Strategy
In their operation, firms in different economic sectors have to deal with two main levels of strategic issues. These include the corporate and business strategy of the firm. According to Grant (2005, p.22), a firm’s corporate strategy gives a clear definition of its scope of operation within a specific industry or market.
On the other hand, business strategy gives a clear indication of how the firm intends to compete in the market. Grant (2005, p.22) asserts that a firm’s strategy is aimed at ensuring that a firm survives in the long term. Therefore, it has to develop a high competitive advantage.
In its operation, Palm Inc has formulated an effective corporate strategy which is aimed at ensuring that the firm becomes a global leader in mobile device industry (Rubinstein & Jeffries, 2009, p. 3). In order to achieve this, the firm emphasizes on smartphones as its key product.
Currently, there is a high probability of the market for smartphones undergoing a significant growth. This arises from the fact that there are a significant number of customers who are considering smartphones as an effective mobile device. According to Rubinstein and Jeffries (2009, p.3), a large number of customer are changing their cell-phones which are voice centric by replacing them with smartphones.
The main reason for this trend is that consumers prefer smartphones due to their characteristic of being full-featured and software driven (Rubinstein & Jeffries, 2009, p. 3). Palm Inc. intends to exploit the market opportunity. In an effort to exploit the market opportunity, Palm targets both individual and institutional customers.
Generic strategy – Differentiation strategy
According to Porter (1998, p.38), a firm’s competitive strategy entails either adopting an offensive or defensive mechanisms so as to position itself effectively in the market. There are three main generic strategies that a firm can use in order to attain competitive advantage. They entail cost leadership, differentiation as well as focus.
Differentiation strategy involves developing products and services which are characterized by unique attributes. As a result, customers consider these products to be of high value compared to competing products.
In its operation, Palm has incorporated differentiation strategy as the core generic strategy through which it can attain an effective market position. According to Rubinstein and Jeffries (2009, p.3), Palm differentiates its products via effective designing and integration of the hardware manufactured with superior software.
The core objective is to offer delightful customer experience. The firm also ensures that its products are innovative and easy to use. The resultant effect is that the firm is able to establish lasting customer experience.
Inputs
According to Carter, Clegg, and Komberger (2009, p.54), an organization’s success is enhanced by what it has and its capabilities which are considered to be inputs. According to Wyman (2005, p.5), inputs affect an organization’s success. There are three categories of inputs. These include the environment, resources and history. Wyman (2005, p. 5) all organization’s operations are affected by the larger environment.
This environment consists of legal constraints, the government and other regulatory bodies, economic forces, competitive forces, social forces, financial institutions, people and suppliers. There are three main ways through which a firm’s operation is influenced by the environment. These include;
- Imposing demand.
- Imposing constraints.
- Provision of opportunities.
The environment imposes demand through diverse customers’ products requirements and preferences. These requirements are based on various variables such as quality, quantity and price. In its operation, competition is one of the environmental factors which have influenced Palm’s operation (Yoffie & Kwak, 2001).
In order to create its competitiveness, the firm’s management team has realized the importance of ensuring that its products are of high quality. Over the years of its operation, the firm has managed to integrate quality as one of its core inputs. This is achieved through the firm’s superior software such as webOS.
This is in line with the firm’s product differentiation strategy. To effectively integrate quality in its products, the firm’s ensures that it develops skills necessary for its hardware and software (Rubinstein & Jeffries, 2009, p. 3).
In addition, the increase in customer demand with regard to mobile devices which result into higher customer experience has been motivating the firm’s efforts to produce and supply its products. The firm has witnessed increased demand from institutional clienteles whose basis of operation is Windows environment.
These customers are increasingly demanding a higher customer experience. As a result, the firm has increased its effort to deliver the experience by differentiating its Windows Mobile. This is achieved through integration of Palm shortcuts and user interfaces (Rubinstein & Jeffries, 2009, p. 4).
The legal environment is a critical consideration in the firms operation. This arises from the fact that failure to comply with the law can result into heavy financial cost. All the firm’s operations are subjected to a number of regulations such as those relating to product safety, health, environmental impacts and material usage. It is also a requirement for the firm’s products to comply with the legal requirements existing in all its markets.
According to Rubinstein and Jeffries (2009), the firm has not had material effects on the firm’s operation such as its competitiveness and capital expenditure. However, there is a high probability of the increasingly stringent standards, laws and other regulatory mechanisms affecting the firm’s ability to introduce new products in addition to cost of complying.
Resources
Organizational resources form the second component of an organization’s input. Organizational resources can be categorized into technology, employees, information and capital. According to Poser (2003, p. 16), organizational resources also include other intangible resources such as the firm’s reputation, competitors, regulators, investors and customers.
Over the years it has been in operation, Palm Inc. has managed to accumulate a substantial amount of resources. Some of the firm’s core inputs relate to financial, technological and human capital. For example, the firm has a strong research and development team which is composed of engineers in different fields.
This enables the firm to effectively design and develop unique products. In addition, other departments such as sales and marketing, manufacturing and customer service and support departments are composed of qualified personnel.
History
An organization’s current operation is significantly affected by past events. A firm’s management team must have a comprehensive understanding of all its past developments (Denton, 2002). Some of the key considerations relate to strategic decisions, values, beliefs and its ability to respond to crisis. Over the years of its operation, Palm Inc has been committed at attaining a strategic position in the market.
One of the ways through which this has been attained is through entering into strategic alliances and acquisition. For example, in 1995, the firm was acquired by Robotic Corporation which is a US firm.
This enabled the firm to be form a strong foundation within the handheld industry. Robotic was acquired by 3Com in 1997. Palm was separated from 3Com in 1999. In December 1999, Palm was reincorporated again. In 2000, Palm issued shares through an Initial Public Offering (IPO).
In December 2001, the firm established the PalmSource, which was s subsidiary of the firm. This enabled the firm to establish a strong operating system. In 2003, Palm issued all its PalmSource shares to Palm stockholders.
Palm Inc. acquired Handspring, Inc. in 2003 which resulted into the firm changing its name to palmOne, Inc. Its name was later reverted to Palm.
The firm issued redeemable preferred stocks of series B category to Elevation Partners. In 2009, the firm sold more stocks to Elevation Partners. Issuing shares has enabled the firm to establish as strong financial base thus undertaking research and development hence its effectiveness in product differentiation.
In summary, the firm has developed a strong tradition with regard to its management effectiveness. As a result, the firm has attained a high competitiveness in formulating and implementing its operational strategies. These strategies relate to entering into business partnership such as strategic alliances. As a result, the firm has been able to develop its competitiveness and market position.
From the analysis, Palm Inc. has managed to develop a number of organizational resources. For example, as a result of its strong financial stability, Palm Inc. has managed to strengthen its capital through acquisition of superior technology. In addition, the firm’s financial capital has enabled the firm to train its employees thus enhancing its human capital.
Improving the firm’s human capital contributes to a high degree of effectiveness and efficiency in the frim’s research and development capability. This further enhances the firm’s capability to design and develop high quality products and hence its competitiveness. As a result of efficiency in its product designing and development, the firm is able to meet the various legal requirements relating to its products.
Due to its strong management tradition, the firm has developed a superior working environment thus strengthening its market position. This indicates that there is a strong degree of congruence between the firm’s inputs which consist of organizational, environment factors, internal resource factors, and historical tradition and the company’s strategy.
Reference List
Carter, Clegg, S. & Komberger, M. (2009). A very short, fairly interesting and reasonably cheap book about studying strategy. Washington: Sage Publications, Ltd.
Denton, J. (2002). Organizational learning and effectiveness. New York: Rout ledge.
Grant, R. (2005). Contemporary strategic analysis. New York: Wiley-Blackwell.
Porter, M.E. (1998). Competitive strategy: techniques for analyzing industries and competitors: with a new introduction. New York: Simon and Schuster.
Poser, T. (2003). The impact of corporate venture capital. Cologne, Germany: DUV Publishers.
Rubinstein, J. & Jeffries, D. (2009). Palm Inc. Washington: United States Securities and Exchange Commission.
Wyman, O. (2005). The congruence model. Web.
Yoffie, D. & Kwak, M. (2001). Mastering strategic movement at palm. MIT Sloan Management Review. Vol. 43, issue 1, pp. 55-63.