Strategy and Innovation

This report explores the different strategic options available to a fitness centre called Realfit. It discusses the importance of innovation and how it can help businesses sustain in a competitive market. The report recommends adopting a visionary approach to strategy and provides justification for this choice.

Strategy and Innovation

Table of Contents
INTRODUCTION...........................................................................................................................1
Identify at least 2 strategic options for the company.......................................................................1
Inside-Out or Outside-In.........................................................................................................1
5 approaches to strategy.........................................................................................................2
Recommendation regarding one of the strategic options.................................................................6
Justification behind the recommended option being the preferred choice......................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In the modern era whereby extensive competition prevails at market place, it is essential
for business organisations to come up with rapid innovations in order to sustain in market for
long period of time (Abdel-Razekand Alsanad, 2014). Looking upon the growing importance of
coming up with rapid innovations, companies have now started to incorporate it within the
corporate strategy. With the integration of both of these, corporations in the hypercompetitive era
aim to secure a top place at global scale. Innovation can be brought in terms of products,
services, markets, business practices, technology etc.
The following project is based on the analysis of strategy and innovation within the
premises of a local fitness centre of United Kingdom operating under the name of “Realfit”. This
organisation was setup in the year 2014 and focussed on maintenance of healthy lifestyles of
people. This report will explore the different strategic options available to this organisation on
the basis of application of certain management models. Further, recommendation is included
regarding a specific strategic choice or direction that should be adopted by the corporation along
with relevant justification.
Identify at least 2 strategic options for the company
Inside-Out or Outside-In
Inside-out thinking:
Hereby, the emphasis is on business procedures, frameworks, techniques and offerings
which are developed as well as executed as a result of taking into consideration intrinsic thinking
and instincts. The need, preference, occupation, demands and point of view of clientele does not
place any kind of influence in this thinking (Chesbrough, Lettl and Ritter, 2018). The decision
making is executed in accordance with considering what is most suitable for an organization
rather than the clients.
Outside-in thinking:
Opposed to the above type, this kind of thinking implies that business is seen from the
view point of customers and thereby, all the procedures, instruments, merchandise and decisions
are stipulated in accordance with ensuring the best for customers. Hereby, the sole motive of a
corporation is to address the issues faced by customers in an effective manner so that they can
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derive maximum satisfaction. It is when business gives ears to their voice and opinions that the
firm is able to identify the jobs that the customers intend to get done.
Realfit is a fitness centre that is running at domestic scale within UK. Thus, it would be
better for this firm to undergo outside-in thinking as this provides assistance to corporation in
staying aligned with the needs and preferences of clientele. Also, it holds a number of other
advantages such as decline in customer complaints, enhanced clientele contentment, inflated
referrals, excessive repeat purchase, increased ease of doing business and decrease in quantum of
customers lost by the organization (Debruyne, 2014). This means that with this, the respective
fitness centre would be able to cater to the demands of local people and thereby retain them for a
longer period of time.
5 approaches to strategy
Stipulation of a strategy is not an easy task and that is why it is regarded as a task. For
this purpose, companies could make use of a palette. In this relation, 3 experts of management
pertaining to BCG devised a palette aimed at showing a number of ways in which strategy can be
approached in today’s hyper competitive and complex corporate era. Strategy includes the
process of problem solving and thus, it can be acknowledged that the selection of best approach
depends upon the certain issue that the firm intends to address (Gebauer, Worchand Truffer,
2012). The experts focused upon 3 dimensions in accordance with which the business
environments tend to differ. These 3 dimensions are: Predictability (whether one can forecast
what is ahead), malleability (whether one can, alone or in collaboration with others, shape it) and
harshness (whether one can survive it). Taking into account the first two dimensions, such
management experts developed a matrix that revealed 5 different types of strategic approaches.
1. Classical (Can predict it but can't change it):
It is that kind of approach which was traditionally taught within the premises of business
schools whereby planners conduct meeting to determine the crucial elements of business
environment and how these can be best positioned within it. A remarkable example of this
approach is the bakery sector whereby classical approach to strategy is yet existent (Holtzman,
2014). The steps of this model consist of analysing, planning and implementing. The overruling
principle hereby is “Be big”.
2. Adaptive (Can't predict it and can't change it):
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Business organisations across the globe adopt this approach to strategy in an instance
whereby the environment in the confines of which it operates is acknowledged to be neither
malleable nor predictable. Whereby the predictions are difficult and advantage is short lived in
nature, the only protection against continuous disruption is the ability possessed by an enterprise
to constantly alter itself (İplik,Topsakaland Doğan, 2014). Within this approach, success is
gained by facilitating changes through constant experimentation and identification of lucrative
opportunities in a manner which is quicker than others. To implement this approach to strategy
within the premises of a company, adaptive organisations take 3 crucial steps, being constantly
varying their approach, developing an array of strategic options for the purpose of test and
selecting the most viable options to implement. The exemplary exploitation of this strategy is
seen within textile sector whereby companies undertake the 3 before-mentioned steps. The
overruling principle hereby is “Be fast”.
3. Visionary (Can predict and change it):
Pioneers within such kind of business environment accept that they have the ability to
dependably make or reproduce a situation to a great extent independent of anyone else. Such
individuals are typically acknowledged to be the first ones to present a progressive new item or
plan of action. Business people have constantly done this however large scale organizations have
currently understood its significance (Rhéaume and Gardoni, 2016). An exemplary person in this
regard is Steve Jobs, the founder of Apple Inc., who puts forward the point of view that
achievement can be derived on the basis of the premise that "imagine, understand the plausibility
and continue scaling up the chance". The overriding principle hereby is recognised as “Be first”.
4. Shaping (Can't predict but can change it):
At the point when an organization can compose or modify the standards of an industry at
an early phase of its advancement, this key methodology is suggested. It can apply in profoundly
divided, youthful, unique enterprises, currently disrupted businesses and developing
marketplaces (Pynnönen, Hallikas, and Ritala, 2012). This approach to strategy is generally
executed in a collaborative manner, like with the programming applications or the online stage of
Amazon. The shaper arranges the exertion following a 3 step procedure: influence, co-develop
and keep up. The overruling principle hereby is acknowledged to be “Be the orchestrator”.
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In a turbulent corporate environment, notwithstanding, an organization may be required to shift
itself, re-establishing essentialness and rivalry. This gives rise to the need of emergence of the 5th
approach to strategy, explained as underneath.
5. Renewal (Resources are severely constrained):
This approach to strategy intends to re-establish the imperativeness and aggressiveness of
a firm when it is working in a turbulent atmosphere. Such troublesome conditions can be brought
about by an extended perplex between the company's way to deal with system and its condition
or by an intense outside or inward shock. At the point when the outside conditions are trying to
the point that the company’s present method for working together can't be continued,
conclusively changing course is the best way to endure, yet additionally to tie down another
opportunity to flourish (Sako, 2012). An organization should initially perceive and respond to the
breaking down condition as right on time as could be expected under the circumstances. At that
point, it needs to act conclusively to re-establish its feasibility, conserving by pulling together the
business, reducing expenses, and safeguarding the capital. At last, the firm should turn to one of
the four different ways to deal with technique to guarantee that it can develop and flourish once
more. This kind of approach contrasts notably from the other four ways to deal with
methodology: it is typically at first guarded, consists of 2 specific phases and is regarded to be a
prelude to implementing one of the different approaches (Ungureanu, Pop and Ungureanu,
2016). This approach to strategy has become progressively basic in view of the quantity of
organizations escaping alignment with its surroundings. The overruling principle hereby is
acknowledged as “Be viable”.
Being an entity which is running on a domestic scale only, it is important for Realfit to
adopt an effective approach to strategy such that it can enhance its existing market share and
value in the upcoming time. On the basis of analysis of above discussed approaches to strategy, it
can be said that the respective fitness center should apply visionary approach to strategy. This is
because this approach encourages a firm to come up with rapid innovations at due intervals of
time in order to stay aligned with the needs and demands of people at market place (Santoro and
et. al., 2018). This will provide assistance to this locally operating fitness centre to gain the
attention of large number of people by coming up with services which can disrupt the market
place. Thus, it would aid the firm to inflate its existing market share and value, thereby also
enhancing the scope for company to enhance the scale at which it conducts operations. By
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adopting a visionary approach, the leader of Realfit would be able to build an effective rapport
with customers, thereby increasing the chances for company to gain access into global market
place.
Porter’s strategy framework
Porter's generic framework is considered as an effective as well as strategic tool that is
used by business associations in executing their business activities in such a manner that
provides them with maximum benefits. Besides this, it also gives its contribution in making them
gain a competitive edge at market place. The respective framework is consist of several
strategies that simply provides guidance to business manager to find out best strategy that will
support them in gaining competitive advantage (Seebode,Jeanrenaud and Bessant, 2012). With
respect to Realfit, its manager have adopted this model in order to identify best strategy that will
support them out in attaining business growth in the quicker manner.
Cost leadership: Here, an organisation strives to maintain the lowest cost and renders
their goods and services to a wider market at the least prices. This strategy is based upon the
ability of a corporation to possess a control over their operating cost, thereby, generating high
profits and gaining competitive advantage. By applying this, Realfit would be able to keep its
cost low and thereby utilize that amount to invest in effective and gain creating activities as well
as procedures.
Differentiation: Here, a company will offer services and products with unique features
and attributes that possess value for customers. With this, the organisation would be able to
generate brand loyalty, thereby, creating price inelasticity on the part of buyers. By effectively
implementing this strategic option within the confines of Realfit, the respective fitness centre
would be able to gain a competitive edge at market place, thereby ensuring its sustainability for a
long period of time (Semuel, Siagian and Octavia, 2017).
Focus: The focus can be either cost or a differentiation. While pursuing Cost Focus, an
entity concentrates on development of internal efficiencies which provides assistance in
withstanding the external pressures (Spieth and Schneider, 2016). Differentiation focus implies
that company will totally emphasize upon differentiating the products from its rivals so as to gain
an edge over competitors in market place.
On the basis of discussion done above regarding the different types of strategic options as
provide by Porter, it can be said that the entity should put due emphasis on executing cost
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leadership within the confines of this local fitness centre. This has been suggested as this
strategic option would provide assistance to Realfit in reducing the overall cost of business
operations so as to invest the surplus amount in effective operational and management domains
and activities.
Recommendation regarding one of the strategic options
As per the above discussion done on the basis of application of some business
management models, it can be identified that below mentioned are the recommendations that are
provided to Realfit in relation to strategic direction for the corporation:- Outside-In thinking on the basis of Inside-Out or Outside-In model Visionary approach in accordance with the different approaches to strategy
 Cost Leadership on the basis of application of Porter's Generic Framework
Out of the above alternatives for recommendations regarding strategic direction for the
company, it is acknowledged that Realfit should adopt visionary approach to strategy.
Justification behind the recommended option being the preferred choice
Visionary approach to strategy is recommended to Realfit as this encourages a firm to
innovate in terms of aspects such as products, services, markets etc. By implementing this
approach within the confines of Realfit, the firm would be able to facilitate product and market
expansion, thereby gaining a high stake at market place.
CONCLUSION
As per the above report, it can be concluded that business strategy lays the foundation for
a company to establish an effective goodwill and build large market share. In this regard, it has
been analysed that each and every firm operating as a part of economy has several options
available to choose from as the strategic direction. Some of the widely used models or techniques
in order to take decisions regarding the choice of strategic directions are acknowledged to be
Inside-Out or Outside-In model, approaches to strategy and Porter's Generic Framework. In this
regard, it has been analysed that visionary approach is an effective strategic option that can be
adopted by a firm as it keen on coming up with rapid innovations at due intervals of time.
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REFERENCES
Books and Journals
Abdel-Razek, R. and Alsanad, D.S., 2014. Auditing and comparing innovation management in
organizations. Global Journal of Business Research, 8(2), pp.49-56.
Chesbrough, H., Lettl, C. and Ritter, T., 2018. Value creation and value capture in open
innovation. Journal of Product Innovation Management, 35(6), pp.930-938.
Debruyne, M., 2014. Customer innovation: Customer-centric strategy for enduring growth.
Kogan Page Publishers.
Gebauer, H., Worch, H. and Truffer, B., 2012. Absorptive capacity, learning processes and
combinative capabilities as determinants of strategic innovation. European Management
Journal, 30(1), pp.57-73.
Holtzman, Y., 2014. A strategy of innovation through the development of a portfolio of
innovation capabilities. Journal of Management Development, 33(1), pp.24-31.
İplik, F.N., Topsakal, Y. and Doğan, O., 2014. Strategic innovation: An empirical study on hotel
firms operating in Antalya region. Advances in Hospitality and Tourism Research
(AHTR), 2(1), pp.16-29.
Pynnönen, M., Hallikas, J. and Ritala, P., 2012. Managing customer-driven business model
innovation. International Journal of Innovation Management, 16(04), p.1250022.
Rhéaume, L. and Gardoni, M., 2016. Strategy-making for innovation management and the
development of corporate universities. International Journal on Interactive Design and
Manufacturing (IJIDeM), 10(1), pp.73-84.
Sako, M., 2012. Business models for strategy and innovation. Communications of the
ACM, 55(7), pp.22-24.
Santoro, G.and et. al., 2018. The Internet of Things: Building a knowledge management system
for open innovation and knowledge management capacity. Technological Forecasting
and Social Change, 136, pp.347-354.
Seebode, D., Jeanrenaud, S. and Bessant, J., 2012. Managing innovation for sustainability. R&D
Management, 42(3), pp.195-206.
Semuel, H., Siagian, H. and Octavia, S., 2017. The effect of leadership and innovation on
differentiation strategy and company performance. Procedia-Social and Behavioral
Sciences, 237, pp.1152-1159.
Spieth, P. and Schneider, S., 2016. Business model innovativeness: designing a formative
measure for business model innovation. Journal of business Economics, 86(6), pp.671-
696.
Ungureanu, M., Pop, N. and Ungureanu, N., 2016. Innovation and technology transfer for
business development. Procedia Engineering, 149, pp.495-500.
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