Strategic Management
The emergent changes within the business community have led to an intensification of competitive forces. The Wal-Mart Corporation for instance faces fierce rivalry in both local as well as international markets from players such as French Carrefour or Americans Costco Wholesale and Target. Google faces competition from AOL, MSN and Yahoo!, while the players in the IT industry that challenge Apple’s position refer to Microsoft, Dell and Hewlett-Packard (Hoovers, 2009). Each of these players has employed aggressive strategies to defend their competitive advantages and improve their market positions (Hitt, Ireland and Hoskisson, 2009), but three of them are most notable. In the retail industry, Carrefour has implemented an expansionist course of action, which propelled it to the peaks of the European industry. Yahoo! diversified its offering in order to satisfy the growing needs of its customer base and Microsoft invested in its human resource to consolidate the company’s strength.
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The most outstanding incentive to diversification is the possibility to increase organizational success. Economic agents who diversify their product and service offering stand increased chances of better appealing to their customers’ needs and wants. In turn, a satisfied customer is a loyal customer that will provide the company with sustainable revenues. And aside from increasing the levels of satisfaction and loyalty of the already existent customer palette, diversification also increases the number of new customers by increasing the company’s ability to serve new needs. In terms of resources, the most important ones are the staff members, who benefit from new challenges that reduce the routine on the job and increase their professional satisfaction as well, all to culminate with superior levels of product and service quality, and consequently, increased organizational revenues.
References:
Hitt, M.A., Ireland, R.D., Hoskisson, R.E., 2009, Strategic Management: Competitiveness and Globalization, Concepts and Cases, 8th Edition, South-Western, Cengage Learning
2009, Hoovers, http://hoovers.com last accessed on May 19, 2009
