RMIT BUSM4547: Management Report on Market Competition and Resources

This management report investigates the challenges of market competition and resource scarcity faced by businesses, particularly small and medium enterprises (SMEs). It begins by formulating a research question: Can SMEs effectively tackle market competition from larger rivals through improved marketing and resource utilization? The report then provides background information, analyzes the management problem, and reviews relevant literature, including works by Almond (2017), Prasanna et al. (2019), and others, to understand the impacts of competition on businesses. The report highlights internal and external factors contributing to these challenges and the consequences of inaction. The report proposes the 7S framework and the Ansoff matrix as effective analytical tools for developing competitive strategies. The report also examines real-world examples of business failures due to competition, such as Home-fix and Sasa. The report concludes by emphasizing the importance of addressing competition to improve productivity, profitability, and long-term stability, while also recognizing the need for better networking and resource accessibility for SMEs. The report aims to contribute to the understanding of competition and to the development of effective competitive strategies.

Running head: MANAGEMENT REPORT
MANAGEMENT REPORT
Name of the Student
Name of the University
Author Note

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Executive Summary
The study analyses and evaluates a management problem and provides
recommendations concerning the solution for the same. The management problem selected is
competition in the market and resources. The purpose is to find whether organizations can
benefit from implementing effective strategies to tackle competition. The introduction has
been provided. Moving forward, the management problem has been analysed with respect to
the background information. The literature concerning the problem has been reviewed. The
7s model and the Ansoff matrix have been selected as the most effective tools to tackle
market and resource competition.

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Table of Contents
Introduction................................................................................................................................3
The management problem..........................................................................................................3
Understanding the management challenge.............................................................................3
The research question.............................................................................................................5
Literature review........................................................................................................................6
Possible Analytical tools and models.........................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................12

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Introduction
The report is focused towards the effective analysis of a management challenge and
providing subsequent recommendations concerning the same. The management challenge
that is being considered is completion for business, market’s attention and resources. The
study focuses on the effective analysis of the challenge by primarily forming a research
question. Moving forward, the research question would be analysed in consideration of some
textual evidences that support it. The study also depends on various previous pieces of
literatures to develop the analysis. It is important to understand the identified problem in light
of the contemporary business situations. Businesses of today have to operate in environments
that are constantly affected by competition in the market. The competition in market and
resources become very important in view of the market operations of any organization. The
study has focused on studying extensive literature concerning the management problem that
has been selected. It is important that the various perspective that have been provided on the
basis empirical evidences are provided in the report. The synthesis of the previous pieces of
literatures have helped in the effective development of the study. Competition in the market
as well as for resources tend to determine greatly, the performances of the various
organizations. In the long run this becomes further important for the survival of any
organization.
The management problem
Understanding the management challenge
The management challenge that has been selected for the study is the competition that
exists for market and resources. The major challenge is that in the increasingly competitive

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market conditions create significant challenges especially for the small and medium sized
enterprises to develop their business.
There are various internal and external factors that can be responsible for the
challenges. Internally, the major factors are labour, capital and resource utilization.
Organizations might not have the available labour forces to improve productivity levels to a
degree that is required to tackle competition. Lack of capital can result in limited access to
resources. Resource utilization mechanism of the organization might not be at par with the
larger competitors. The major external factors that can contribute to the problem are the
degree of market competition, the market share and size of the competitors and the
availability of resources.
It is important to tackle the challenges that arise due to competition. The
consequences if the problems are not solved include lack of development, lower profitability
and ultimately the failure of business.
However, the benefits that can be gained by effectively tackling marketing and
resource competition effectively are plenty. Some of the major benefits are improved
productivity and performance, increased profitability and achievement of optimal growth
potential. The organization would greatly benefit from the competitive edge gained. They
would be able to realize newer markets and expand to become larger enterprises. Present and
future stability would also be ensured for the organization.
There are many hurdles to solving the problem. A major problem is the lack of
relevant information. Rivals keep their business information secret in order to protect their
competitive advantage. Another major challenge is the inability of the small and medium
sized businesses to engage in better business networking. Some of the larger sized
competitors have greater mobility when it comes to networking. They can easily have better

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accessibility to the resources. A major challenge is resource scarcity. The resources
themselves might be scarce enough for the smaller enterprises to have very limited
accessibility. Lack of effective communication mediums can be another significant hurdle.
An example of business failure due to increased competition can be given of the
Singapore brand, Home-fix. The DIY retail brand eventually closed down due to competition
from much larger brands like IKEA. Another major such business failure was Hong Kong
based beauty retail brand, Sasa. The company was unable to position itself properly in the
market and had to stop operations due to falling behind all major competitors.
The report can help in solving the competition problems as the findings can contribute
towards understanding the nature and extent of the issues better. The extensive nature of the
report can help in understanding competition better and lead to the development of better
competitive strategies.
The research question
In view of the challenge and the various factors that tend to affect it, a research
question has been formulated.
The research question is: Can small and medium enterprises be effective in tacking
market competition from larger rivals through the development of better marketing and
resource utilization strategies?
The research is being done on the basis of previous literature that focus on the
competitive factors that affect smaller enterprises. The analytical tools that would help in
further analysis of the subject matter are 7S framework and the Ansoff matrix. These would
help in the effective evaluation of the subject matter.

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Literature review
The previous pieces of literatures have focused on the topic of market and resource
competition that can lead to the ineffectiveness of business strategies. Past literature have also
dealt with the prospects of business development within the constant competitive factors that
tend to affect all business organizations. According to Almond (2017) the competitive nature
of businesses in the present corporate scenarios create various social issues like labour
inequality and improper job allocation. It is important to note that human resource is one of
the most important resources required by any organization. The larger corporations are more
effective in procurement and utilization of better human resources. As opined by Prasanna et
al., (2019) SMEs are falling behind in the development of sustainability due to the increasing
competition in the markets. It is important to note that global trade has been said to be a
major factor that has led to the challenges that are faced by various organizations. According
to Guo, Yu and Gimeno (2017) a major factor that leads to increased pressure in a
competitive market is communication barrier. A major challenge is communicating
effectively to the target market in order to gain effective competitive edge. These are
challenges that have been faced by new entrants into the global markets. According to
Gnyawali, Madhavan and Bengtsson (2016) market cooperation is much required by various
organizations to tackle competition effectively. It is important that the paradoxes that exist
between organization cooperation and competition are understood. Many times conflict of
interests leads to the formation of ineffective business networks for various organizations. As
opined by Davcik and Sharma (2016) marketing resources are sometimes ill defined, leading
to the ineffective performances of the organizations as a result of their inability to gather
resources that they require. According to Stagni, Santaló and Giarratana (2016) resources are
being mis-utilized by various larger organizations, such that the smaller organizations are
being unable to access similar resources to increase productivity. This is a major challenge,

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identified for the smaller enterprises. As opined by Gulley, Nassar and Xun (2018) one
effective way of tackling resource challenges is optimal utilization of environment friendly
and sustainable resources. It is important that these resources are utilized judiciously to
develop the performance potential of organizations.
There seems to be a convergence of views regarding the fact that the market and
resource competition challenges are related. This means that both these challenges stem from
the fact that increased competition causes fluctuations in resource availability. This means
that retrospection is required to develop the organizational standards that can help to achieve
optimal resource utilization. The literature has helped to gain much important insight into the
identified problem. It is important to view the literatures in relation with the issues that have
historically affected the market issues pertaining to the various business organizations. The
researches provide contextual evidences that focus on how market competition have affected
the smaller organizations and their business development prospects. The discussions of the
researches have helped to derive better implications concerning the development of
organizations through tackling business environment problems.
There are various inter-disciplinary ideas that are presented through the researches.
These ideas are primarily concerning the development of competition in view of the
economic aspects that tend to affect the market development. Resources and market
competition are related and often interact with each other to create market economies. Proper
resource allocation and utilization by the government also becomes an important part of any
national development. This leads to the effective functioning of the organizations that form
part of its market economy. Hence, economic studies as well as political factors can be
greatly responsible for the competitive market situations that can be present within a certain
maket environment.

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There are some significant knowledge gaps that exist within the pieces of literatures
that are available presently. One important gap is that no concrete solution is provided for
small and medium enterprises concerning the effective tackling of competition oriented
challenges. The findings derived from the literatures are rather directives concerning what
needs to be done for tacking heavy competition. Some of the previous studies have provided
the example of other organizations and how they have tackled the competitive situations.
However, market situations and competitive environments vary and one solution might not be
applicable for all the situations faced by different organizations.
The previous studies, despite some of their limitations, have provided important
insight into the competitive prospects for organizations in the future. The studies help to
understand that the value of development that can be achieved for any organization depends
on how it can approach the competitive factors that affect its business. It is important to view
the previous studies in light of how it can help the upcoming researches. The management
can understand about the basic elements that are related to competitive organizational
situations. At the same time it is also important that the management takes notice of the
values that are associated with business development in highly competitive environments.
Some empirical evidences can be provided to look further into the competitive factors
that guide organizational development. The evidences provided in the literature are that of
Nokia and IBM. These companies witnessed dramatic fall in their productivity as a result of
falling behind in market competition. Nokia was unable to capture the market of android
mobiles. IBM was unable to capture the market of the personal computer resulting in their
rapid downfall.
The ideas that were presented in the literature would be important in understanding
the competitive environments that can arise in the future. Moreover, it would help to

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understand the nature of competition that can take place concerning market and resources. It
is important to evaluate the circumstances that the organizations tend to face and take
necessary steps to tackle the situations.
Possible Analytical tools and models
There are various analytical tools that can be utilized to further evaluate the problems
that arise for organizations concerning competitive environments. It is much important to
view the situation with respect to how companies would be able to tackle the situations that
the face. Two important analytical tools or models that can be used to tackle competition for
the organizations are, 7S framework and the Ansoff matrix.
The 7S framework was provided by McKinsey. It is a framework that has been
created to develop organizational efficiency and productivity over large functional areas of
management. The model can help organizations to develop strategies that can be used to
tackle competition that exists in the market (Putra et al., 2019). There are two principal
elements that are associated with the 7S model. These are the hard elements and the soft
elements. Three important hard elements are strategy, structure and systems. The soft
elements are shared values, skills, style and staff. The hard and soft elements interplay with
each other to determine organizational efficiency. It is important that the competitive
strategies are undertaken in more holistic approaches through the 7S model. Hence, strategy
of the organization need to be associated with the structure that the organization wants to
follow. Moving forward the same needs to be aligned with the systems that comprise the
daily activities of the organization. Next come the shared values of the people within the
organization. The style of organization, the right amount and quality of staffs and the right
skills should be utilized to develop an effectively performing organization. The 7s model is

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important as it takes into consideration all the important elements that are associated with the
development of competitive strategies.
The Ansoff matrix becomes important as it helps the organization to understand more
about the competitive element that are connected with the market. It is called the product
market expansion grid. The matrix is a quadrant that has four essential parts. One part is the
market development, the other part is diversification and the two lower parts are market
penetration and product development (Yin 2016). The four areas of decision making can help
to develop better strategies to tackle competition. The entire matrix is dependent on the new
and existing markets. Market development segment considers the target differentiation, sales
channel and the marketing mix. The diversification segment considers the possibilities for the
expansion of the business. This takes into consideration that when one business may be
affected by adverse situations, the other can remain intact. Market penetration concerns the
development of market strategies. These are very important in view of the competitive market
situations that are existing. Competition can be effectively tackled through the introduction of
loyalty schemes, increasing sales force and buying smaller competitor companies. The last
segment is the product development segment. This involves the creation of variations of
products to improve the product offerings, development of the related products and reduced
timing for product improvement. The matrix is very important for the organizations that are
tackling competitive environments in their respective industries. The matrix can be
effectively utilized to develop the performances by keeping in mind the strategies that are
important in tackling all forms of competition. In essence, the two models are very important
in determining organizational productivity and functional effectiveness in the middle of all
the competitive factors that affect them.

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Conclusion
The conclusion that can be drawn from the effective analysis of the subject matter is
that competition, whether concerning the market or the resources can be very damaging for
organizations if it is not tackled effectively. The research question was formed by analysing
the most important elements that were connected with the development of an organization in
highly competitive environments. The management of competition was found to be very
important for various organizations as being unable to tackle competition can result in the
organization losing its operational value. The literature review pointed to the fact that
competition was a major problem for organizations that even had significant implications
concerning the economic growth of any country. The 7S framework and the Ansoff matrix
were found to be very important in view of the strategy development that they contributed
towards. The implications of the report point towards the fact that any organization can
benefit from effective tools of strategy formation that can help it to gain competitive edge in
the market.

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References
Almond, P., 2017. The persistence of, and challenges to, societal effects in the context of
global competition. In Making work more equal. Manchester University Press.
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.
Gnyawali, D.R., Madhavan, R., He, J. and Bengtsson, M., 2016. The competition–
cooperation paradox in inter-firm relationships: A conceptual framework. Industrial
Marketing Management, 53, pp.7-18.
Gulley, A.L., Nassar, N.T. and Xun, S., 2018. China, the United States, and competition for
resources that enable emerging technologies. Proceedings of the National Academy of
Sciences, 115(16), pp.4111-4115.
Guo, W., Yu, T. and Gimeno, J., 2017. Language and competition: Communication
vagueness, interpretation difficulties, and market entry. Academy of Management
Journal, 60(6), pp.2073-2098.
Prasanna, R.P.I.R., Jayasundara, J.M.S.B., Gamage, N., Kumara, S., Ekanayake, E.M.S.,
Rajapakshe, P.S.K. and Abeyrathne, G.A.K.N.J., 2019. Sustainability of SMEs in the
Competition: A Systemic Review on Technological Challenges and SME
Performance. Journal of Open Innovation: Technology, Market, and Complexity, 5(4), p.100.
Putra, R.P., Syah, T.Y.R., Pusaka, S. and Indradewa, R., 2019. Human Resources
Implementation Using the McKinsey 7S Method for Business Startup: Duck Nugget Frozen
Food. Journal of Multidisciplinary Academic, 3(3), pp.11-14.

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Stagni, R.M., Santaló, J. and Giarratana, M., 2016. Product-market Competition and the
Redistribution of Resources in the Multi Busioness Firm. IE Business School.
Tan, A. (2019) 8 Retail Brands In S'pore That Didn't Survive 2019 - What Went
Wrong?, Vulcan Post. Available at: https://vulcanpost.com/684051/singapore-retail-closure-
2019/ (Accessed: 26 February 2020).
Yin, N., 2016. Application of AHP-Ansoff matrix analysis in business diversification: The
case of Evergrande Group. In MATEC Web of Conferences (Vol. 44, p. 01006). EDP
Sciences.