Strategic Business Analysis: Competitive Advantage and Collaboration

This report delves into the critical aspects of strategic business analysis, focusing on how organizations can gain and maintain a competitive advantage by considering both their market position and internal resources. It examines market-based strategies, including the Ansoff Matrix, and resource-based strategies, such as tangible and intangible assets, heterogeneous resources, and the VRIO framework. The report also evaluates the benefits and drawbacks of business collaboration, exploring advantages like shared expertise, resources, and promotional budgets, as well as the importance of collective decision-making and access to human resources. The analysis highlights the significance of strategic choices in achieving organizational success and navigating the competitive landscape, providing insights into effective market and resource strategies to ensure long-term sustainability and brand reputation.

Running head: STRATEGIC BUSINESS ANALYSIS
Strategic Business Analysis
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Author’s Note

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Question1. To what extent do you agree with the view that organizations need to consider
both their position in the market and their internal resources if they are to gain and
maintain a competitive advantage?
Competitive advantage is the favorable position of an organization that implies some
major strategies and policies in order to become a threat for its competitors. The primary purpose
of making competitive advantage is to perceive greater value to the target market more
effectively than the competitors. Greater value can be achieved by applying numerous strategies
such as providing better quality of products as well as services, lowering the price level of
products and increasing market effort by applying numerous promotional strategies and policies.
As per the opinion of Dunning (2015), in order to gain competitive advantage the organization
should focus on two major business strategies and policies based on which the business experts
would become a major threat for its competitors. The factors include implementing proper
market based strategy and using appropriate resource based strategy. The market based
strategies with the help of which organizations can retain their market position includes as
follows:
As per the concept of Ansoff Matrix model a business organization can follow four major
steps of retaining a constant demand in the current market. The stages include market penetration
strategy, product development strategy, market development strategy, diversification strategy.
Market penetration strategy:
Market penetration focuses on selling existing products to the existing customers. In case
of high market share of a specific company the business experts do not need to enhance their
target market. At that specific time, the market managers intend to make customer retention plan.

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The service providers aim to make an effective rapport with the existing customers so that they
do not intend to change their consumer behavior (Kirchmer 2012).
Product development strategy:
In many cases, it has been observed that competitors after implementing their innovation
strategies and policies give a major threat to a particular organization. As a result, the marketing
managers have to make different strategies and policies in order to regain the trust of customers.
Product development in the existing market is one of the most effective strategies for customer
retention (Rummler and Brache 2012). The business executives can render diversified products
within the business process. As a result, customers belonging to different geographical markets
would show their interest in purchasing the brands.
On the other hand, the product mangers intend to reduce the price range for drawing
attention of low cost customers. In this kind of situation, the number of target customers would
be enhanced automatically. In order to become a major threat for its competitors the business
managers would like to implement numerous business strategies and policies with the help of
which product can be developed (Lee, Olson and Trimi 2012). The marketing managers
sometime enhance their promotional strategies as well for drawing the attention of large number
of customers.
Market development strategy:
After making an effective product development strategy the marketing managers intend
to focus on market development strategy as well. Market development strategy implies
improving distribution channels, making more effective promotional activities, expanding the
geographic location, enhancing target market and so many. With the help of effective

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promotional activities the customers belonging to different geographical markets would be able
to show their interest in purchasing products as well as services (Amit, and Zott 2012). Market
development strategy is highly significant for drawing the attention of international customers
belonging to different geographical areas.
Diversification strategy:
Implementing varieties of product within the business process is highly important for
drawing the attention of large number of customers belonging to different geographical market.
Product diversification has been implemented within the business organization only when the
business experts intend to expand their entire process of business in different geographical areas.
This specific study has focused to make an in-depth evaluation on how the business
organizations would be able to maintain their market position.
Garrigos-Simon et al. (2012) stated that in order to maintain competitive advantage along
with gaining market position the business experts should have effective resources with the help
of which market based strategies can be implemented successfully within the organization. The
resource based strategies that the business experts can follow within the organization is as
follows:
Tangible assets:
In order to expand the entire process of business in different geographical boundaries a
specific business organization should have tangible resources such as Land, buildings,
machinery, equipment and capital. In order to draw the attention of customers a particular
organization needs to have a proper infrastructure with the help of which customers would like to
sow their interest in purchasing the products as well as services (McGrath 2013).

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Intangible assets:
Intangible assets imply Brand reputation, trademarks and intellectual property and so on.
In order to establish the brand in the international market own capital of a business organization
is not sufficient (García-Morales et al. 2012). The business experts have to make a good rapport
with banks so that the business experts can monetary help from the bank service providers while
expanding their entire process of business.
Heterogeneous:
The skill, capability and resource vary from one company to another. If a particular
business organization is able to enhance their internal resources based on the growth level of its
competitors the business experts are able to go towards the success (Amit and Zott 2012). In
order to survive the wings in the competitive market business experts have to focus on enhancing
their physical assets so that people belonging to different geographical boundaries show their
interest in using the products as well as services.
Immobile:
This particular strategy implies that the business resources should not be moved from one
particular place to another. As a result, the business executives may have to face internal
damages of physical resources. In this kind of situation, it is evident that mobility of internal
resources is not highly important for maintaining organizational sustainability (Lee, Olson and
Trimi 2012). Therefore, the business experts can maintain a consistency while using the physical
resources.
VRIO resources:

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Though immobile and heterogeneous strategies are sufficient enough in achieving
competitive advantages these are not all for maintaining sustainability of business resources.
VRIO framework believes that the business experts have to judge on how resources are valuable,
rare, costly to imitate and organized to draw the attention of customers. VRIO framework
believes that resources should have a proper value so that it can be helpful for achieving the
brand reputation (Rummler and Brache 2012). If the resources are costly enough the business
experts need to know how these resources should be preserved for maintaining brand reputation.
The resource should be used in an organized way so that the rate of waste can be checked.
Competitive advantages:
If the above resource based strategies can be followed properly in order to make a current
market position the business experts would be able to achieve competitors’ advantages. While
implementing effective market strategies a particular business organization should have
sufficient resources. Otherwise the customers would not like to show their attention in
purchasing the brands as well products (Kirchmer 2012). Numerous eminent scholars have
opined that gaining competitive advantage is highly necessary for gaining organizational image
and reputation. Implementation of effective resource based strategy as well as market strategy is
two major ways of sustaining the image of a particular business organization.
Question2. Evaluate the benefits and drawbacks of choosing to collaborate with other
businesses rather than competing with them
Collaboration with a business organization is possessed with numerous positive and as
well as negative impact. Numerous eminent scholars have showed their own point of view

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regarding the impact of business collaboration (Zikmund et al. 2013). The necessary benefits of
choosing business collaboration are as follows:
 Sharing experience, skill and expertise:
With the help of business collaborative the employees as well as the managers get scope
of sharing their skills, experience as well as expertise. As a result, the business managers would
be able to gain more confidence in handling any kind of sudden business crisis. On the other
hand, exchange of thoughts, views and ideas are very much beneficial in making more effective
business strategy and policy for an organization (Chen, Chiang and Storey 2012). Collaborative
business decision helps the business experts in gaining organizational image and reputation more
effectively. As a result, entire process of business is successfully able to expand their wings
beyond going the geographical market.
 Sharing physical resources:
In order to expand the business process in global market the business organizations need
to have sufficient physical resources based on which the needs and demands of the customers
can be fulfilled properly. Without having a proper infrastructure of a specific business
organization along with its intellectual and financial properties the customers would not show
their interest for using the products and services (Sharma, Mithas and Kankanhalli 2014). It is
difficult for a particular organization to gain sufficient organizational resources without making
collaboration with a specific business partner. Huge number of technological resources as well as
physical equipments is highly beneficial for a business organization for maintaining the
customers’ needs and demands in the current market.
 Making big budget plan for business promotion:

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It is undeniable that making an effective promotional activity is one of the most important
factors for drawing the attention of customers. It has been observed however that business
experts fail to invest large amount of money for the business promotional purpose due to the lack
of economic strength. In this kind of situation, business managers have decided to make a
collaboration plan so that promotional budget can be extended (Austin and Seitanidi 2012). The
business experts can improve their distribution channel for promoting the products beyond going
the regional geographical markets. Digital media or new media can be used in order to draw the
attention of international customers. Therefore, business collaboration is highly important with
the help of which business managers can invest large amount of money for maintaining
promotional activities by utilizing the popularity of new media.
 Collective decision making:
In a specific business organization the business managers have to face innumerable
difficulties while making an effective business plan regarding the further progress. If the
business experts after making collaboration tend to share their thoughts, views and ideas the
decision making process becomes stronger. People do not have to face difficulties in overcoming
any kind of sudden crisis faced by the organizational managers. Sakarya et al. (2012) stated that
collective decision is always effective for overcoming major crisis of a business organization.
The business managers tend to show their systematic outlook towards each other while
making collective decision. They tend to share a good rapport with each other after making
collaborative decision. This particular factor leaves a major impact on the overall performance
level of a business organization. Managers along with the employees intend to provide their best
effort for satisfying the needs and demands of the customers (Corsaro et al. 2012). Therefore, the

8STRATEGIC BUSINESS ANALYSIS
organization tends to face a major revenue growth due to the collective decision making of
business managers.
 Larger support from the human resources:
In order to make a balance between customers’ supply and demand the business
organizations have to focus on sufficient workforce strength. It has been observed on some cases
that organizations fail to provide effective services to the customers due to low rate of workforce
strength (Chang and Graham 2012). It has been observed at the same time that collaboration with
a specific business organization is very much effective in getting sufficient number of human
resources. Business experts do not have to face innumerable difficulties in providing services to
the customers after having sufficient number of human resources within the organization.
Tai Tsou (2012) stated that business collaboration is possessed with some of the major
negative impacts as well. It has been observed that after making effective business collaboration
the business experts failed to maintain the performance level of employees. As a result, the entire
process of business wings has faced a disastrous consequence. The necessary disadvantages that
business experts have to face after making business collaboration are as follows:
 Communication problem:
As stated by Hughes and Kitson (2012) work culture differs from one particular company
to another. In order to run a particular business organization employees are accustomed with
different kinds of work culture within the organization. In this kind of situation, while making
collaboration with the business organization employees have to face difficulties in getting
accustomed with each other’s cultures. Cultural barrier, religious barrier, linguistic barrier leave
major impact on the overall performance level of organization in general employees in particular.

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As a result, the revenue growth has been affected due to the low performance level of the
organization (Omar, Leach and March 2014). Therefore, communication problem is one of the
most effective issues due to which business organizations fail to make a good rapport with the
business collaboration.
 Difficulties in making business decision:
Due to communication barrier managers fail to make an effective interaction with each
other. Business managers from two different organizations have to face difficulties in making an
effective interaction with each other. In this kind of situation, organizational experts fail to make
effective business decision (Victor Chen et al. 2013). If the business managers fail to make
proper decision regarding achieving the business success the entire process of business loses its
systematic rhythmic flow. As a result, the revenue growth of business organization after making
an effective communication has been highly affected.
 Challenges in implementing new business plan:
Before implementing a proper business plan the managers have to communicate with
each other. Along with linguistic barriers the business managers have to face innumerable
difficulties in maintaining psychological bonding (Chang and Graham 2012). While taking a
collective decision the business managers face immense psychological barrier at the workplace.
In this kind of situation, the administrators have to face difficulties for coming into a proper
solution (Chang and Graham 2012). Collaborative business decision making would be very
much effective only when the business managers do not face any linguistic barrier at the
workplace. This specific study is very much effective with the help of which some of the major
barriers in implementing new business plan have been highlighted.

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 Lack of performance among the people of diverse cultures and attitudes:
Employees in a collaborative business are from different geographical boundaries and
attitudes (Austin and Seitanidi 2012). While maintaining a collaborative performance the
employees have to face communication barrier. Due to the linguistic challenges employees fail to
exchange their necessary information with each other. Customers have to wait for a long time
while receiving the services (Chen, Chiang and Storey 2012). In this kind of situation, customers
show their intense dissatisfaction in purchasing products as well as service. This specific study
has focused to make an in-depth critical evaluation on how employees of diverse cultures and
attitudes have to face innumerable barriers while providing necessary services to the
organization.

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