Competitive Advantage and Strategic Options

The provided document is an academic assignment that delves into the topic of competitive advantage and strategic options in a business context. It discusses the importance of internal and external resources, human capital, and innovation in achieving a competitive edge. The assignment also touches upon the role of technology and machines in manufacturing organizational products, customer satisfaction, and core competencies.

STRATEGY, ENTERPRISE & INNOVATION
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Executive Summary
The current report on strategy, enterprise and innovation is centred on the ways in which an
organisation can enhance and expand its business in an innovative and strategic manner. In this
respect, the organisation Matalan, a retail entity of UK market has been chosen. The report has
demonstrated the importance of analyzing external environment in taking effective strategically
decision in an organisation. In this respect, the strategic capability and its relation with external
environment of an entity have been assessed. On the other hand, in this very report, a set of
diverse options regarding the strategic choice of the relevant organisation have been surfaced. In
order to increase entrepreneurial opportunities more than one strategic option has been presented.
The whole report has surfaced that, choice of appropriate strategy is immensely significant for an
organisation to achieve its organisational goals and objectives in a strategic manner.
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Table of Contents
Introduction......................................................................................................................................3
Section 1..........................................................................................................................................3
External environment and strategic capabilities..............................................................................3
a) Internal resources and capabilities of organisation in competitive advantage.........................3
b) Influential factors of external environment and their impact on entrepreneurial activities.....5
c) Influence of competitive forces in relation to profitability and entrepreneurial activities.......7
Section 2..........................................................................................................................................8
a) Strategy options for enhancement of entrepreneurial opportunities........................................8
b) Justification of strategic choice...............................................................................................9
Conclusion.....................................................................................................................................10
Reference List................................................................................................................................11
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Introduction
In order to access success in establishing a business, innovation and creativity needs to be
enhanced. However, proper strategy needs to developed and implemented. In addition to that,
different internal and external forces influence the organizational success in marketplace, which
directly impacts on the organizational procedures and process.
This discourse highlights the SME of UK, namely Matalan, a retail industry, in order to analyse
the business innovation and creativity in a concrete manner. This critique demonstrates the
internal and external resources of organisation with reference to influence of competitive forces.
In addition to that, this discourse highlights the strategy option and solutions, which can help to
access entrepreneurial opportunities in the business.
Section 1
External environment and strategic capabilities
a) Internal resources and capabilities of organisation in competitive advantage
In order to gain competitive advantage, an organisation needs to analyse the internal resources of
the business in a proper manner. Internal resources of an organisation include the financial
resources, human resources, technology and brand image of organization. On the other hand,
organisational capabilities help the organisation to maintain and manage the processes and
organisational procedure in order to enhance the organisational performance. In the view of Nan
and Tanriverdi (2017, p.946), different resources of an organisation helps them to gain
competitive advantage and thus to gain high sales and revenue.
The organisational internal resources of Matalan, which helps them to gain proper organisational
performance, are:
Financial resource
Financial resource is the basic need in order to process the overall activities within an
organisation. In the view of Kotabe and Kothari (2016, p.732), lack of financial resources will
create barrier in delivering of organisational process which can influence the organisational
performance. Matalan maintains the financial resources in a concrete manner in order to manage
the possible risks and thus delivers their organisational services in a proper manner. According to
Saeidi (2015, p.345), delivering of organisational services to the customers are done on the base
of customers demand, which cannot be fulfilled without having proper amount of financial
resource.
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Physical Resource
Physical resources of an organisation include the products, services, technical equipments and
other such physical resources. Matalan delivers the innovative and attractive products to their
customer with high quality services, which helps them to satisfy the customer needs and
demands.
In addition to that, as Matalan provides the services of online shopping, thus it adds competitive
advantage in a positive manner. As commented by Goetsch and Davis (2014, p.56), in order to
satisfy the customers and gain competitive advantage, physical resources of an organisation
needs to be properly enhanced, in order to deliver quality and innovative products which can
satisfy the customers.
Human Resource
In the view of Campbell and Park (2016, p.512), human resources are one of the effective
internal resources of an organisation which helps to gain competitive advantage and to achieve
the organisational goals and objectives. On the other hand internal employees of Matalan helps
to plan for the competitive strategy, product develops to the all other organisational activities in
relation to achieving the organisational goal through proper skills and knowledge.
In addition to that in order to achieve the organisational goals and objectives, Matalan provides
training to their employees which helps them to understand their roles and responsibilities and
thus to deliver quality services (Matalan, 2017).
Competencies
Other than the organisational internal resources, the capabilities and competencies also helps to
gain competitive advantage. In the view of Barney (2015, p.290), human resource capability
helps to gain effective skills in order to deliver quality products which helps to gain customer
satisfaction.
With the gaining of customer satisfaction and high selling Matalan achieves high revenue and
sales which helps them to maintain their organisational activities with proper financial
capabilities. On the other hand, physical capabilities help Matalan to add attractiveness through
innovative and attractive products delivery to the customers which are done through physical
capabilities and human resource capability and thus gains financial capability for the
organisation.
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b) Influential factors of external environment and their impact on entrepreneurial
activities
Different external environmental factors influence the organisational behaviour and procedures.
In order to analyse the influential factors of external environmental factors of Matalan, PESTLE
can be approached. The model of pestle includes five different factors which might influence the
entrepreneurial activities in an organisation, such as:
Political
Political and regulatory issues can influence the organisational work process. As Matalan
delivers their products and service to different countries via online medium, thus the organisation
maintains different regulations, based on the countries they market. Any legal changes in terms
of business might influence the business, such as extra tax of GST and others. Entrepreneurs
need to places changes in price in relation to the currency fluctuations and concerned taxes.
Economical
Economical factors such as exchange rates, import rates and other such economic factors
influence the organisational procedures, in relation to the delivery of products and services. On
the other hand, market routes of the organisation also contribute as the influential factor for
organisation. In order to avoid the economical barriers, the entrepreneurs might have to stop
business in other such areas or have to places changes in the product and service delivery (Trong,
2017, p.310).
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Figure 2: PESTLE Model
(Source: Created by learner)
Social
Social factors such as consumer behaviour in relation to the product, culture and beliefs of
customers might influence the organisation procedure, in terms of customer satisfaction. Some of
the customers might have buying behaviour of low priced products or some have high quality.
Thus, the entrepreneurs need to develop the products considering customers from all buying
behaviour.
Technological
Poor equipment and technology might lead to development of poor product in terms of
innovation and attractiveness. Thus, the entrepreneur needs to spend financial resources in terms
of approaching and implementing advanced technology, which can help to gain competitive
advantage and customer satisfaction.
Legal
Legal requirements of different countries possess different needs and thus the organisations have
to maintain the legal business rules of different marketing routes. Matalan works with different
countries and considers their legal rules in term of delivering products.
Environmental
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PESTLEPoliticalEconomicalSocialTechnologicalLegalEnvironmental

Environmental changes such as different geographical region need different products and
services, such as Matalan offers different clothing for different environment based on the
customer's choice. Thus, Entrepreneurs need to consider different requirement of products in
relation to environment.
c) Influence of competitive forces in relation to profitability and entrepreneurial activities
In order to analyse the competitive forces, Porter’s five forces model can be approached. An
organisation might have different competitive forces, such as:
Figure 1: Porter’s Five Forces of Competitive Model
(Source: Created by learner)
Bargaining powers of Customers
Bargaining powers of customers can influence the price of products. Customer’s buying
behaviour might change based on the price of products, thus an organisation with high priced
products might have to face sales and customer satisfaction barrier.
Bargaining powers of Suppliers
The price and supply of raw materials, labours and other required materials by the suppliers
might create competitive force in the organisation. If the suppliers refuse to work with the
organisation, it might create force for the concerned organisation.
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Threat of existing substitutes
Exiting substitutes which are already in the marketplace can have different customers and brand
image, which might create competitive force to an organisation with the same substitute in terms
of sales, revenue and brand image.
Threat of new entrants
New entrants might create competitive force in the marketplace, as it might place innovative and
unique strategy with proper pricing, which can help to attract the customers from other different
existing organisation.
Section 2
a) Strategy options for enhancement of entrepreneurial opportunities
In order to increase the entrepreneurial opportunities, Matalan can approach two different
strategic options:
Business area expansion
As Matalan is online retailer company in the UK market place and provides its access to other
different countries via online medium, thus it can expand their business in other different
countries through approaching other strategy rather than the online appearance. In the view of
Fleisher and Bensoussan (2015, p.52), expansion of business in other geographical area of
different countries can help to gain more numbers of customers and competitive advantage.
In terms of Matalan, the organisation can expand their market through approaching physical
evidenced stores in other different country. As it is an UK based organisation, thus it might face
barriers in terms of legal requirements and rules of different countries in terms of establishing the
physical stores in other countries. However, on the other hand, establishment of physical stores
in other different countries can help them to gain new customers and thus to increase and
enhance their sales and revenue generation. In addition to that, approaching the strategic decision
of establishment of physical stores in other countries can help them to gain entrepreneurial
opportunities of marketing in different countries.
Business diversification
Another strategic option, which can be approached by Matalan in order to gain the
entrepreneurial opportunities, is business diversification. As Matalan provides the products
ranges of clothing, lights and home ware products, thus it can venture into products in their
organisation in order to expand their product and service diversification. Approaching both the
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approaches of product diversification and market expansion can help to gain high number of new
customers and retention. However, on the other hand, as Davcik and Sharma (2016, p.5548) has
commented that, implementation of new product in an organisation needs to be properly
promoted through different mediums. Therefore, Matalan needs to advertise their new products,
in order to gain the opportunity of strong brand image and dissemination of information about
the concerned and implemented products.
b) Justification of strategic choice
The chosen strategic options in order to gain entrepreneurial opportunities needs to be suitable
and analysed properly. Justifications in terms of choosing the concerned strategic options for
Matalan are:
Suitability
In terms of suitability, the organisational objectives and aim of Matalan needs to be concrete in
terms of approaching the strategic options. On the other hand, effective strategic option in the
organisation can help to gain efficiency of the organisation. The expansion of Matalan will be
suitable for the organisation, as it can effectively manage the productivity and efficiency of
products. On the other hand, approach of product diversification can also be suitable for the
organisation, as it can help to deliver different varieties and diversified products at different
places through physical and online shopping. Moreover, both the approach is suitable in terms of
gaining large numbers of customers at a global level and thus to increase sales and revenue
generation with reference to strong brand image.
Acceptability
In the view of Gates (2016, p.211), acceptability of the strategic options will include the
acceptance of options from the stakeholders of the organisation. As the business expansion of
Matalan will help to market at other different places and thus might help to gain raw materials at
lower rate than UK, thus it can be acceptable for the organisation. In addition to that, the
organisation can gain higher revenue and brand image at the other places, thus can help to
enhance financial capability. On the other hand, implementing the strategic option of product
diversification can help to gain more sales in terms of selling the products to varieties of
customers of different needs and demands. Thus, as both the strategic options can help to
enhance the sales and revenue with gin of large numbers of customers from different countries,
thus, it will be acceptable as the strategic option for gaining entrepreneurial opportunities.
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Feasibility
Feasibility is referred as the having proper resources in the organisation, which might influence
the organisational process and procedures effectively. In relation to the feasibility option for
Matalan, the strategic option of business expansion can be feasible as expansion of business in
different countries at global level will help them to gain high skilled human resource, such as
employees, suppliers and other labours. Thus, it can be said as the feasible strategic option for
Matalan. In the view of Rothaermel (2015, p.42), expansion of business at global level helps to
recruit different employees from, different countries of high skills and knowledge, and thus can
help them to improve and place innovative ideas in the products and services, which ultimately
enhances the effectiveness and performance of organisation.
On the other hand, approaching the strategic option of product diversification can help to gain
financial capability as a resource and human capability from different countries. On the other
hand, Matalan can gain the advantage of different cultural diversification and financial resource
through gaining more customers, which can help to increase sales. Thus, it can be said that, both
the strategic option of product diversification and business expansion possess suitability,
feasibility and acceptability.
Conclusion
Implementation of innovative creativity and ideas in the business can help to gain competitive
advantage over the existing rivals, present in the marketplace. On the other hand, approaching
advanced technology and machines in order to manufacture the organisational products help
them to gain customer satisfaction and thus to gain competitive advantage over the other clothing
retailer organisations in the marketplace. Internal analysis of an organization includes both the
resources and capability in order to gain the advantage of strong competitiveness and core
competencies. Human resource includes all the employees of an organisation and other different
stakeholders, which helps in the development of organisation either directly or indirectly. On the
other hand, the strategic options needs to be approached based on the feasibility, suitability and
acceptability of the organisation.
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Reference List
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Entrepreneurship and Small Business, 27(4), pp.505-524.
Davcik, N.S. and Sharma, P., (2016). Marketing resources, performance, and competitive
advantage: A review and future research directions. Journal of Business Research, 69(12),
pp.5547-5552.
Fleisher, C.S. and Bensoussan, B.E., (2015). Business and competitive analysis: effective
application of new and classic methods. London: FT Press.
Gates, B., (2016). 6 Strategic options—business and functional levels. The Strategic Planning
Process: Understanding Strategy in Global Markets, p.205-215.
Goetsch, D.L. and Davis, S.B., (2014). Quality management for organizational excellence.
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