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Various Economic Strategies For Businesses Research Paper


Introduction

Strategy is defined as the trend and range of a given business in the long term. Strategy makes the business have an advantage over the others in the same market by organizing the limited resources from the environment and using them to achieve its objectives (Johnson and Scholes, 2010).

The Current Economic Conditions

In the recent years, many businesses have gone bankrupt while a good number of major financial institutions have failed. This can be attributed to an economic crisis which has been looming for the last three years. Most businesses are facing an economic crisis causing a decrease in the capital flow.

The financial crisis has been credited to an increase in lending of subprime mortgage which in turn caused a decrease in the prices of housing. This has consequently caused problems in both banking and in investment industry and is depressing economic growth in the US and the world at large.

Economic spending has hit a record low while the confidence of customers has been waning. Spending, investing, and lending between banks have also reduced drastically. The most hit sectors of economy include: the stock market, manufacturing industry, and the housing industry.

People continue loosing jobs as these sectors crumble. Future economic growth seems to have been curtailed despite numerous government interventions. Businesses are taking rapid strategic measures to save the situation. Job creation and renewed investment need restructuring (small business economic outlook, 2008).

Strategic Options

Most businesses have considered re-strategizing in order to survive the economic recession. Various strategic options are available to businesses. Strategic options are the alternative ways in which businesses respond to varying external situations. Businesses should carry out an assessment of the situation and then use the facts and threats thereof to plan in advance (MDF, n.d).

Developing Strategic Options

Various steps are employed in the development of strategic options viz.

In the first step, the organization should do an assessment of the external situation and look into what is threatening the business and whether there are any opportunities available. The organization should then arrange and group these opportunities together and do likewise to the threats.

Strategic decisions should then be made that deal with opportunities and actions taken. New solutions to the threats should be sought. In the third step, the options created are to be rated in terms of importance and finally a follow up done to gauge implementation (MDF, n.d).

Levels of Strategic Planning

Different companies employ different strategies to solve various threats and to take advantage of opportunities in the field. These strategies are broadly grouped into three (Johnson and Scholes, 2010).

Corporate Strategy that is involved with the general functions of the organization and its objectives to satisfy its customers’ needs. The corporate strategy level is of vital importance as it is decided upon by the owners. This level of strategy is concerned with defining the specific goals of the company and identifying which forms of businesses it should be involved with.

Its competitive faction is to choose the ideal localities for competition. It also manages its activities and the organization’s interaction with other businesses in that field. Staff coordination and resource allocation to different units are also done at the same level. The management of different units in the corporation also falls in this level.

Business Unit Strategy deals with the market and how a business will cope with competition. It’s about the organizations’ products and ways of controlling the markets. How the business deal with others in the same market, analyzing changes and taking alternative action to deal with adjustments is also accommodated at this level of planning (QuickMBA, 2010).

Operational Strategy deals with general organization of the business

The Coca-Cola Company

The Coca-Cola Company was started way back in 1886 at New York by an Atlanta pharmacist called John Pemberton. It is Asa G. Candler who transformed Pemberton’s invention into a booming business. The company has grown to be the world’s number one beverage company. It has spread to over 200 countries worldwide with over 3000 brands of beverages.

The company was not spared by the recent economic recession. Rather than sit and wait, the company’s management put in place major strategic plans aimed at recovery with major strengthening having been done on the marketing and other strategies.

In the marketing strategy, the company had to adjust prices for several of its products to counter its competitors e.g. the private coca-cola bottling company, snapple group incorporation and Pepsi company of the US and other non-alcoholic beverage manufactures who were also slashing their prices (yahoo finance 2010).

The company reviewed its products, packaging, equipment, marketing and place (Coca-cola company, 2010).

Products

The company has since the start of the recession started entirely new products to meet the consumer’s needs. The company recently started producing ‘nutrijuice’ which is an orange juice enriched with minerals to cater for malnutrition in children.

This was previously unexploited area and the company continues to reap millions while still addressing the customers’ needs. Other new products in the company’s beverage portfolio include Nuricier, Vintingo, Nurisha and hundreds of other new products are unveiled almost every month.

Packaging

This refers to the bottle and other containers holding the product. The functions of packaging are two; firstly is to hold and protect the product in transportation, and it also promotes the product. A small change in the way a product is packed may make it look new and thus attract more customers.

The design of the package also serves to add beauty to the product. A good design makes the product easy to identify and also contains information about the company.The company continue to improve its packaging to address issues that touch on environment. Their bottles have been greatly improved and look even more appealing to its customers.

Equipment

The Coca-Cola Company has acquired new and highly sophisticated machines that are revolutionizing the way making and dispensing of their products is done. These equipments work much faster and are cheaper to maintain and are more superior to its competitors’ equipment. The newest acquisitions are a fountain dispenser which is a new technology dispensing at a very fast rate.

This machine is delivering a large variety of beverages all at the same time. The company recently unveiled an Interactive Vending Machine that is equipped with a video.

This is a hi-tech machine that is causing envy from the company’s rivals. Climate friendly coolers are also among the newest technology owned by the company and is cutting the amount of co2 released into the atmosphere by up to 35 percent (The coca-cola company, 2010).

Advertisement Strategy

An advertising strategy is aimed at communicating ideas about a company’s products and services to potential customers in order to persuade buy the company’s products. An advertisement if made rationally and wisely should mirror the objectives of the company. The nature of the company in the public eye is determined by a good advertisement.

Creativity and flexibility in planning and the information about a given type of consumer are used to reach him. The aim of advertisement in today’s world is three fold.

  1. Creates knowledge of the presence of the business,
  2. raise sales,
  3. remedy a business picture in the public.

Coca-cola Company has in the recent year put up a massive advertising campaign aimed at reaching a far much bigger market. Adverts by the company feature in almost every product including; T-shirts, caps, shirts, cans, bill boards, in news headlines, within programs in the TV, radio, football matches e.t. c. Coca-cola company has employed the various steps in its advertisement strategy thus creating awareness among the people.

It has a highly positioned reputation and its products are known all over the world. The company has invested a huge amount of resources for advertisement and has created loyalty from its customers. A huge consumer base has in the process been created and this is providing resources needed for more advertisement.

In its advertisement strategies, the company has regarded all the essential elements of advertisement by considering the target audience, conceptualized the product, has considered the communication media and also the advertisement information. The company has indeed shown a highly motivated planning and flexibility in its advertisement strategy.

Rather than compete against its rivals such as PepsiCo, the company target the common problem facing its consumers which is the thirst. It has placed coolers in almost every small and big street in all towns. This makes sure that its products are at an easy reach to its customers. Consequently, the company has been able to reach a huge number of people in the market than its rivals.

Toyota Company

This company was initially started as spinning and weaving company in 1918 by Sikichi Toyoda. 1933, an automobile department was created. Their first model of car, an A1 passenger prototype was rolled out. It was in 1937 that Toyota Car Company was formed.

Hiroshi Okuda became the company’s president in 1955. Currently, the company is one of the largest car producers in the world with over ten million units produced annually and control about 12% of the world’s vehicle market.

The company incorporated various mechanisms of marketing strategies into its operation and has continually been improving its products to suit the current consumer demands. The company presents a superb plan that guides its operations as regards marketing. This is despite facing a hard task of trying to win back its consumers belief and to persuade them buy its beleaguered car brands that continue to face mechanical problems.

This is in fact bad news for the company that has also to deal with declining markets after the recession and a management crisis. The company has currently embarked on massive advertisement campaign aimed at winning back the consumers’ confidence in the company’s automobiles.

The company is working day in day out to ensure that it lives up to the standards and make cars that meet the consumers’ needs and restore the consumers’. The company’s adverts can be seen in more than 500 sites in the web in the struggle to recall back the faulty cars. Despite these mounting challenges, Toyota Company continue to apply its five principles of continued improvement, teamwork, challenges respect and ‘go see’.

This is in addition to the other marketing strategies that continue to function in these hard times. The company has segmented its market based on five other criteria of homogeneity, heterogeneity, substance, competitors and the available resources.

Based on this criteria, the company has been able to divide its market into two broad categories and make its products with the target consumers in mind, these are; those in developing and in developed worlds. There is a move towards making their already existing brands better and even make new ones.

Toyota prius, their newest model is made in such a way that it has improved fuel consumption as compared to earlier fuel guzzlers such as the prado. The models are made in such a way that there is a vehicle for all the classes.

Pricing has been looked into and the Toyota’s cars are now more pocket friendly as compared to those of its competitors.It is evident that the company is now out of its problems having taken the right measures and the future of the automobile manufacturing company is now firmly gripped.

Conclusion

Both economic, managerial and the technical problems facing companies like Toyota can be addressed by use of various strategy. While some remain short-term, others prove to be widespread though still they do not demand changing the vision of the company. These problems should only serve to modify the way decisions are made and to channel back companies into making profits.

Reference List

Johnson & Scholes (2010). . Web.

MDF. Strategic Options. Web.

QuickMBA (2010). Strategic management, . Web.

Small business economic outlook (2008). Web.

The coca-cola company, (2010). Coca-Cola Product, Packaging & Marketing Innovation. Web.

Yahoo finance (2010). (COKE). Web.

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IvyPanda. (2020, May 26). Various Economic Strategies For Businesses. Retrieved from https://ivypanda.com/essays/various-economic-strategies-for-businesses/

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"Various Economic Strategies For Businesses." IvyPanda, 26 May 2020, ivypanda.com/essays/various-economic-strategies-for-businesses/.

1. IvyPanda. "Various Economic Strategies For Businesses." May 26, 2020. https://ivypanda.com/essays/various-economic-strategies-for-businesses/.


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IvyPanda. "Various Economic Strategies For Businesses." May 26, 2020. https://ivypanda.com/essays/various-economic-strategies-for-businesses/.

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IvyPanda. 2020. "Various Economic Strategies For Businesses." May 26, 2020. https://ivypanda.com/essays/various-economic-strategies-for-businesses/.

References

IvyPanda. (2020) 'Various Economic Strategies For Businesses'. 26 May.

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