Limited Growth Strategies Analysis

This assignment requires a thorough analysis of limited growth strategies in business. Students must examine the pros and cons of such strategies, considering their implications for firm performance, innovation, and resource allocation. The analysis should draw upon relevant academic literature and real-world examples to provide a comprehensive understanding of this strategic approach.

Business Strategy
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TABLE OF CONTENTS
INTRODUCTION................................................................................................................................3
TASK 2.................................................................................................................................................3
a) Future strategy for Sony Corporation..........................................................................................3
b) Justification of selection of future strategy.................................................................................4
c) Roles and responsibilities of Sony staff in strategy implementation...........................................4
d) Estimating resources requirements that Sony will need to implement limited growth strategy. 5
e). Contribution of SMART objectives to help Sony to achieve strategic implementation.............6
CONCLUSION....................................................................................................................................7
REFERENCES.....................................................................................................................................9
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INTRODUCTION
Business strategy is set of activities which are prepared by company to achieve defined
objectives in effective manner (Teece, 2010). It prepares to deal with major business operational
issues. A well define business strategy is providing the guidelines to a company on how an
organization is performing well in-front of competitors. It delivers several benefits to the companies
in terms of increasing customer retention, effective allocation and use of different resources, growth
of the business in various markets etc (Olson, Slater and Hult, 2005). The following research is
related to the business strategy and for this Sony Corporation is taken into the consideration. The
objectives that will cover under the following study are approaches of evaluation, selection of
strategy and implementation of the selected tactics. Along with this, future strategy for the
organization, roles and responsibilities of the staff members in strategy implementation, required
resources for executing tactics and SMART objectives for effective implementation of strategy
within the Sony Corporation will also be discussed.
TASK 2
a) Future strategy for Sony Corporation
There are four options in front of Sony Corporation in which one of them can help in
developing future strategies for them. In this context, the available options are as follows:
 Market Entry: It is a planned method that helps in introducing new products and services
in a new market (Doherty, 2007). There are different factors which affects it such ad trade
barriers, competition level, government regulations etc. In market entry strategy, a company
is offering existing products into new market with different purposes such as expansion,
increase market share, raise profitability etc. In case of Sony Corporation, to develop
sustainable business, firm can use market entry strategy (Peng, Wang and Jiang, 2008). With
the help of this, it will be easy for the organization to grow the business in new identified
marketplaces. Substantive growth: If a company is taking decision to adopt substantive growth, then
there are two options that are available either diversification in related or unrelated market
(Kaplan and Norton, 2001). If Sony Corporation moves in direction of diversification in
related market, then organization should bring new innovation in the existing products. If
the firm is following to get diversified, the business in unrelated market then for this, Sony
Corporation has to develop new core competencies and skills to develop new products and
services (Peppard and Rylander, 2001). The benefits of substantive growth strategy for
company are that it will provide exponential growth to business and keep strengthening to
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the core competencies of organization. Limited Growth: In this strategy, there are two ways to achieve limited growth; first is price
penetration and another is market development. If Sony Corporation decides to lower down
the prices of the products and services, then it will increase the sales of the firm as compare
to its competitors (Richard, 2000). If organization adopts market development strategy, then
it will be important to bring the improvements in existing goods and services and they
should contain unique features as compared to its competitors.
 Retrenchment: The following strategy is adopted in the situation when a business unit is
only generating loss for the organization and it is required to transform that unit into a profit
making firm. There are two alternatives for retrenchment strategy and are namely;
divestment and liquidation (Richard, 2000). If any one unit of Sony Corporation is at the
stage of declining, then divestment tactic can be used. But, if company wants to sell out any
business unit to cover loss, then liquidation strategy can be used.
b) Justification of selection of future strategy
The aim of Sony Corporation is to expand the business at global level and deliver good
quality services to the customers in the exchange of money. To achieve this objective in future, the
appropriate strategy for company is limited growth tactic (Sherman, 2016). The reason of
suggesting the following framework for the organization is it will help in manages funds and
revenues. Along with this, it will reduce the chances of increase debt during constant growth of a
Sony Corporation. It will enable the firm to pay off borrowed money as well as increase sales
volume by raising profit level for long term. By adopting limited growth strategy, enterprise will be
able to balance the present business operations for new market (Advantages & Disadvantages of
Limited Growth Strategies, 2016). Besides this, it will help the company to take advantages of
economy of scale. Because; as a business of Sony Corporation will grow more, it will reduce the
cost per unit of product and will lower down the overall prices of goods.
On the other hand, if Sony Corporation adopts limited growth strategy, then it will promote
innovation within the products. It will increase the engagement of the workers in new research and
develop their skills as well as core competencies (Richards, 2016). This will help company to
become more profitable organization in minimum time duration. Limited growth strategy will help
management of Sony Corporation to create a balance between the new business operations of new
market areas.
c) Roles and responsibilities of Sony staff in strategy implementation
Strategy implementation can be defined as a process which helps in executing strategic plan
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in effective manner. As per the above discussion, limited growth strategy is one of the best
strategies for Sony Corporation for coming future (Kaplan and Norton, 2000). There are number of
staff members who play important role in this process. These include top, middle and lower level
management, business partners and employees of the organization.
Top management is accountable for setting proper organization climate for implementing
appropriate future strategy. Developing appropriate operating plans is also one of the major
responsibilities of the top level management of the organization (Ritter and Gemünden, 2004).
Managers of top level management of Sony plays important role in monitoring and reviewing the
strategic implementation process on regular basis as it helps in getting success.
Similarly, middle level management of Sony Corporation are accountable for management,
communication, planning and control. Middle managers have responsibility of making appropriate
decisions for implementing strategies in effective manner (Olson, Slater and Hult, 2005). Along
with this, they play important role in communicating roles and responsibilities of each employee in
efficient manner. It helps in completing every task on time. Along with this, managers of middle
level management play significant role in conducting environmental analysis, developing schedule
of strategic implementation, etc. Managing control in strategic implementation process is also one
of the major accountabilities of middle level management of Sony Corporation (Akan and et.al.,
2006). They play important role in developing policies, rules, specific measurements for measuring
success of strategic implementation process.
Lower level management are accountable for daily operation and day-to-day activities of the
strategic implementation. Employees of the Sony Corporation plays very significant role in
implementing limited growth strategy. Involvement of employee is necessary for completing each
and every activity of strategic implementation process (Allio, 2006). Along with this, employees are
responsible for completing each and every task which is allotted to them by middle level
management of the company.
Along with this, business partners play important role in decision making process about
strategic implementation. Along with this, they are accountable for financing entire process of the
same (Teece, 2010). Overall role of every member of Sony Corporation helps in implementing the
limited growth strategy in an effective manner.
d) Estimating resources requirements that Sony will need to implement limited growth strategy
Implementation of strategy is not an easy task for Sony Corporation and for this process;
organization will require number of resources such as financial, human and technical resources. All
these resources are described as under:
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 Financial resources: As per the above discussion, Sony Corporation needs to implement
limited growth strategy. As per this strategy, organization needs to sale products and services
at low price (Peng, Wang and Jiang, 2008). Regarding this, company needs to invest huge
amount of money in purchasing raw materials. Along with this, organization requires
financial resources for technology advancement. Including this, company requires
appropriate amount of funds for marketing and advertisement of new products and services
also. Human resources: These resources are required for completing each and every task of
strategic implementation in effective manner. Regarding this process, company needs to
recruit skilled and experienced employees who will help in improving the overall
performance of the company (Doherty, 2007). Major human resources which are required
for strategic implementation process are top, middle and lower level managers and
functional employees. These human resources will help in completing whole process of
strategic implementation in a successful way.
 Technical resources: Limited growth strategy focuses on the lower prices of products and
services at initial time. So, for reducing cost of products and services company needs to use
high technical resources. Along with this, company needs to use different technical and
online channels of marketing and communication which will help in increasing the
awareness of customers about products and services of company (Kaplan and Norton, 2001).
Therefore, organization is required to make use of technical resources for implementation
this strategy in an effective manner.
e). Contribution of SMART objectives to help Sony to achieve strategic implementation
As per the given case study, Sony Corporation has strong financial performance in
developing and developed countries (Peppard and Rylander, 2001). For completing successful
implementation of limited growth strategy, organization needs to employ smart objectives of the
company which is as follows:
 To reduce the total cost of products and services for attracting customers at initial level.
 To reduce the power consumption of products and services by 20%.
 To increase the sales of the company by 30% in coming three years (Richard, 2000).
Therefore, above discussed objectives helps in completing strategic implementation in
appropriate way (Kaplan and Norton, 2001). Objective of the cost reduction helps in reducing the
price of products and services which will play important role in pricing decision at the time of
strategic implementation. So, Sony Corporation needs to employ this objective in strategic
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implementation process. Evaluation of another objective has reflected that Sony Corporation
focuses on improving the quality of products and services by reducing power consumption by 20%
(Kaplan and Norton, 2000). It helps in increasing the satisfaction of customers which will further
leads to enhance the sales of the organization.
Balance Score Card:
Figure 1: Balance score card approach
(Source: Balanced Scorecard, 2016)
It is one of the appropriate tools which can be used by Sony Corporation at the time of
developing a new strategy and aligning the same to organizational performance (Ritter and
Gemünden, 2004). Financial perspective of this approach has reflected that limited growth strategy
of the company has increased the financial performance of the company because it attracts number
of customers for buying particular products and services which leads to enhance the sales of the
organization (Olson, Slater and Hult, 2005).
Along with this, due to low price and high quality products, Sony Corporation has met the
needs and requirement of customers and other stakeholders (Akan and et.al., 2006). Efficiency in
every business operation has satisfied the internal business perspective also. Along with this, this
strategy focuses on innovation in power consumption of products and services of the organization
(Allio, 2006). Overall, balance score card approach has reflected that smart objective of the
organization have contributed in successful implementation of the limited growth strategy.
CONCLUSION
From the above research study, it can be summarized that business strategy is the most
important part of every business or organization. Without this, it is impossible to achieve the
business objectives and aim. For Sony Corporation, there are four available future strategies; market
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entry, substantive, limited and retrenchment. The appropriate strategy for the company is limited
growth strategy because it delivers different benefits to the organization. Besides this, top, lower
and middle management, employees and business partners of Sony Corporation have played an
essential role in implementation of limited growth strategy. In addition to this, financial, human
resources and technology resources are required for executing the suggested framework within the
firm.
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REFERENCES
Books and Journals
Akan, O. and et.al., 2006. Critical Tactics for Implementing Porter’s Generic Strategies. The
Journal of Business Strategy. 27. pp.43-53.
Allio, M., 2006. Practical strategy development: a wise investment for middle market businesses.
Journal of Business Strategy. 27(2). pp.31 – 42.
Doherty, A. M., 2007. The internationalization of retailing: Factors influencing the choice of
franchising as a market entry strategy. International Journal of Service Industry
Management. 18(2). pp.184-205.
Kaplan, R. S. and Norton, D. P., 2000. Having trouble with your strategy? Then map it. Focusing
Your Organization on Strategy—with the Balanced Scorecard. p.49.
Kaplan, R. S. and Norton, D. P., 2001. The strategy-focused organization.Strategy and Leadership.
29(3). pp.41-42.
Kaplan, R. S. and Norton, D. P., 2001. The strategy-focused organization: How balanced scorecard
companies thrive in the new business environment. Harvard Business Press.
Olson, E. M., Slater, S. F. and Hult, G. T. M., 2005. The importance of structure and process to
strategy implementation. Business horizons. 48(1). pp.47-54.
Olson, E. M., Slater, S. F. and Hult, G. T. M., 2005. The performance implications of fit among
business strategy, marketing organization structure, and strategic behavior. Journal of
marketing. 69(3). pp.49-65.
Peng, M. W., Wang, D. Y. and Jiang, Y., 2008. An institution-based view of international business
strategy: A focus on emerging economies. Journal of international business studies. 39(5).
pp.920-936.
Peppard, J. and Rylander, A., 2001. Using an intellectual capital perspective to design and
implement a growth strategy: the case of APiON. European Management Journal. 19(5).
pp.510-525.
Richard, O. C., 2000. Racial diversity, business strategy, and firm performance: A resource-based
view. Academy of management journal. 43(2). pp.164-177.
Ritter, T. and Gemünden, H. G., 2004. The impact of a company's business strategy on its
technological competence, network competence and innovation success. Journal of business
research. , 57(5). pp.548-556.
Teece, D. J., 2010. Business models, business strategy and innovation. Long range planning. 43(2),.
pp.172-194.
Online
Advantages & Disadvantages of Limited Growth Strategies. 2016. [Online]. Available through:
<http://people.opposingviews.com/advantages-disadvantages-limited-growth-strategies-
10060.html>. [Accessed on: 24th February, 2016].
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Sherman, F., 2016. Advantages & Disadvantages of Limited Growth Strategies. [Online]. Available
through: <http://smallbusiness.chron.com/advantages-disadvantages-limited-growth-
strategies-41321.html>. [Accessed on: 24th February, 2016].
Richards, L., 2016. Advantages & Disadvantages of Limited Growth Strategies. [Online]. Available
through: <http://www.ehow.com/info_8532268_advantages-disadvantages-limited-growth-
strategies.html>. [Accessed on: 24th February, 2016].
Balanced Scorecard. 2016. [Online]. Available through: <
http://www.integratingperformance.com/pages/integration/systems/balanced-scorecard-
10.html>. [Accessed on 24th February, 2016].
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