Introduction
There is a major difference between having adequate resources for business operations and achieving the objectives of investment. Most organizations fail to meet their targets even though they have the resources required to do so.
This paper analyzes a case study about execution strategies employed by different companies, how these plans can be applied in the hospitality industry and the contribution of the article to the development of strategic management theory.
Definition
Execution in business means to put something into practice and ensure it helps people and organizations to achieve their goals. This means that this process involves the transfer of ideas from papers to the ground and making use of the available resources to generate profits. A strategy refers to the way plans are executed in an operation to achieve the overall or long term objectives of an organization.
The Central Theme and Its Importance
This article emphasizes the importance of effective execution strategies that help companies to achieve their objectives. Mauro F. Gullen and Esteban Garcia-Canal argue that skilled labor, huge capital and a rich history are not adequate to guarantee success in organizations.
They compare the performance of companies in developing countries with those in developed nations and claim that the former have higher and better chances of improving their performance and controlling huge markets compared to their counterparts.
The authors claim that emerging-market multinationals do not pay attention to where they will be in the next 50 years, but concentrate on the current needs of their consumers. This enables them to supply goods and services that satisfy clients and ensure their daily activities continue without interference.
They claim that leaders of companies located in emerging markets spend less time thinking and planning about the future of their investments (Gullen and Garcia-Canal 104). They focus their attention, resources and abilities on executing their plans and no time is wasted in meetings or endless researches that do not offer applicable solutions to their challenges.
Their counterparts in developed nations spend considerable time conducting research, sitting in boardrooms, planning long-term moves and making forecasts (Gullen and Garcia-Canal 104).
This enables companies in emerging markets to expand their operations and invest in regions that are feared by established multinationals. For instance, the world’s largest bakery company (Bimbo) expanded its operations in America by focusing on optimal efficiency in oven utilization and delivery routes and this enabled it to generate massive profits and acquire companies like Sara Lee and Weston Foods (Gullen and Garcia-Canal 104).
In addition, these authors argue that emerging-market multinationals are impatient to expand their operations to other nations. These companies have limited capital, poor technology and unskilled labor; therefore, they struggle to remain relevant in their country and use their domestic strategies to plunge into international markets without delays (Gullen and Garcia-Canal 105).
They specialize in doing less with more and this allows them to explore international markets without fearing the risk of making losses. The Indian-based Ocimum Biosolutions that offers telecommunication services was established by a couple as a family business. Anuradha Acharya and Subash Lingareddy managed to expand this company even though they had limited capital and employed unskilled workers.
They identified poor infrastructure as an opportunity to invest in the bioinformatics industry. Their company is now an emerging-market multinational investment with various branches in America, Germany and the Netherlands.
These authors believe that emerging-market multinationals embrace chaos and are not afraid of investing in countries that face civil conflicts (Gullen and Garcia-Canal 106). They do not fear making losses because the hardships they experience in their countries strengthen their attitudes towards seeking new markets despite the prevailing conditions.
A good example is the Cairo-based construction company called Orascom that was nationalized by the Egyptian government in 1971.
Its founder (Onsi Sawiris) was never afraid of political turbulence and diversified the operations of his company by venturing into new markets in Jordan (1999), Zimbabwe (2000), Yemen (2000), Pakistan (2000), Algeria (2001), Tunisia (2002), Iraq (2003), Bangladesh (2004), North Korea (2008), Burundi (2008), Central African Republic (2008) and Namibia and Lebanon (2009) (Gullen and Garcia-Canal 106).
Most established multinational companies cannot risk investing in politically unstable countries, but their counterparts thrive in these regions without fearing the risks involved.
Application in the Hospitality Industry
The hospitality industry is growing very first due to modernization that has forced people to adopt new lifestyles. Therefore, the demand for ready goods and services has increased and diversified the operations of the hospitality industry and this has led to the need to develop effective execution strategies to satisfy the needs of consumers, make profits and control local and international markets (Fujii 42).
This industry can apply the information offered by the article to improve its performance in the following ways. First, they should avoid wasting a lot of time in boardroom meetings and conducting research to establish the best ways of implementing their plans. They should focus on short-term achievable plans that do not cost their companies time and resources. This should be done depending on the immediate needs of consumers.
The targeted population should be real and not based on approximations to minimize wastage. This industry produces perishable goods and should adopt practices that will ensure consumers get fresh products (Fujii 69).
In addition, they should not focus on long-term plans because consumer goods are perishable and people keep changing their tastes and preferences. This will help these companies to produce goods that are relevant, cheap and readily available to consumers.
Investors in this sector should pay attention to the need to supply their products and services to consumers when there is demand for them. They should not wait for too long before investing in global operations. The hospitality industry targets both local and foreign consumers and this means that the market for its products and services should be diversified.
McDonald’s took more than 50 years before going global and this means that it wasted time on local markets (Gullen and Garcia-Canal 105). Companies in the hospitality industry should consider using cheap and readily available labor to reduce their operation costs even if they will have to train some workers.
All businesses face risks and even the safest industry has serious threats that may shut its operations within seconds. The hospitality industry will never run out of clients if the current trends are anything to follow. This means that the demand for food and accommodation services will keep rising because globalization will never end.
Companies that invest in this sector should take risks and explore markets that are feared by their established counterparts (Fujii 71). It is necessary to explain that the services of this industry are needed in all regions regardless of their political situations. The prices of their goods and services will be higher because they will dominate markets located in risky areas.
Article’s Contribution to the Development of Strategic Management Theory
Michael Porter explains that businesses must create an exceptional and valuable position, align company policies and choose what not to do to ensure they execute their strategic plans effectively (Fujii 72).
This article supports the claims of strategic management theories that investors must identify gaps in markets and use their resources to fill them. Multinational companies may have massive capital and skilled workers, but this does not guarantee them success (Fujii 76).
Therefore, this article stresses the need to identify opportunities and use the available resources to execute strategic plans to ensure organizations expand their operations and generate profits. Secondly, this theory emphasizes the importance of grabbing opportunities without wasting time in boardroom discussions. Fast food restaurants like Wimpy, Wendy’s and Taco Bell were established after McDonald’s, but are now competing with it because they do not waste time before implementing their plans.
In addition, they do not have numerous long-term strategies like McDonald’s. Therefore, this article proves the need for companies to have short-term plans and embrace opportunities without wasting a lot of time (Fujii 89). Lastly, the paper explains the importance of taking risks in business activities and explains how various companies managed to expand their operations in countries that were facing political instability.
The information offered strengthens the assertion of strategic management theories that risk takers have higher chances of succeeding because they monopolize business operations. Risky investments do not attract people and thus the few that are ready and willing to explore their opportunities enjoy the advantages of monopoly in various operations.
Conclusion
Gullen and Garcia-Canal argue that an effective execution strategy enables investors to manage time properly and grasp opportunities without considering their limitations.
In addition, they claim that investors should focus on executing their plans by identifying gaps in markets and working hard to fill them with cheap products or services. Lastly, they believe that this plan should involve taking risks and exploring opportunities that do not seem conducive for business operations.
Works Cited
Fujii, Tomohisa. Business Intelligence for Strategic Management: Essentials of Strategic Management Theory (Strategic Management Series). New York: Tom Publishing, 2014. Print.
Gullen. Mauro F. and Esteban Garcia-Canal. Execution Strategy: How Emerging-Market Multinationals Thrive Amid Turbulence. Boston: Harvard Business Review, 2012. Print.