Understanding Business Strategy: A Reflection on Adnam Company

This article reflects on the importance of business strategy in achieving a competitive advantage, with a focus on Adnam Company. It discusses the relevance of Porter's five forces analysis, the impact of supplier power, industry rivalry, barriers to entry, and the availability of substitutes.

Running Head: Business Strategy
Business Strategy
Institution
Name
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Business Strategy
Business strategy refers to the working plan of a firm for preforming objectives, achieving its
vision, competing successfully and using its business model to optimize financial performance
(Spender, 2014). In this regard, I have been developing the interest in the field of business with
the main focus being the advancement of knowledge in business competitiveness. Therefore, I
find the Adnam Company reflective paper resourceful because it will expound my perception on
the subject. I intend to develop a profound understanding of the Porter’s five forces analysis in
the context of Adnam Company. Proper integration of the five forces analysis into a company’s
framework of operations is likely to earn it a competitive advantage over the other firms in the
same industry (Magretta, 2012).
I have always thought that business strategy is not as important as it would appear in the Adnam-
reflective paper. I believed that identifying a readily available market is the only key aspect in
building a successful business. However, the notion of bargaining power of the buyers and
suppliers, barriers to entry, existing rivalry and the availability of substitutes in a particular
industry has never been so clear to me before I read the Adnam Company reflective paper. I
have always had my own doubts about the applicability and importance of the mentioned aspects
of business strategy hence making the subject worthwhile in the long-run.
Well-established companies are perceived as the strongest competitors in their respective
industries (James & Merchant, 2013). The most obvious aspect that I discovered in the paper is
the advantage of upholding the values of the company which could be reflected through efficient
business conducts in serving the customers. However, it requires the company to ensure the best
quality and taste of its products as compared to its competitors’ products. I learned that good
values of a company could reflect the firm’s mission and vision therefore, putting the company
in a competitive advantage in the particular industry as observed in Adnam’s Company case. I
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would not have been able to make this connection prior to going through the Adnam-reflective
paper. This is because I used to believe that the values, mission and vision of a company are as
good as just being stated other than the practical part of it. The quality of products and services
are considered to be critical in running a successful business through customer-oriented
practices.
The bargaining power of buyers would possibly be determined on the basis of five force analysis
of Porter (Biase, 2014). For instance, in the brewing industry, the bargaining power of the buyers
is very high owing to the availability of other substitutes for its brands of alcoholic drinks in the
market. It would not have occurred to me that the availability of close substitute for a particular
service or product would present a great challenge to businesses in capturing market shares.
However, as it would be suggested, I realized that such mitigations could be alleviated through
diversification of the company’s products and services. For instance, Adnam Company would
begin to manufacture soft drinks and fruit juices.
The supplier power is the pressure that suppliers exert on businesses by lowering quantity,
raising prices or minimizing availability of their products (Froeb, et al., 2015). I could see the
reality of the way increased taxes and growing number of competitors in the market affected the
profit margin of suppliers. However, I could not have related the importance of these two aspects
of suppliers in preventing possible increase in the prices because the customer’s existing in the
market may decide to shift. Therefore, Adnam Company is able to enjoy the controlled power of
bargaining of the suppliers in the market.
Industry rivalry tend to advance in intensity when firms either see an opportunity to enhance
their position or feel competitive pressure. I never knew that very high rivalry among companies
in the particular industry could possibly impose stiff competition over the new entrants. For
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instance, Adnam firm together with other companies in the brewery industry continue to thrive
under the pretext of low profit margin which has also barred the entry of other potential
competitors.
Barriers to entry are defined as the obstacles which make it hard for a company to venture q new
market (Geroski & Jacquemin, 2013). My understanding of the aspect of entry barrier has always
been limited. I discovered that even the least aspect of barriers to entry could contribute
significantly to a competitive advantage for a business. I learnt that it is always advantageous
when the entry barriers are high as presented in the case of Adnam Company. The barriers could
be higher taxes imposed in the industry and government regulations which tend to favor the
already existing firms in the particular industry.
The availability of substitutes directly affects the demand and supply of a company’s products
and services (Bond & Hughes, 2013). As there the need to maintain and even grow the
company’s market share, I realized the importance of dealing with close and distant substitutes
through product and service diversification with an objective of ensuring high market share. I
observed that Adnam Company is already engaging in the diversification of its products ranges
by producing gin and spirits. Therefore, expansion and diversification form the key business
strategies of many successful businesses (Hiriyappa, 2013).
Conclusively, the Adnam-reflective paper has helped me to re-examine the subject of business
strategy and improve my understanding of the same. I have been able to compare and evaluate
my preconceived ideas about the subject to the findings spelled out in Adnam-reflective paper.
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References
Biase, S. A. D., 2014. Applied innovation : a handbook. Chicago, IL: Premier Insights.
Bond, T. & Hughes, C., 2013. A-level Economics Challenging Drill Solutions (Yellowreef). s.l.:Yellowreef
Limited.
Froeb, L. M., McCann,, B. T., Ward, M. R. & Shor, M., 2015. Managerial Economics. s.l.:Cengage
Learning.
Geroski, P. G. & Jacquemin, A., 2013. Barriers to Entry and Strategic Competition. s.l.:Taylor & Francis.
Hiriyappa, B., 2013. Corporate Strategy Formulation and Implementation Process. s.l.:Booktango.
James, D. L. & Merchant, R., 2013. The new Asia : business strategies for the economic region that is
shaking up the world. Santa Barbara, California: Praeger, an imprint of ABC-CLIO, LLC.
Magretta, J., 2012. Understanding Michael Porter : the essential guide to competition and strategy.
Boston, Mass: Harvard Business Review Press.
Spender, J. C., 2014. Business strategy - managing uncertainty, opportunity, and enterprise.. s.l.:Oxford
University Press.
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