Research Korner: Strategic Management Essay Samples

Strategic Management: The Case of eBay

Strategic Management: The Case of eBay     1.0 Introduction With achieving sustainable competitive advantage as the goal, organisational changes are considered to be an important part of the development process of a particular company. Aside from globalisation, technology also plays an important role in the changes among modern organisations. Technological boom, specifically through the dotcom and World Wide Web, had become one of the inevitable ways in obtaining a wealth of information about a certain issue or topic. For the organisations, the Internet was perceived to be a significant avenue for doing business and marketing per se such as being done by eBay with their online auction. Individuals are able to obtain and purchase their needed and wanted items directly, without the hassle of traveling and physically looking for the products through online auctions. Strategies are deemed important in responding to various internal and external threats and problems which can directly and indirectly impact organisational decision making. This report purports to present and discuss the case of eBay through investigating the strategies that the company employs. Likewise, the paper will also address the building blocks unique to the company. How eBay operates despite the fierce competitive nature of online auctioning business will also be addressed.      2.0 Company Background Founded on 1995 by Pierre Omidyar, eBay was considered a pioneer in the online auction industry whereby people are brought together on a local, national and international basis to serve the purpose of creating a person-to-person community where ever individual could have an equal access through the same medium which is the Internet. eBay offers wide varieties of products and services for bargain hunters, hobbyists and collectors and sellers, changing the way people engage in trading hence eBay had changed the face of e-commerce from its inception. eBay participates in the demand-based or dynamic pricing segment of online commerce where transaction prices are determined entirely by buyers. The auction is the most familiar form of demand-based pricing (Bunnell and Luecke, 2000, pp. 8-9). As Bunnell and Luecke (2000) put it, eBay has become the world's leading auction market and one of a handful of major dotcom companies to actually turn a profit while also expanding the e-commerce industry (pp. 4-6). Today, eBay is continuously the brand preference with over 39 market presence and with $60 billion of the total value of sold items on the site’s trading platform.   3.0 Current Strategy of eBay Basically, eBay introduced several crucial innovations tailor-made for the internet at the business level, a strategy which was conceived to be an improvisation. One being the online auction business model wherein eBay served as the value-added facilitator of trade between a buyer and a seller in a highly individualistic manner. The online auction model developed by eBay marked an important extension of e-commerce, offering millions of individuals a low-cost opportunity to engage in a new type of economic activity. Gomes- Casseres (2001, p. 2) firmly believes that eBay had built an online person-to-person trading community in the Internet. In addition, there had been a growth in the organisational structure which was primarily manned by Pierre as the visionary and his colleague Jeffrey Skoll as the strategist and then further growing to include Meg Whitman and other teams, striking a balance between over- and under-structuring. The integration of new systems and practices was seen to be a way to creating value than just focusing on efficiency of the people and the processes with further focus on internal innovations (Brown and Eisenhardt, 1998).   Throughout the history of eBay, regeneration and experimentation were both inherent, which were seen to be instrument of innovative processes and responding to competitive schema. EBay had developed proprietary software capable of supporting a robust, scalable user interface and transaction-processing system which can handle all aspects of the auction process. EBay users can browse through listed items in a fully automated way. The sellers are allowed to list items that they want to sell while the buyers bid on items of interest. The items on eBay’s site are arranged by topics and each type of auction has its own category. It sends e-mails when users register for the service, when they place a successful bid, and when they are outbid, and it communicates the outcome of auctions in which they participate. The same system sends daily status updates to active sellers and bidders and maintains user registration information, account information, current auctions, and historical listings. All of this information is archived to a data warehouse.   Further, eBay has been bounded by two things: a clear mission to be the world's largest person-to-person online auction company, and a focused strategy with five key elements: expanding the user base, strengthening the eBay brand, broadening the trading platform by increasing product categories and promoting new ones, fostering community affinity and enhancing site features and functionality. EBay must realised to live in the present and so strategies must be refreshed and realigned basically through clarifying the purposes of the company itself. Priorities and responsibilities must be well-established (Brown and Eisenhardt, 1998) and for eBay, there are three main strategies implemented which are: building strategic partnerships at all levels of value chain, seeking customer feedbacking and working on with the information collated and monitoring the external environment. Within eBay, functions were further subdivided intended for overseeing strategic direction and growth, business model and site development and community advocacy as well as strategic planning and analysis, competitive analysis, new business planning and incubation and customer support operations.   When Whitman arrived in 1998, brand building recognition at eBay was prioritised. The related problems of consumer product marketing were divided into two: first was clarifying what eBay stood for by which in their judgment is a personal trading community and second, brand building exercises or marketing per se. EBay made acquisitions in order to support its growth as a supplement to word-of-mouth and public relations advertising into tapping opportunities through national magazines and online alliances. These acquisitions aid in the expansion and improvement of the company’s services. EBay’s boldest and most costly effort of gaining greater name recognition began in August 1998, when it entered into a three-year marketing deal with America Online (AOL) aiming at further enhancement of the site and value-adding features to be established. Other online allies include Kinko’s, First Auction, Z Auction, Netscape and GO.com.   Broadening the products and services portfolio was another priority strategy for eBay, reaching to almost 3, 000 categories. At the onset, eBay utilised content-specific chat rooms and bulleting boards to provide real-time interface between buyers and sellers; customised home pages were also sought. EBay also collaborated with an online portal of the collectibles in exchange of affiliation referrals for Collecting Channel. Regional auctions were also established, focusing mainly on profitable markets in the US. It is believed that these regional auction sites could localise products while also providing buyers with the advantage of cutting off shipment or delivery charges. Such strategy was known as co-adoption where eBay diversified the firms into units and then collaborated with individuals within the system. Such action was known to be an element of expanding the traditional business model where eBay now shifts its focus on exploiting economies of scale and scope and extending offerings to new market segments (Brown and Eisenhardt, 1998).   The sense of community was further developed through designing an online tool with which could address more personal yet secure interactions between buyers and sellers and which is embedded on trust. Interest-based chat rooms were created, allowing a more transparent interface among individuals. These Feedback Forums, however, did not guarantee an honest community and so fraud and other illegal activities were witnessed. Synergism as another co-adoption strategy was realised. A SafeHarbour program was launched with features including Mister Lister bulk-listing tool, help boards, and My eBay, which allows a user to track multiple auctions simultaneously and also About Me, which allows a trader to customise home pages. EBay’s share of the total system consists of Sun database servers running Oracle relational database management systems and a suite of Internet servers that operate on Microsoft's Windows NT. Generally, the most important chore-reducing features have been added through arrangements with partner firms or third-party suppliers such as iShip, Mailbox Etc., Wells Fargo and E-Stamp. These are long-term strategies for eBay as the company launches more experimental products and services and creating more alliances toward nascent markets and emerging technologies (Brown and Eisenhardt, 1998).      4.0 Building Blocks at eBay 4.1 Time Pacing EBay belonged to an otherwise chaotic market, time pacing is important in the sense that any mistake that could impact real-time interfaces could affect the credibility of the company (Eisenhardt and Brown, 2008). Indeed, there are specific times when eBay was not able to respond to the ever-growing demand of traders as evident by 22 hours downtime mainly because of server problems leading to the crashed of the website in 1999. This had made eBay believed that advantage is indeed temporary and so the need to continuously look for new source of advantages (Brown and Eisenhardt, 1998). The sense of urgency was thereby developed but eBay was realised to be lacking strategic capabilities of responding to changes during that time especially because eBay was attempting to do all things at the same time. For instance, the website crashed due to the fact that the auction house is managing the processes of flow of users on the site, processing new members, accepting bids and managing huge database of list of categories while also integrating new products and services information. Nevertheless, when problems like this occur, eBay acts promptly and respond through adding workforces whom will oversee specific functions while also avoiding problems such as this.     4.2 Edge of Time In continuously evolving to be the business of tomorrow, eBay could still rely on its business model but could also consider expanding it. Black (2007) mentioned that e-commerce is becoming increasingly important to consumers, sellers, and entire communities and online marketing has become and will continue to become a full and complete business model for other companies. The increasing importance of e-commerce and the use of the Internet, led many online companies, such as eBay to engage in online auctioning. Ten aspects are attributed to the success of eBay, namely, commitment, well-spent funds, an effective and persistent marketing and public relations, great products or services to sell, not selling of junk, great customer service, efficient and pleasant facility, polished listings and photos, paying attention to details, and good recordkeeping (Mansfield 2006). These ten aspects are perceived to be contributory to the success of eBay in the industry as the leading online auction house, and determine its edge over its competitors.   4.3 Edge of Chaos The success of eBay has inspired other online companies to engage in the same business, of perceiving the same attention that it receives from consumers. With this, several competitors can be pointed out, which are also online companies that engage in the same services that eBay offers. Amazon.com and Yahoo! Auctions are the two main rivals. Amazon.com was the second largest online auction house, which is perceived to be a competitive threat to industry leadership position of eBay, is also a one-stop-shop online auction site. Compared to the business model of eBay which is trader-centric, that of Amazon.com’s is more inclined as profit-oriented. On the other hand, Yahoo! Auctions was the first online navigational auction house over the Internet, a reputation that sets its identity apart from the other two main auction houses. The advantages of eBay over Amazon.com and Yahoo! Auctions are three-fold: wider portfolio with over 3, 000 categories, low to zero transaction costs and information-support, manifesting that changes inside eBay are diverse and emergent (Brown and Eisenhardt, 1998).   In comparison with perhaps Fable, this report maintains that although eBay has proved to be lacking in strategic time pacing at certain point, experimentation and regeneration have been the survival strategies. Fable was more focused on short-term successes, missing the opportunities for new products growth. In opposite, one of the primary objectives of eBay was to strengthen products and services portfolio as evident by the incessant acquisitions of alliances and partnerships to boost categories and site features and functionality. Compared to Fable which is highly dependent on ‘repeated layering’, eBay is an epitome of a well-developed organisational structure where the top management especially Pierre was willing to accept what he cannot do for eBay and resorting to seeking the help of strategists such as Skoll and Whitman. For eBay, change is an opportunity that must be taken advantage instead of seeing it as a threat (Brown and Eisenhardt, 1998). Finally, Fable was not able to reap the benefits of changes but for eBay, the company is equipped with the capability to transition while maintaining a superior performance.   5.0 Conclusion   EBay is well aware that in order for the company to maintain its competitive advantage and make it sustainable in the long run, the company must take advantage of the changes at the corporate, organisational and business levels. EBay embraces the five building blocks which are applied randomly throughout eBay's history: improvisation, co-adaption, regeneration, experimentation and time pacing as evident by the strategies discussed. The company also embraces the 10 principles of competing on the edge about strategy, organisation and leadership.   6.0 References   Black, G S 2007, ‘EBay Users and Non-Users: Comparison and Implications for eBay Entrepreneurs’, at Association of Small Business and Entrepreneurship Annual Conference, Austin, Texas.   Brown, S and Eisenhardt, K 1998, Competing on the Edge: Strategy as Structured Chaos, Harvard Business Press.   Bunnell, D and Luecke, R A 2000, The EBay Phenomenon: Business Secrets Behind the World’s Hottest Internet Company, John Wiley and Sons, New York.     Eisenhardt, K M and Brown, S L 2008, ‘Time Pacing in Markets that Won’t Stand Still’, Harvard Business Review.   Gomes-Casseres, B 2001, ‘The history of eBay’, International Economics and Finance, vol. 1, no. 1, pp. 1-2.   Mansfield, R 2005, eBay to the Max: Be a Trading Post Owner, Trading Assistant & Power Seller, Que Publishing.

Strategic Management: The Case of eBay

Strategic Management: The Case of eBay 1.0 Introduction With achieving sustainable competitive advantage as the goal, organis...

Strategic Business Analysis: IBM

Strategic Business Analysis: IBM   Table of Contents  TOC \o "1-3" \h \z \u Internal and External Factors Affecting IBM.. PAGEREF _Toc29163772 \h 2 SWOT Analysis. PAGEREF _Toc29163773 \h 3 Strengths. PAGEREF _Toc29163774 \h 4 Weaknesses. PAGEREF _Toc29163775 \h 5 Opportunities. PAGEREF _Toc29163776 \h 6 Threats. PAGEREF _Toc29163777 \h 7 Strategic Choices of IBM.. PAGEREF _Toc29163778 \h 8 Openness. PAGEREF _Toc29163779 \h 8 Reduction of the Cost of Service. PAGEREF _Toc29163780 \h 10 Justification of Strategic Resources. PAGEREF _Toc29163781 \h 11 Openness. PAGEREF _Toc29163782 \h 11 Reduction of the Cost of Service. PAGEREF _Toc29163783 \h 12 References. PAGEREF _Toc29163784 \h 13 Appendices. PAGEREF _Toc29163785 \h 14 Appendix A: IBM: Background Information.. PAGEREF _Toc29163786 \h 14 Table of Figures  TOC \h \z \c "Figure" Figure 1 SWOT Analysis of IBM.. PAGEREF _Toc217382641 \h 4 Figure 2 Openness Strategy. PAGEREF _Toc217382642 \h 9 Figure 3 Reduction of the Cost of Service. PAGEREF _Toc217382643 \h 10     Introduction             As of now, there are different internal and external factors that are affecting the performance of each and every individual in an organization and the overall performance itself. In addition, it can be seen that those companies that are operating in the global market are the one that are directly affected due to the different changes. The said change is driven by transformation of local and international market such as the financial and economic situation of the world, trends in the local and international market as well as the changing tastes, preferences and behaviors of the customers. All of the said factors are considered as connected with each other, thus creating changes that are important in order to sustain the position of a company in the global market.             As a result, more and more companies are focusing on the process of evaluation of their current position in the local and global market which focuses on analyzing their internal strengths and weaknesses as well as the different external environment factors that can cause threats and opportunities for the company. All of the said factors can be used in the process of decision-making in different activities and plans that are needed to be done in order to ensure competitive advantage and position in the market.   Internal and External Factors Affecting IBM             International Business Machines Corporation (IBM), also known as the Big Blue is a multinational computer technology and consulting corporation that is located in Armonk, New York, USA. IBM is considered as one of the few Information Technology (IT) companies with a continuous history that dates back to the19th century. The company sells computer hardware and software and offers different infrastructure services, hosting services as well as consulting services in different IT areas from mainframe computers to nanotechnology. Aside from that, IBM is considered as the world’s largest computer history and considered as the largest IT employer in the world with 355,000 employees (Loyola Institute of Technology & Management n.d.) (see Appendix A).   SWOT Analysis             SWOT analysis is a strategic planning tool that is use n order to evaluate the strength, weaknesses, opportunities and threats that are involved in a project, business venture or in any other situation that requires a decision. Thus, the process of sizing up the internal strengths and weaknesses as well as the external opportunities and threats helps to provide a quick overview of the strategic situation of an organization (Spalding & Case 2007, p. 110).      Figure  SEQ Figure \* ARABIC 1 SWOT Analysis of IBM                                                           Figure 1 shows the SWOT analysis of IBM, showing the current strengths, weaknesses, together with the opportunities that can be exploited and the threats that must be prevented. Strengths             The most important advantage of IBM is its image or brand. This is due to the fact that IBM was the first important player in the industry or in the field. The said aspect gives the company their competitive advantage due to the fact that they have already established a name as well as relationship with their customers. In 2003, IBM topped the study regarding the brand perception of IT services. Buyers of different IT services perceive IBM as the top brand in all vital aspects of the market. The result of the study had showed that most of the 197 respondents and consumers of IT services that were surveyed by Gartner put Big Blue as the top company in the business and IT consulting, systems development and integration, as well as IT outsourcing (Sharma 2003).             Another advantage is the strong global presence of the company. The IBM Business Continuity and Resiliency Services has a worldwide presence across four important geographies and provide consulting services as well as recovery support for the large systems, midrange and even distributed environment customers. In addition IBM brings their customers the convenience of doing business in their customer’s own language and culture because it can help to reduce efforts, time and cost of traveling, that enables an easy access to a business environment where in their customers will be comfortable (IBM).             In connection to the long history of the company, it enables them to get hold of different valuable intellectual property, software, patents as well as ideas due to the fact that they have established and gathered group of people with wide knowledge and skills regarding computers and application of IT. This enables the company to have a vast research and development aspect. Weaknesses             The most important weakness of the company is that it is starting to show a declining share in the market, due to the growing competition in the national as well as global business industry. In 2007, the market share of the company had decline, making HP its leading competitor to gain the previous number one place of IBM in the worldwide market share. HP narrowly beat IBM in terms of worldwide market share, showing a 29.6% points, compare to the 28.9% points to IBM. It is important to consider that HP’s gain over the year was IBM’s loss, which shows that the companies are switching places. However, both of the manufacturers had been able to report positive revenue growth per year (Harushka 2008).             It was mentioned in the strength of the company, that its human resource of work force is considered as the primary factors that drive the success of the company, however, it is always important to consider that too much of everything is bad. Thus, in the case of IBM, it has a huge employee population, and they are all highly paid. The said aspect can affect  the entire operation of the company in terms of the production cost. Aside from that, it can also affect the communication process and management activities inside the company because of the huge population. Opportunities             Currently, there are so many opportunities that can be exploited by the company in order to maintain their competitive advantage and eventually helps to continue the growth of the company in terms of size, sales and market share. One of the most important factors is the aspect of globalization. This can be done by market development, where in the company will focus on looking for new possible market. In addition, innovation is a very important aspect, thus it can be done by have a collaborative or partnership with other IT-related company in order to produce new products that will support the ever-changing needs of the clients. With connection to that said aspect, it will be important for the company to focus on the growing demand of the public and other organizations towards open source software. This is due to the fact that some of the competitors of the company and other players in the software and IT-services industries are offering products and services that are too high that cannot be afford by the clients, primarily those small businesses, but IT is considered as a must in most of the businesses.             Another opportunity of the company is the growing demand for IT and Information Systems. This is due to the fact that most of organizations, companies and businesses in the world are becoming more aware regarding the importance of application of technology, particularly IT in their processes.   Threats             The major threat that must be analyzed by the company is the current changes in the global economic and financial status. This is important because it will affect not only IBM, but also other businesses in the world. As a result, it will affect the individual performance of each and every client of IBM that will affect their buying behavior. The company will be hurt by the slowdown in the Systems and Technology business (Kanaracus 2008).             Another important aspect is the increasing competition. Due to the fact that computer is already considered as one of the basic needs of most of the individual, there are many IT companies that are entering the industry. And although the major competitor of IBM is Hewlett-Packard, it is also competing in some of small players or competitors such as Dell and Accenture.   Strategic Choices of IBM             Based on the said internal capabilities, the strategic choice of IBM must focus on two important aspects: the openness; and the reduction of cost of services. Openness   Figure  SEQ Figure \* ARABIC 2 Openness Strategy                                                       It is important to consider the vitality of the current strength of the company and how it can be used in order to exploit the opportunities that can be found in the external environment. In the case of IBM, the primary strengths focus on the different technologies as well as knowledge that are available for the employees in order to start doing their innovation. In addition, the company also holds a strong team that focuses on research and development of the company.             On the other hand, the primary opportunity focuses on the fact that there is a growing demand for open-source products and services, in addition to that standards in the economic expansion. The said aspect is important due to the fact that customers from different part of the globe are looking for an integrated solution in order to solve their application development needs (Novell 2006).             The said action will be done by different partnership with different IT-related companies that are engaged in developing different open-source software and application. Open source is a human-readable source code that was made available under a copyright license that meets the Open Source Definition, where in it permits the users to use, change as well as improve the software, and then redistributes it. More often, than not, it is developed publicly and collaboratively. The reason behind the growth of demand for open source software is that it enables the customers to save up to $60 billion every year (Rothwell 2008; The Standish Group 2008).             The said strategy will help IBM to focus on the greater demand of the customers, thus, making the company more aware regarding the behavior of the customers. It is also important to consider that the said strategy will help to boost the image of the company towards their customers, due to the fact that the company is helping their clients to save money and effort. Reduction of the Cost of Service   Figure  SEQ Figure \* ARABIC 3 Reduction of the Cost of Service                                           Figure 3 shows the reduction of cost and services strategy of IBM. The main weakness of the company focuses on the huge population with very high salary or pay. There is nothing bad about offering high salary or payment for the service or effort of the employees due to the fact that it is considered as one of the major driver of motivation inside an organization. As a result, it can help to improve the performance of each and every individual, and then later on reflect on the overall performance of the company. However, due to the different changes that are happening inside and outside the environment of the company, particularly during the time of global economic and financial crisis, it is important to focus on the negative impact of huge population and high salaried employees of the company, even though, they are considered as very talented and skilled employees. The company must focus on the fact that the human resource cost can affect the entire pricing strategy towards the products and services that the company is offering, as a result, the company will not be able to compete in terms of price.              On the other hand, the company can also take advantage of the low labor cost in China. This can be done by establishing production sites and headquarters in China. The per-hour cost for an employee in an American or European plant is between $15 and $30 or evens more, and this is mainly dependent on the decision of the workers’ union in the plant, the location and degree of welfare the plant provides. On the other hand, in China, the average per-hour cost for a worker in a Chinese plant is below 1 dollar, showing a dozen times lower compare to the two first mentioned nations (People’s Daily Online 2004).   Justification of Strategic Resources Openness   The said strategy will help the company to lessen their labor cost that will later on reflect in their production cost. In addition, it can help the company to focus on the competitive advantage that will focus on price differentiation. This is due to the fact that more and more people, especially those from developing countries that are looking for computers and IT-services that are affordable. By doing this, the company will be able to hit two birds in one stone, where in first it will help to lessen their production cost that will help to focus on the pricing strategy of the company; at the same time, focuses on the changing demands and behavior of the customers regarding their products and services.   Reduction of the Cost of Service             The reduction of the cost of services, particularly the outsourcing can help the company to save money or cost in terms of human resource, especially today that the world is facing financial problems. In order to prevent the said future problem regarding the financial negative impact of having huge human resource, it will be important for the company to lessen the number of employees. On the other hand, outsourcing can be applied in order to save time, money and effort. Outsourcing is considered as a contracting activity with another company or person in order to do jobs function. As of now, most of the company is outsourcing in some and different ways. More often than not, the functions that are being outsourced are considered as a non-core activity to the business (Sourcingmag.com 2008). The said strategy will help the company to save money due to the fact that the outsourcing company will be directly responsible in the process of selection, hiring and positioning employees to a given project.     References   Harushka, J 2008, HP Passess IBM in Server Market Share as Segment Booms, Ars Technica, viewed 18 December 2008, <http://arstechnica.com/news .ars/post/20080523-hp-passes-ibm-in-server-market-share-as-segment-bo oms.html>   IBM, Worldwide Presence, viewed 18 December 2008, <http://www-935.ibm.com/services/us/bcrs/html/worldwide.html>   Kanaracus, C 2008, IBM Q3 Rises, But Signs of Downturn Loom, viewed 18 December 2008, <http://www.techworld.com.au/article/264158/ibm_q3 _revenue_rises_signs_downturn_loom>   Loyola Institute of Technology & Management, IBM, viewed 18 December 2008, <http://www.litam.ac.in/companies/ibm.html>   Novell, IBM and Novell Join Forces to Support Growing Demand for Open Source, viewed 18 December 2008, <http://www.novell.com/news/press/i bm-and-novell-join-forces-to-support-growing-demand-for-open-source/>   People’s Daily Online 2004, China’s Advantage in Low Labor Cost will Remain in Coming Decade, Report, viewed 18 December 2008, <http://engli sh.peopledaily.com.cn/200409/07/eng20040907_156220.html>   Rothwell, R 2008, Creating Wealth With Free Software, Free Software Magazine, viewed 18 December 2008, <http://www.freesoftwaremagazine.com/com munity_posts/creating_wealth_free_software>   Sharma, D 2006, IBM Top of IT Services Brand Perception Study, Silicon.com, viewed 18 December 2008, <http://management.silicon.com/itdire ctor/0,39024673,10006300,00.htm?r=2>   Spalding, G & Case, G 2007, Continual Service Improvement: Continual Service Improvement, The Stationery Office   Sourcingmag.com 2008, Outsourcing – What is Outsourcing? Viewed 18 December 2008, <http://www.sourcingmag.com/content/what_is_outs ourcing.asp>   The Standish Group 2008, Free Open Source Software is Costing Vendor $60 Billion, viewed 18 December 2008, <http://www.standishgroup.com/news room/open_source.php>         Appendices   Appendix A: IBM: Background Information

Strategic Business Analysis: IBM

Strategic Business Analysis: IBM Table of Contents TOC \o "1-3" \h \z \u Internal and External Factors Affecting IBM ...

Best Practice Vs. Best Fit Approach to Strategic Human Resource Management

Best Practice Vs. Best Fit Approach to Strategic Human Resource Management Introduction             Due to the different changes that are going on in the business world, as well as the realization of different businesses and firms that the employees are considered as an asset as well as important resource of the organization, more and more companies are focusing on planning and implementation of different strategies that will focus on the integration or connection of the human resource with the success of the entire business, together with the process of setting standards, goals and visions.             The strategic human resource management or SHRM is considered as a complex process that is continuously evolving and studied, as well as discussed by academics and managers. It is considered as one of the primary factors that help to improve the performance of the business (Armstrong & Baron 2002). Above all, it is considered as a primary approach in human resource, with connection to the intentions of the organization regarding the future direction that they want to take, thus it focuses on the longer term about the issues of the people and the macro-concerns regarding the structure, quality, culture, values as well as commitment, together with the matching resources for the future needs (CIPD 2008).   Best Practice versus Best Fit Approach to SHRM Best Fit Approach             The best fit approach focuses on the importance of making sure that the HR strategies are suitable to the different circumstances of the entire organization, together with culture, operational processes as well as external environment.  Thus, it focus on the idea that different human resource (HR) strategies have to focus on a given needs of both the organization and its people (Armstrong 2006, p. 138).  Due to the said reason, most of critics and commentators believe that best fit approach is more important and vital than the best practice.             Figure 1 shows the processes and aspects that are needed and included in the best fit approach. It focuses on learning what works, and what does not work, in connection to the organizations, thus, it is up the firm to decide what may be pertinent and applicable in the general terms and what lessons can be learnt that can be adopted in order to fit the company’s given strategic as well as operational requirements.             The process starts with the analysis of the business needs of the firm within its context such as culture, structure, technology and process that indicate what has to be done. Afterward, it can be useful in order to choose and mix different best practices ingredients, as well as develop an approach that applies those that are applicable in a way that is aligned in order to identify different business needs (Armstrong 2006, p. 139).             On the other hand, its flaws focus on the limitation of the search for contingency or matching model of HRM as well as the difficulty in showing their interconnection, as well as the way that changes in one variable that have an impact on others (Armstrong 2006, p. 139). Figure 1 Best Fit Model of Strategic Human Resource Management                                                                                                          Adopted from: (Shields 2007, p. 100)                                             As a result, the best fit approach has a huge appeal to the HR practitioners due to the fact that it positions them as the first-level strategic partners in the process of management decision-making. This is because, the rejection of a one size fits all approach helps to widen the range of good judgment that are available to them (Shields 2007, p. 101).   Best Practice Approach             On the other hand, the best practice approach speculate that there is a exact set of human resource practices that can be applied in almost any organizational context that helps to increase the performance that helps to deliver outcomes that are valuable for all the stakeholders, particularly employees. However, the effect of the performance is said to be stronger and more influential if all of the said practices are packed together in order to balance and harmonize each other, thus create positive synergies between them. As a result, the said approach covers different related prescriptive models of human resource management such as high-commitment, high-involvement, high-performance work system, and mutual gains models (Shields 2007, p. 90).               The best practice approach is based on the idea that there is a set of best HRM practices and that applying them will help to superior organizational performance. The best known set is Pfeffer’s (1994) model that shows that seven important HR practices of a successful organizations which are: employment security, selective hiring, self-managed teams, high compensation contingent on performance, training, reduction of status differentials and sharing information  (Armstrong 2006, p. 65) (see Appendix A).             There are different critics and commentators that are attacking the idea of best practice. This is because the best practice or universalist views by pointing out the discrepancy between a belief in best practice as well as the resource-based view that pertains on the intangible assets that includes HR, which allows the firm in order to do better than its competitors. The major question is how can the universalism of the best practice be squared with the view that only some resources and routines are significant and vital by being rare as well as imperfectly limitable? Aside from that, it is also hard to accept that there is a universal best practice, because one practice that have been successful for one organization, doesn’t necessarily mean that will work on others (Armstrong 2006, p. 65).   Intel in Ireland             Intel is a company that offers products and services regarding convergence of computer and communications technologies, together with the activities that focuses on the manufacturing of chips, boards systems, software and network and communications equipment. As of now, the company holds the 15.3% of the semiconductor market in the world (IDA Ireland 2009).             Currently, the Irish operation employs about 5,000 people that are directly and indirectly in the field or profession of engineering, technical as well as operational activities (IDA Ireland 2009).             Pfeffer explained employment security as vitally strengthen and support the other six HR practices due to the fact that it is considered as unrealistic to ask the employees to provide their ideas, hard work as well as commitment without some expectations of security on their part (Marchington & Wilkinson 2002, p. 179). In connection to this, because Intel is a huge multinational company, it implements and applies a massive hiring and selection process, with the help of the Internet or their web-based tools. This is supported with the comprehensive compensation and benefits package that is designed in order to attract, retain and reward the people that are necessary to help the company to create longer-term growth and profitability (Intel Ireland n.d.). However, the major problem of Intel is its lay off as well as downsizing, as part of development phase. However, Pfeffer (1998) stated that compulsory lay-offs and downsizing weaken and challenge employment security. As a solution, he recommended the following: proportionately reducing the working hours, in order to spread the pain of reduced employment cost in the entire workforce; reducing wages to reduce the labor costs; freezing the recruitment process in order to prevent overstaffing as well as putting the production workers into the sales in order to build up the demand (Marchington & Wilkinson 2002, p. 180). In terms of the selective hiring the organization is clear about the different critical skills as well as attributes that are needed, as well as the choices that are considered as a basis of the said attributes that are hard or impractical to change, as well as to train the people in the said behaviors as well as skills that can be easily learned (Armstrong 2006, p. 64).             On the other hand, the company is not focusing on the self-managed teams that are also important aspect of the SHRM. This is because the company focuses on the hierarchical flow of communication as well as power. Thus, it will be important because it can help the employees to pool their ideas to produce better as well as creative solutions in order to work the problems (Armstrong 2006, p. 64). In connection to the security aspect, it is important to consider the compensation contingent on the performance. The company is offering different benefits and bonus that enables the employee to have motivation. The said compensation is contingent on the organizational performance (Armstrong 2006, p. 64).             In terms of training, it can be said that the company is handling it with expertise; this is due to the implementation and establishment of the worldwide training organization which is the Intel University that focuses on the culture of the company, career and manager development as well as new employee orientation and integration. In addition, in order to encourage education, the company offers reimbursement for work-related coursework, certificates, degree programs as well as foreign language training to the qualified employees (Dell Ireland n.d.).             Furthermore, in order to ensure good working environment, it will be important to focus on reducing the status differentials that enables to tap the ideas, skills as well as efforts of all the people (Armstrong 2006, p. 65).             The most important aspect is the communication and information sharing inside the organization. This focuses on the financial performance, strategy and operational measures that convey a symbolic and substantive message that the employees are being trusted and reduce the role of the grapevine in the process of spreading the humors. It is also important that communication is a great support to team working because it helps to encourage the team members to offer and provide their ideas (Marchington & Wilkinson 2002, p. 184).   References   Armstrong, M (2006), A Handbook of Human Resource Management Practice, Kogan Page Publishers   Armstrong, M & Baron A (2002), Strategic HRM: the key to improved business performance. Developing practice. London: Chartered Institute of Personnel and Development, viewed 6 January 2008, <http://www .cipd.co.uk/bookstore>   CIPD (2008), Strategic Human Resource Management, viewed 6 January 2009, <http://www.cipd.co.uk/subjects/corpstrtgy/general/strathrm.htm>   IDA Ireland (2009), Intel, viewed 7 January 2009, <http://www.idairelan d.com/home/case_study.aspx?id=244&content_id=13>   Intel Ireland, Intel, viewed 7 January 2009, < http://www.intel.com/>   Marchington, M, Wilkinson, A, Sargeant, M (2002), People Management and Development: Human Resource Management at Work, Chartered Institute of Personnel and Development Publishing   Rusu, A (2006), Intel to Lay Off 10,000 Employees, Softpedia, viewed 7 January 2009, <http://news.softpedia.com/news/Intel-to-Lay-Off-10-000-Employee s-34504.shtml>   Shields, J (2007), Managing Employee Performance and Reward: Concepts, Practices, Strategies, Cambridge University Press       Appendices   Appendix A: Pfeffer’s Model of Best Practice     Adopted from: (Armstrong 2006, p. 65)

Best Practice Vs. Best Fit Approach to Strategic Human Resource Management

Best Practice Vs. Best Fit Approach to Strategic Human Resource Management Introduction Due to the different changes that...

Strategic Brand Management of Café de Coral – Hong Kong

Strategic Brand Management Café de Coral – Hong Kong   Company Background             Café de Coral is the largest Chinese restaurant chain in the world. It is listed in the Hong Kong stock exchange. Café de Coral has different business operations and has managed to expand its business worldwide. “Major operations include fast food outlets, institutional catering, specialty restaurants, food manufacturing, distribution and other overseas food and beverage businesses” ().   Profile             Café de Coral is Hong Kong’s leading fast-food brand. The company is the undisputed market leader in Hong Kong and is currently serving an average of 300,000 customers everyday. The company boasts its broad experience in the food and catering industry that made them the biggest and most successful brand in Hong Kong. The company’s 34 years of proven experience has made them one of the market leaders in Asia.  Product             café de Coral offers a wide array of food to choose from. Its specially designed menu aims to meet every customer’s tastes and budgets. Café de Coral offers 100 items on the menu that are intended for customers that seek good food, fun dining experience and affordable prices. The food items are regularly rotated to offer the customers a variety of choices. The standard menus range from western cuisine to traditional Chinese dishes. The company also introduces new and innovative products regularly. Place Every restaurant is strategically located to reach the target markets and attract potential customers. Restaurants are located in different mixed use district, business core, shopping centers, industrial areas, private and public and housing estates. The restaurants are modern in terms of designs and have warm ambiance that encourages maximum customer flow.  People The staff at Café de Coral are friendly and warm. They are dedicated and energetic. The service team is properly trained in order to render high quality service to Café de Coral’s valued customers. Café de Corals customers are diverse. People from all walks of life and different backgrounds come to Café de Coral to experience the state of the art ambiance, best food and high quality service.  Promotion "Achieving A Hundred Points of Excellence" has been our commitment to our customers and is now a household catch phrase. As part of our on going campaign to strengthen the Café de Coral Brand, proactive advertising campaigns are launched on a continual basis. Through the campaign, the brand image has been further enhanced by positioning Café de Coral as a place not just for best taste and value meals but also a popular meeting place for all walks of life () Prospect Café de Coral is dedicated to accommodating changing market needs and continues to uphold its reputation and status as the leader in the field of food service. Total dining experience is continuously being enriched by developing new products and constantly improving the facilities and incorporating exiting design concepts. The company is looking forward to establishing a stronger market lead in the Chinese market. Café de Coral is planning for China expansion.   History             The first Café de Coral opened in 1968 on Sugar Street, Causeway Bay. After years of hard work, Café de Coral evolved from a single outlet to a leading Chinese fast food chain with over 120 restaurants, serving over 300,000 customersdaily ().   Products and Services Provided Signature Products  "Baked Pork Chop with Rice", "Hot Pot", "Chicken in Glutinous Rice" and "Tea with Milk" are all signature products of Café de Coral with huge success, but we don't just stop there. We want to be better than the best and we never stop evaluating our signature products to make improvements, so that you always get the best without even having to ask for it. Premium Ingredients  Besides our well established menu, Café de Coral also explores into the realm of the newest tastes. We even introduced luxurious dishes that used to be served only in the most prestigious hotels and high-end dining restaurants, such as our Winter Melon Soup that comes in one-person portion, Shark's Fin Soup, King Size Scallop and Campedore Soup. You always get the best food with the best value for money at Café de Coral. Quality Control  Café de Coral insists so much on food quality that we set the strictest standard for every step, from merchandizing, cooking to storage. We also hire an independent team to examine and evaluate the quality of food at each branch. And you, as our customer, of course have the say - we conduct surveys regularly to understand what you need in terms of food and services ().   Services  A Hundred Points of Excellence    "A Hundred Points of Excellence" is our motto and every one of the 10,000 Café de Coral employees treats "customer satisfaction" as a mission. We try our best to improve our service and food every minute so that you always get the best.     Staff Training Café de Coral provides training for employees on all levels regularly, to refine their individual skills and to improve their co-operation skills as a team. "Mystery shoppers" program is conducted to reveal the real service quality and employee's attitude. This auto-amelioration is surely one vital step in elevating the standard of service ().   Brand Development Strategy             One of the most important brand strategies that Cafe de Coral must develop is creating consumer demand by using advertising and promotion. The company must be able to communicate the brand effectively to the consumers. Café de Coral must continuously launch advertising campaigns in order to strengthen its Brand. Advertisements will be primarily used to build marketing relationship between the consumers and the company’s brand. The company is continuously growing with the aid of effective marketing studies that aim to identify opportunities for expansion, targeted marketing opportunities and discover new niches. The company is growing in a breath-taking rate with over 330 outlets in Asia Pacific region, and over 200 quick service restaurants in North America. The company has expanded its operations, which now include fast food, institutional catering, specialty restaurants, food manufacturing, distribution and other overseas food and beverage enterprises. The company is also determined to sustain customer loyalty by continuously improving the products, the ambiance of the restaurant and maintaining a high level of service quality. Café de Coral has developed a reputation of being both the best place to eat best taste and value meals and a place where from different backgrounds and social levels can meet and mingle. According to  (2000), the company offers a diverse menu so that the customers would visit more than once a week and have a different selection to choose from each time (p.22).  Café de Coral offers a menu that is specially designed to meet the tastes and budgets of every customer. It also introduces new products and seasonal products regularly. The stores are well designed and have a warm and relaxing environment that attracts different people. The stores are strategically located in areas where they can reach their target market and can gain access to potential customers.   Brand Elements 1. Memorability and Recognition             The company must employ different advertisement campaigns in order to make the mainstay customers and potential customers remember the company and its products and service more. Because of the effective advertisements, Café de Coral is easily recognized and recalled by the customers. The company has successfully created a recognizable identity among their many communications and product lines. The company’s “Achieving a Hundred Points of Excellence’ has earned wide recognition and memorability among its customers. 2. Meaningfulness             The company must use brand names, brand logos, brand symbols, brand slogans and brand characters that are descriptive, persuasive and interesting in order to attract the customers. These can be combinations of both visual and verbal approaches.   Brand Positioning             Category Membership is important in establishing and sustaining the company’s brand position. Attributes and image must be used to provide rationales that will give consumers reason to believe that Café de Coral’s brand has the benefit that implies membership in a category. Brand attribute must be used in order to create a point of difference. It is very important for the company to inform the customers of Café de Coral’s membership before stating its point-of-difference in relation to other category members. It is well known that Café de Coral is a fast food restaurant but it is important that the customers know what sets Café de Coral apart from other quick service restaurants such as McDonalds. The company must develop concurrent marketing programs where one features membership and the other the point-of-difference. Developing compelling points of difference is crucial to effective brand positioning. Café de Coral is known as the largest Chinese quick service restaurant chain in the world. The point of difference between Café de Coral and its biggest competitor, McDonalds is the menu, ambiance and service style. The company must focus on highlighting this edge and product development and improvements. The advertisement must convince the customers that Café de Coral offers the more superior products, ambiance and service quality together with affordable prices. The Role of Marketing Mix             The four P’s of marketing mix are important in controlling the internal and external constraints of the marketing environment. 1. Products are the tangible and physical products as well as services. 2. Price decision is important in creating a competitive brand. 3. Distribution is about delivering the products and services to the customers 4. Promotion deals with communicating the product or service to the customers and making a favorable image of the product or service in the minds of the customers.   Contradictory Arguments             Café de Coral is one of the largest Chinese quick service restaurant chains in the world. One major strategy of Café de Coral is advertising. Advertisement is important in gaining customer attention. However advertising alone is not enough to sustain its status and create new opportunities for expansion. Café de Coral must build its success on product innovation and marketing excellence, backed up by an uncompromising commitment to quality customer service. Its marketplace is fast changing and competitive, characterized by increasingly sophisticated customers and ever-tighter profit margins. To sustain its leadership position in this demanding environment, Café de Coral must find a way to improve customer experience while enhancing operating efficiency and reducing costs.   Recommendations             A carefully formulated marketing Mix is important in positioning Café de Coral in the customers’ minds. The elements of the marketing mix (product, promotion, price and distribution) are essential in order to carry out a brand management strategy. The aim of the marketing mix is to create a favorable customer view of Café de Coral using promotional messages, pricing strategy, mode of distribution and the product and service appearance.   1. Products             Café de Coral’s products and services are important in creating a favorable image of the company in the customers’ minds. This image is reflected in the customers’ perceptions and feelings about the products and services. Attention must be given to the benefits that the customers get from Café de Coral’s products and services. The customers must be convinced that the company is capable of giving them the benefits that they expect in order to attract them. Product decisions should include quality, features, options, style, brand name, packaging, services, and returns. Special attention must be given to quality.             Quality reflects differences among products or differences among services. As long as it is possible to create differences among products then it should be possible to create differences in quality. Even in cases where it is difficult to create differences, producers can still try to promote products through ‘perceived’ quality differences, i.e. the way in which they are perceived by the customer. Quality is a relative value that people attribute to things. It reflects people’s expectations concerning a product or service and how well it will provide the various benefits they require from using it. Fortunately, large groups of people have shared ideas about quality and it is possible to produce and market products and services that will meet with the perceptions of large groups of customers. Groups of customers sharing a common perception of a particular level of quality form market segments. A firm can direct its promotional messages to these groups of customers provided that it knows how to reach them. Product quality contributes to business profitability. It has been found to be positively related to market share and return on investment over a wide range of products and in different market situations (2000). 2. Promotion             Café de Coral’s products and services must be noticed and must be trusted by the customers. This can only be achieved through an advertisement campaign that stands out. Advertisements must be able to catch the customers’ attention and deliver the message in an original way that will ensure customer memorablity and recognition. The advertisements of Café de Coral must not only inform but it must also entertain to be able to attract customer attention and interest. Café de Coral must give emphasis to images because they have the “capacity to capture the essence of a thousand words” (2000). 3. Price             Due to stiff competition, Café de Coral must maintain a competition-oriented pricing. 4. Distribution             The distribution process of Café de Coral is direct distribution. Through direct distribution, the company has more control over marketing activities and reduces time spent in the channel.

Strategic Brand Management of Café de Coral – Hong Kong

Strategic Brand Management Café de Coral – Hong Kong Company Background Café de Coral is the largest Chinese restaurant ...