CARVE Electronics’ Co., Ltd. branch in Zhoukou City, Henan Province is a company that specializes in manufacturing various electronic commodities. Despite the promising prospects throughout the first years of operation, the branch has been experiencing a significant decrease in sales volumes. According to the research, this has happened due to the lack of innovation and ineffective approaches employed by the company management, which has resulted in a communicational gap between leadership and staff. Thus, the faced issues have pushed the company management to seek ways of boosting organizational performance. Bolman and Deal (2008) stated that “investing in people on the premise that a highly motivated and skilled workforce is a powerful competitive advantage” (p. 138). It means that the company needs to increase the efficiency of the workforce through a particular emphasis on its core competencies and intense collaboration of leadership and the staff. Apart from that, the innovative approaches to leadership and enhanced collaboration with the workforce, as well as among units, will allow the enterprise to gain a greater market share.
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Carve Electronics has lost its competitive advantage because its products and services have become outdated and they no longer outplay the options offered by the rivals in the industry. Also, company management cannot coordinate and execute effective decision-making due to poor communication with the staff (Jason and David, personal communication, February 18, 2017). These factors have adversely affected the company performance, employee morale, and organizational culture. Therefore, the enterprise needs to reconsider its mission and goals, consider innovative approaches to leadership, and ensure the joint work of management with the skillful employees to become competitive again.
To gather, compile, and analyze the information, the qualitative study method was used. In particular, to be able to collect information and data from primary sources, several different interviews have been conducted. A specific type of interview was conducted for the company management. A series of open-ended questions were offered to the leadership including such general questions as “What has been the major challenge faced by the company during the last few years?” and “Has there been any particular difficulty faced by the company leadership in collaborating with the workforce?”. These queries have allowed the research team to pinpoint the repetitive patterns in the answers of managers. To collect the information from the staff, a survey has been conducted. The survey was quantitative in nature to determine the statistical associations between the answers of employees. Despite the fact that, in general, the research was qualitative in character, the quantitative research results have enabled expanding the information and justifying the findings.
To gather insights into the theory, secondary sources have been consulted. In particular, academic resources such as books on the research topic, peer-reviewed articles, and course materials have been reviewed. In addition, the company’s website has been consulted to research the essential information on company history and some specific issues relevant to the current study.
To verify the results, the data were obtained from multiple interviewees. This rule was applied to both the company management and the employees. Apart from that, the articles and publications from reliable sources have been considered to either invalidate or verify the statements made by the interviewees (Creswell & Poth, 2017). The available information about the company’s competitors has also been researched to compare the information about these companies available on the Internet with the actual setting revealed by Carve management.
Importantly, the research has particular limitations. The study covers and analyzes the self-reported data. Since the gathered information could not be verified independently, it is reasonable to state that the interview results have to be accepted at face value (Creswell & Poth, 2017). Nevertheless, due to the nature of this research, the gathered and reported information has no sources of bias; therefore, no further limitations should be stated.
It should be stressed that various concepts, domains, and approaches have been used for framing the analysis. Various market strategies have been studied to compare those with the method employed by Carve Electronics at present. Apart from that, multiple approaches to leadership have been investigated due to the need for the company to consider a new strategy of managing people. Moreover, Porter’s five forces concept has been studied throughout the course, and its application to the current case was reasonable since it allowed suggesting to the company a particular way to regain a competitive edge.
The interview results and the theoretical analysis of the concepts have revealed that Carve Electronics has several areas for improvement. First, the enterprise has to outline its performance with the current industry requirements. At present, the company manufactures and distributes outdated products that no longer satisfy customer needs and requirements (Jason and David, personal communication, February 18, 2017). Second, management strategies employed by the leadership result in poor communication with the staff and a collaboration gap between the leadership and the workforce. Third, the company is advised to focus on new energy development, which is a prerequisite for successful operation in the electronics industry in the country.
According to the analysis of Porter’s five forces and the current operations within the enterprise, it has been determined that one force should be stressed to gain a competitive advantage successfully. This strategy will ensure that the company places emphasis upon the factor, which can influence the most and outlines it with its core competence. As stated by Porter (2008), this approach will enable the company “to reduce the share of profits leaking to other players” (p. 1). It is suggested that the company should improve its organizational performance through improved market strategy and the application of transformational leadership to managing people. When the work processes are updated, the leadership will be able to orient the workforce correctly and will be flexible in managing units. Thus, by employing a new market strategy, a particular focus on energy development, and a new approach to leadership, the company will be able to regain its competitive edge.
The analysis of Porter’s five forces has revealed that in terms of the electronics industry, the threat of new entrants and bargaining power of suppliers is rather low due to governmental policies, commodity diversification, and the scale of business. However, the bargaining power of buyers is rather high. This type of power has forced manufacturers to produce products of higher quality but at lower prices (Porter, 2008). In terms of the substitute products, this force is rather low as well, but the number of substitutes from other industries is growing. Nevertheless, rivalry within the industry is high. There are numerous competitors, which results in a shorter life cycle of commodities.
To change the current strategy, it is advisable that Carve Electronics reconsiders its opportunities regarding the bargaining power of buyers, which can be done through enhancing customer loyalty. According to Hill and Jones (2012), “it is possible for a company, through its choice of strategy, to alter the strength of one or more of the five forces to its advantage” (p. 57). The enterprise should consider increasing the perceived value of commodities and introduce innovative features using new energy sources. Apart from that, the usage of new energy sources will allow the company to add operational efficiencies. Becoming an innovator in the industry, the company will be able to determine the vacant opportunities and employ these strategies earlier than the rivals. Another benefit of this course of action is that Carve will be able to reinforce its strategic position by defining the innovative technology and applying it the first.
Another course of action that the company could employ is the transformational approach to leadership. The core of transformational leadership lies in the fact that management should focus on the vision of the company rather than on specific tasks. As stated by Northouse (2010), this approach “involves an exceptional form of influence that moves followers to accomplish more than what is usually expected of them” (p. 161). The leader creates the image of the future goal and inspires the team to achieve it through specific actions. The plan of action in terms of implementing this approach is as follows:
- Management should use an individual approach to people’s development. (The leader should have a particular interest in the progressing of employees and their individual interests. After becoming aware of the characteristics of each employee, it will be necessary to provide them with tasks that will develop their expertise and professional skills.)
- The second step is intellectual stimulation. (It is crucial to encourage employees to work autonomously and seek new approaches to solving current problems.)
- The next strategy is the employment of inspirational motivation. (It is necessary to reveal clearly to each employee the realistic vision of the company. It is significant to limit the ways of solving problems to specific actions and motivate coworkers to put additional efforts to achieve organizational goals.)
- Another aspect is an idealized influence based on a leader’s charisma. (The management should be a role model and evolve constantly. By creating a vision, setting goals, and showing flexibility, the leader should put corporate goals prior to personal ones and attain full respect from the side employees).
Following the proposed course of action, the company will be able to boost the potential of every employee and maximize the contribution made by the leadership. This strategy is aimed at empowering the workforce and stimulating the communication between the management and the staff. However, most importantly, it will ensure that the workforce becomes the company’s competitive advantage.
Applications and Reflections
The potential benefit of the results can be reflected in the fact that that the company will be able to use the proposed management principles to reduce the collaboration gap between the management and employees. In addition, the company will be able to manage its workforce more effectively when achieving corporate goals while making maximum use of their potential. Based on the proposed strategies, the organization will be able to develop its personalized plan to improve the key performance indicators. In general, the data and conclusions from the study can be used in the future not only by Carve Electronics but also by educational institutions in discussions of case studies. Thus, the key stakeholder, which is Carve Electronics, society, and educational institutions could benefit from using the current report.
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Bolman, L. G., & Deal, T. E. (2008). Reframing organizations: Artistry, choice, and leadership (4th ed.). San Francisco, CA: Jossey-Bass.
Creswell, J., & Poth, C. (2017). Qualitative inquiry and research design (4th ed.). Thousand Oaks, CA: SAGE.
Hill, C., & Jones, G. (2012). Essentials of strategic management (3rd ed.). Boston, MA: Cengage.
Northouse, P. (2010). Leadership (5th ed.). Thousand oaks, CA: SAGE.
Porter, M. (2008). The five competitive forces that shape strategy. Harvard Business Review, 1-18.