Three Conditions for a Potential Entry to Meet to Become a Strong Competitive Force: Examples and Observations
Creating a strategy that will help survive in the environment of the global economy is a challenge that modern organizations need to complete to attract customers and become profitable. Although there is no recipe for success and each case of building a business company is unique, there are several essential principles that an organization must follow to become a competitive force in the context of the global market. Particularly, the identification and the further development of a unique competitive advantage, the creation of a strong and efficient risk management approach, and the introduction of a cost-efficient strategy of resources management must be viewed as the building blocks for success.
We will write a custom Critical Writing on Conditions for Becoming a Strong Competitive Force specifically for you
301 certified writers online
The issue of risk management should, perhaps, be the focus of a company’s endeavors when entering the target market. In light of the increasingly high competition rates and the strong effect that numerous negative factors have on SMEs in the global economy, one must elaborate on the means of mitigating the existing risks. For instance, the financial liabilities must be managed successfully, which means that an organization might need the support of a partner. Furthermore, the risks related to the technological aspects of the production and the communication processes need to be mentioned. The lack of certainty about the time and money required to address the problems identified above is typically the greatest concern of SMEs entering the target environment (Thompson, Strickland, & Gamble, 2015). Therefore, a risk mitigation approach must be crafted before becoming a part of the global market.
As stressed above, the financial obstacles are among the primary concerns that a company is likely to face when attempting at becoming a part of a specific market, let alone the global one. Therefore, a cost-efficient strategy that will help allocate the available resources most efficiently needs to be considered. For example, Tesla, which produces electric vehicles, often mentions that the use of a cost-efficient approach allows it to maintain a strong position in the EV market despite the increasingly high competition rates: “They are also trying to reduce costs by eliminating the middle man — the car dealers — but this has met with fierce political opposition in some states” (Kam, 2014, para. 12). As a result, the price for the end product can be reduced, which makes the company a better choice compared to other organizations offering the same product.
Finally, the significance of a unique competitive advantage must be mentioned as the area that a company must concentrate on to gain a strong position in the target environment. As soon as a firm introduces the type of services or products that no other organization can offer to the target members of the population, the chances for the company to gain success rise. For example, the high quality of the product and the reward cards offered to the clients are used actively by Starbucks, therefore, making it easily recognizable and preferable to other organizations producing coffee (Sustained competitive advantage of Starbucks, 2013).
Creating premises for SMEs to evolve in the context of the global economy are not very numerous – typically, they include creating a competitive advantage, working on a cost-efficient strategy, and addressing risks successfully. As long as a firm designs the approaches that help it navigate the realm of the target market, it is likely to take its niche in the industry rather fast. Although unique characteristics of entrepreneurship are to be taken into account as well, the three concepts listed above can be viewed as the basis for operating in the target environment.
Kam, K. (2014). Why Tesla is the Apple of the auto industry: Part one. Forbes. Web.
Sustained competitive advantage of Starbucks. (2013). Web.
Thompson, A., Strickland, A. J., & Gamble, J. (2015). Crafting and executing strategy: Concepts and readings (20th ed.). New York, NY: McGraw-Hill Education.