reconstructionist strategy, Agility DGS will experience low benefits due to the stiff competition and difficulty in market entry into the private sector. Consequently, the business will be operating at high risks considering it will be using venturing into online retailing with more potential risks and outcomes.
Recommendations and Conclusions
As evident for the information, the Reconstructionist strategy allows greater long-term benefits with low minimum costs. The outcome will lead the company to differentiate itself from competitors and gain a unique structure based on previous experiences in the defense and government sector. On the other hand, Re-Defining a New Strategy incorporates too many unknown risks, low benefits in the long-term as well as more costs in implementing the strategy.
As Porter (1999) agrees, differentiating one’s business from the competitors forms an unbeatable strategy while incorporating operational efficiency. Therefore, I would recommend Agility DGS to adopt the Reconstructionist strategy as the company will benefit more from implementing it.
Porter, M. (1996). What is strategy? Harvard Business Review, 20(1), 61-78.