Introduction
In today’s competitive business arena, companies must boost their competitive advantage through various concepts and strategies. The paper shall look at how this can be done through the value chain concept, employee motivation and through diversification.
Employee motivation can be defined as a process by which behavior and purpose is accorded to employees psychologically. There are various theories that explain how motivation works. In the need hierarchy theory put forward by Maslow, there are two categories of needs that can either lead to satisfaction and dissatisfaction; the latter are caused by lack of extrinsic and hygiene factors like job security and pay while the former are caused by intrinsic and motivating factors such as recognition and achievement. In the equity theory, employees are motivated to perform when they feel their rewards are equal to those of their counterparts.
On the other hand, the reinforcement theory puts forward the assertion that staff members are likely to repeat actions that brought them positive outcomes and avoid those ones that yielded negative ones. Therefore, managers ought to strive to reinforce desired behavior by enacting positive outcomes. Lastly, in the expectancy theory, employees are motivated by positive rewards than negative ones. (Smith, 1994)
Given the various types of theories on employee motivation, managers must decide on which theory will work for them. Irrespective of the kind of theory chosen, researches have shown that employees are highly motivated by the nature of work. In other words, they are driven by interesting work. Therefore, job enrichment, job enlargement, promotions and training can be very effective ways of making jobs interesting. Also, it has been shown that pay is another key motivator. In this regard, employers should strive to boost both monetary and non monetary compensations. They can also provide either external or internal stipends.
Value chain concept
The value chain concept refers to a link of activities that are essential in adding value to any business product. These activities are ranked in order of priority; some fall under the primary category while others belong to the support category. All activities carried out during production i.e. inbound logistics, those carried out when assessing product demand i.e. sales and marketing, those ones carried out for maintenance i.e. services and outbound logistics are all primary activities. On the other hand, support activities include technology, procurement, human resource management and infrastructure management. (Buford, 2000)
The value chain concept is essential in strategy planning as managers have now embraced the possibilities that can come with it. One way in which this can be achieved is by ensuring that different aspects of value added in the production process are captured. For instance, managers can look for creative ways of reducing costs. For example, one can decide to make one’s manufacturing units closer to one’s suppliers so as to reduce transport costs and hence add value to service, maintenance and even outbound logistics.
Another strategy that managers can employ in their business processes is to adopt various value chain concept frameworks. These are reference models that assist companies in the process of making their value chain activities more effective. For example, business owners can adopt a Design chain reference framework that can go a long way in making developmental processes more reliable and successful.
Diversification
Diversification is a marketing strategy in which companies seek to boost their sales volumes hence their profits through formation of new markets and creation of new products. It should be noted that diversification is not just for the entire organization; it can also be carried on a smaller scale where it can be restricted to a certain business unit. There are two major reasons that can prompt managers to opt for diversification. The first is in order to embrace more opportunities and the second is to protect oneself from an overly concentrated market.
Business owners have a series of strategy alternatives that can be used to diversify their considerations. For instance, they can adopt horizontal diversification. Here, new products that are unrelated to existing ones are added into the product base. However, those products must be able to appeal to a similar market base. The major advantage of such a strategy is that marketing efforts need not be engineered. On the other hand it causes rigidity. (Day, 1993)
Companies have the alternative of adopting a concentric diversification strategy. In doing this, they can introduce a product that is technologically related to their already existing lines; however, the product must appeal to different markets. This normally works if managers look for new ways of marketing those new additions.
Lastly, businesses can opt for conglomerate diversification. In this strategy, companies decide to introduce new products or services that are not in any way related to their core products both technologically and in terms of its markets. This can go a long way in making a company’s market base, returns and hence profitability much larger. However, the major problem with this strategy is that it is a very risky as companies are literally venturing into unknown waters.
Conclusion
Employee motivation can be implemented through various theories, however researches show that pay and job enrichment are key activities that need to be considered by managers. The value chain concept can be configured to maximize value through reengineering different activities. Diversification strategies can be adopted in different ways but each strategy largely depends on a company’s ability/ interest to embrace risk, change technology and change its market tactics.
References
Smith, G. (1994). Motivation. New York: Free press.
Buford, J. (2000). “Management and extension.” Extension journal, 30(1), 22.
Day, G. (1993). Strategic market planning. NY: Wiley and sons publishers.