Importance of Proper Synchronization of Strategic Decision Making and Business Model

Proper synchronization of strategic decision making and business model is crucial for a company's success. Complex business models can only be adopted if paradoxical strategies are hosted. The three steps of strategic management are strategy formulation, implementation, and evaluation and control.

Exercise 1
The first question has been selected. A creative, distinctive strategy that makes a company
ahead of its competition is due to the proper synchronization of the company’s strategic
decision making and business model. It is very important for each and every organization to
make sure that the current capabilities is being properly used. Complex business models of
any organization can only be adopted if hosting of paradoxical strategies can be done.
Business models of a company can be profitable for the organization only when it is properly
strategized in terms of making dynamic decisions, commitment building etc. (Smith, Binns,
Tushman, 2010).
The third question has been selected. The making of strategy and execution of the strategy
includes establishment of company’s mission, developing the business model of the company
and crafting various strategies to execute the business model. The three steps of Strategic
management are Strategy formulation, implementation, Evaluation and control. Formulation
of strategy is followed by the values that the company shares, it is also followed by
establishment of objectives and strategic decision. The second step which is the
implementation it is based on organizational culture and its leadership. The final step is
executed with the help of evaluation of performance, Structure and results and rewards
(Alkhafaji, Nelson, 2013).
Exercise 2
1) It is very important to formulate a good strategic decision as well as execution of the
strategy as per the formulation. In this competitive world where change is the only
constant, it is very important for every companies to make strategies so that it can
gain competitive advantage. Along with proper formulation of strategies proper
organizational structure and leadership structure should be set so that the strategy

which has been formulated can be implemented. Successful strategy planning and
failure in implementation will lead the company to nowhere. For examples Mercedes
Benz in 1993 formulated a strategy to expand its business operations in to new
markets across the world. The successful implementation of the strategy witnessed a
13% increase in the sales of Mercedes (Alkhafaji, Nelson, 2013).
2) The low cost provider are those who focusses on increasing the market by providing
the lowest price to its customer. It aims at increase the customer database whereas the
high cost provider aims at capturing a niche market. It focusses on high end customers
and aims at providing a premiere quality of product to its customers. Low cost
provider has a wide range of customers from low income group to high income group
whereas High cost provider only consists of customers who falls under high income
group. For example, In the Automobile industry Maruti is a low cost provider whereas
Audi are high cost provider. The marketing strategies of both the companies are very
different from each other.
3a) A local company should very efficiently formulate its strategies to compete with the
global market. The pricing strategies should be kept low as compare to those who are
operating globally. The local company should make its business model in such a way that
it aims at customer satisfaction. For example, JW Marriott who is one of the major player
in the hotel industry has formulated its strategy in such a way that only high end
customers can afford them but a local lodge should strategise themselves by lowering its
price and by providing better services. This would attract a lot of local customers.
3b) In the San Francisco market it can be seen that there are major players of the Hotel
industry like Hyatt Regency, Fairmont and many more. It is very difficult to compete with
them and it can be seen that Good hotel which is a local hotel has kept its price as well as

its sustainability practices very low. Good hotel has to make the sustainability practices in
the market very high so that it can compete with its peers.
4) The advantage of using a line of matrix helps the organization to understand at which
key factor they are performing well and at which the organization needs to improve its
performance. According to the table given in the attachment it can be seen that Gap
inc has the highest score in terms of performance in each and every key factor
whereas Rose stores who has a broad network of stores scores the lowest because the
weighted average of Ross stores in other aspects is very less. Based on the result it
can be seen that Gap Inc. is the strongest competitors whereas Ross stores is the
weakest link.

References
Smith, W. K., Binns, A., & Tushman, M. L. (2010). Complex business models: Managing
strategic paradoxes simultaneously. Long range planning, 43(2-3), 448-461.
Alkhafaji, A., & Nelson, R. A. (2013). Strategic management: formulation, implementation,
and control in a dynamic environment. Routledge.