Category: Corporate Strategy

Nail salons are small businesses that can be observed in many towns and large cities. La Belle Nail Salon is one of small salons that mainly specialize in providing such services as manicure, pedicure, nail art, nail enhancement, and nail extension. The target audience of La Belle Nail Salon is females aged between 18 and 50. In order to stay competitive within the actively developing industry of nail and hand care services, nail salons should focus on improving their strategies in order to attract more clients and increase the customer loyalty. The strong competition is more obvious in large cities, where the number of nail salons is great and the provided services are various in their kind and quality. The aim of this paper is to create a working business strategy for a competitor to La Belle Nail Salon in the market and to propose a business plan for a new nail salon.

Strategy for a Business Concept

The process of selecting a strategy for a new business is one of the most challenging tasks for an entrepreneur because it is necessary to choose a strategy that can be effective to create the competitive advantage for the business. Thus, an entrepreneur usually chooses among differentiation, low cost, and focused strategies oriented to developing and accentuating different aspects of the business to contribute to the competitive advantage (Blackburn, Hart, & Wainwright, 2013, p. 9; Scarborough & Zimmerer, 2012, p. 57). For starting such a small business as a nail salon, it is relevant to choose the differentiation strategy based on the concept of service (Scarborough & Zimmerer, 2012, p. 58). Differentiation according to the factor of service means that the new nail salon has the mission to provide superior and high-quality customer services while responding to the customers needs, interests, and expectations. According to the differentiation strategy, it is expected that the nail salon will be organized and designed as a sitting-room in a mansion where clients can not only improve the state of their nails but also discuss latest news, drink a cup of tea, eat a cake, listen to music, and look through magazines. In spite of the fact that many of these activities are typical for salons providing different types of services for women, the new nail salon will emphasize the unique atmosphere of the fashionable spa-salon designed as the saloon of the 19^th century that is located in the centre of a city. The focus on the customer will be reflected not only in the quality of the provided nail services but also in the attention from waitresses and assistants. Furthermore, the rules of the nail salon can be associated with the rules of the fashionable club or saloon of the 19^th century.

The discussed differentiation strategy based on the aspect of the reliable various services can be referred to as an effective business strategy that can be used in the competitive market of spa and cosmetics salons. The focus on the customer service is selected because of the lack of financial resources to propose customers the innovative approaches in the sphere of nail art, extension, and enhancement. The competition in the industry is high, and it is possible to choose the opposite path and provide clients with the services that are associated with the certain atmosphere and leisure activities that can be discussed as trendy (Cronin-Gilmore, 2012, p. 97). In this case, an entrepreneur uses the available financial and material resources to create the specific atmosphere, there is no need to focus on innovation, and the uniqueness of the customer service can be achieved through providing exclusive experience while using only the basic equipment and known technologies.

Rationale for Purchasing Business

In spite of the fact that the new business can become an efficient competitor to La Belle Nail Salon, it is more relevant to purchase the existing business and use the selected strategy in order to improve the tactical approach currently followed in the salon. The reason is that the strategy followed in La Belle Nail Salon is based on the idea of high quality, but it does not contribute to increasing the business competitive advantage. However, instead of the direct competition, it is more profitable to purchase the existing business because its location is known for the public, the clients are permanent, and the reputation associated with the provision of high-quality services works to attract more customers (Scarborough & Zimmerer, 2012, p. 128). Furthermore, it is possible to use the previously developed relationships with suppliers in the industry and avoid the staff recruitment procedures while inviting the employees who worked for the former owner of the business (Ensign, 2008, p. 26). It is possible to state that the staff of La Belle Nail Salon is competent, and it is important for the entrepreneur to address the needs and interests of the staff while following the human resource strategies that were used by the former owner. The process of changing the human resource management approaches should be slow and based on the ideas of the customer service and job commitment.

From this point, the total costs of purchasing La Belle Nail Salon are expected to be lower than the costs associated with opening a new business. Thus, the process of opening a new nail salon can be time-consuming and costly because of the necessity of starting the business from the zero point (Scarborough & Zimmerer, 2012, p. 128). Several stages of the business development process can be avoided with references to purchasing La Belle Nail Salon. As a result, a new entrepreneur will avoid risks associated with the start-up stage and save significant financial and material resources, while developing relations with the existing staff, suppliers, and customers.

The Appropriate Form of Ownership

It is possible to state that the sole proprietorship is the most appropriate form of ownership to start the small business, without focusing on the business as the new one or as the purchased one. An entrepreneur can see many advantages in operating such a small business as the nail salon as an individual. In this case, fewer resources are necessary to develop the business and organize it from the legal perspective. Furthermore, a nail salon is a typical small business, and it is relevant to refer to the sole proprietorship while focusing on the analysis of potential profits (Scarborough & Zimmerer, 2012, p. 70). The sole proprietorship is also selected because partnerships and corporations are not efficient for businesses that are only at the starting point of their development. In order to save resources, it is reasonable to choose the sole proprietorship associated with appropriate fees and costs.

A Business Plan for the Business

A business plan for the new nail salon should include the following sections: Executive Summary, Mission and Vision Statements, Business History and Goals, Industry Profile, Business Services, Business Strategy, Marketing Strategy, Analysis of Competition, Management and Organization, and Financial Statement.

Executive Summary

Luxury Nail Bar is a fashionable nail salon located in the central part of Boston, Massachusetts. The nail salon specializes in making different types of manicure and pedicure as well as other nail and hand care services. In addition, the nail salon is organized as a spa club and saloon for permanent female clients.

Mission and Vision Statements

Luxury Nail Bars mission is to provide the exclusive nail services for the female population while addressing their needs in the aesthetic satisfaction.

Luxury Nail Bars vision is to foster beauty and care in the sphere of nail art and services.

Business History and Goals

Luxury Nail Bar was established in 2015 as a small nail salon providing high-quality services to female customers in Boston, Massachusetts.

The goal of the business is to develop the profitable entrepreneurship in the sphere of beauty and care with the potential for the further expansion in five years.

Industry Profile

There are more than 205,000 nail salons in the United States with references to the data on 2010-2012 (Statistics on Nail Salons in the USA, 2013). The number of salons tends to increase because of the high demand for the provided services. Many nail salons use different innovative technologies in order to increase the quality of the provided services and propose new kinds of services.

Business Services

1. Manicure.
2. Pedicure.
3. Nail art.
4. Nail enhancement.
5. Nail extension.
6. Hand care services.

Business Strategy

Differentiation based on the idea of the customer service. The focus is on provision of the high-quality services in the customer-focused environment. Much attention is paid not only to the provision of the nail services but also to organizing the clients leisure and waiting time.

Marketing Strategy

The main focus is on distribution of flyers providing the information about Luxury Nail Bar and discounts.

Analysis of Competition

The market is highly competitive. The risk of new entrants is high because of the comparably low costs associated with starting a business.

Management and Organization

The sole proprietorship, two management positions, 15 employees.

Financial Statement

The business will start basing on a loan. A repayment schedule is expected to be developed for 24 months.

Conclusion

The decision on starting or developing a small business depends on the analysis of the industrys environment, on the discussion of the market trends, and on the analysis of the competitors advantages and disadvantages. The success of the business depends on the effectiveness of a selected strategy. Having analyzed an industry in which such small businesses as nail salons operate, it is possible to state that the differentiation strategy is the most effective choice for starting a business in the highly competitive environment. The sole proprietorship and the path of purchasing a business are chosen for Luxury Nail Bar in order to compete within the market while referring to the minimal starting capital. An outline of the business plan reflects the main points need to be addressed in the document.

References

Blackburn, R., Hart, M., & Wainwright, T. (2013). Small business performance: Business, strategy and owner-manager characteristics. Journal of Small Business and Enterprise Development, 20(1), 8-27.

Cronin-Gilmore, J. (2012). Exploring marketing strategies in small businesses. Journal of Marketing Development and Competitiveness, 6(1), 96-104.

Ensign, P. (2008). Small business strategy as a dynamic process: Concepts, controversies, and implications. Journal of Business & Entrepreneurship, 20(2), 25-43.

Scarborough, N. M., & Zimmerer, T. W. (2012). Effective small business management: An entrepreneurial approach. Upper Saddle River, NJ: Prentice Hall/ Pearson.

Statistics on Nail Salons in the USA. (2013). Web.

Introduction

For sometime now, human impact on environmental change has become the focus for scientists and environmental conservatives.

The risks resulting from climatic change have attracted mixed reactions. Accordingly, some companies argue that their revenues will be seriously affected by such factors as the carbon dioxide emissions controls and therefore some have remained skeptical on the global warming findings.

According to the Intergovernmental Panel on Climate Change (IPCC) scientific consensus has been arrived at concerning the present global warming trend. This is due to increased greenhouse gas emissions, which have anthropogenic climate changing effect.

This concern has been gaining attention from the commerce world presently with organizations re-strategizing in order to give more attention and focus on their environment of operation as well as their sources of energy (Senge, Kruschwitz, Laur & Schley, 2010). This has led to businesses need to develop and adopt green business strategies that are inclined towards environmental conservation efforts (Esty & Winston, 2006).

The managerial concern for most of these organizations and businesses is on ways of implementing a sustainable plan for their green business strategy.

Within this process are a number of considerations that will ensure the completeness and relevance of such an undertaking. However, the planning and implementation of such strategies may be resource intensive and ambitious that requires a possible organizational re-structuring (Benyus, 2002). The main concern for most organizations as far as environmental issues are concerned relates to their source of energy.

This is especially true for heavy manufacturing industries that require large amounts of energy. For a long time the US has been known as the largest producer and consumer of coal that is one of the main contributors to the greenhouse gas or global warming effect. As such the US has remained reluctant in enacting ratifications that would effectively reduce the emissions resulting from the use of coal as a source of energy.

However, the other sources that are considered greener remain expensive to implement and use and are therefore limiting as far as business growth is concerned. Additionally, the greener sources of energy like nuclear may have their own shortcomings that have lasting catastrophic impact on the environment if they are mishandled.

Developing a green business strategy will also consider a number of federal ratifications to ensure sustainability (Hawken & Lovins, 2008). Presently the environmental law has an international orientation because an aspect such as pollution which needs to be addressed by such a law does not respect political boundaries.

Environmental protocols or conventions which are one of the ways the environmental law is enacted can be enforced as bilateral or multilateral treaties. These protocols deal with specific issues of the environment. In developing a green business strategy, such protocols must determine the preparations and sustainability of the business strategy.

The US federal government proposes a number of environmental statutes that must be referenced during the development of such a strategy. A violation of these statutes is considered a civil offense attracting fines and injunctions for the parties concerned.

Generally, a green business strategy aims at reducing the wastage of natural resources and levels of pollution while increasing sustainability. The green business strategy is based on a number of concepts that would cover prevention of pollution, adopting a sustainable vision, embracing clean technology and product stewardship.

In order to achieve sustainability the processes of the organization may need to be realigned so that an ecological aspect is introduced therein. This remains the main reason why many organizations have a lot of talk about green business strategies but very little implementation of the same.

Esty and Winston (2006) have enumerated the expanse of a green strategy to cover such issues as value chain eco-efficiency, eco-expense reduction, eco- efficiency, eco- risk control, eco-sales and marketing, eco- defined new market places, eco-design and intangible value. Undoubtedly for many businesses and organizations today, the barriers to green business approaches and strategies are either social or political.

Frame work of reference

Princeton Mart is a large scale community based fresh foods and grocery supplier serving the community at Princeton. The community currently numbering over 300,000 residents basically served by Princeton Mart is increasingly becoming aware of federal environmental statutes requirements. Therefore, the management at Princeton Mart has engaged Welkson Consultants to draft for them this green business strategy proposal.

This proposal has been developed for Princeton Mart to enable them to use the natural resources within their environment sustainably.

The adoption of this plan will enable the community and management of Princeton Mart to work collaboratively to protect the environment and responsibly utilize the natural resources through an elaborate environmental stewardship program.

These proposal guidelines are based on Ceres’ environmental sustainability guidelines. The guidelines cover various environmental aspects found within Princeton community.

This initiative will cover the following points:

1. Compost generation and management
2. Recycling paper, plastics and other materials.
3. Community education
4. Environmental impact assessment
5. Expansion of the initiative scope (architectural designs, energy conservation)

Compost generation and management

Princeton Mart generates close to 1.5 tons of green waste from their sales each day. The employees as well as the community at Princeton Mart can be taught to understand that nature has a way of recycling through compost generation. The company can initiate programs internally or as community-based that explore the basic composting procedure.

The employees and community have a chance of learning and practicing vermin-composting. This will be implemented on two levels at the business site and on a community owned simulated compost site. Princeton Mart will pay and engage recycle and compost management personnel to manage this project. The community can be encouraged to collect and dump all their food waste at the site for compost management.

Recycling paper, plastics and other materials

The continued depletion of natural resources and the need to better manage waste calls for the development of a recycling policy at Princeton Mart. Each day Princeton Mart handles approximately two tons of assorted plastic packaging materials. Three quarters of these packaging materials end up within the community who are the consumers. Appropriate branding has been printed on the packaging materials to encourage the buyers who use them to responsibly dispose them.

However, the company can also sustain a recycle campaign where plastic packaging materials, paper and computer waste is recycled to reduce greenhouse gas emissions. The company can also liaise with product manufacturers like computer manufacturers who can manage the e-waste at Princeton Mart.

The mart will also extend this offer to the community allowing the community to responsibly dispose their e-waste through them to approved manufacturers who will produce new products from the recycled materials.

Recycling is one of the obvious indicators that Princeton Mart is working towards environmentally responsible goals. This initiative can be extended to the community through a company sustained educational campaign.

Alternatively, Princeton Mart will enroll willing clients in fundraiser opportunities where recycled material brokers pay the Mart to collect recyclable materials from their clients who are given redeemable offers based on the amount of recyclables they bring in.

Community education

Environmental education cannot be carried out in isolation from the community. The Princeton community should be involved in the process. As far as Princeton Mart is concerned a well defined corporate social responsibility (CSR) can sustain community awareness through education and participation.

The mart’s employees and the community will be made aware of environmentally responsible behaviour through such initiatives thereby enhancing a sustainable plan. Princeton Mart management can offer their employees staff development training opportunities on different topics to help them perpetuate environmental stewardship when they are engaged in CSR activities.

The success of such an initiative generally relies on periodic impartial assessment or benchmarking. The mart’s management can engage evaluation expertise companies like Ceres to assess their progress on the various areas mentioned above. These experts can also provide program sustainability options to improve the mart’s program.

Community environmental responsibility is always an elusive undertaking. This is the reason why Princeton Mart can closely liaise with companies like Ceres to establish their green business strategy. Princeton Mart has an opportunity to work with the community in conjunction with Ceres to implement a sustainable green program.

Ceres will provide an avenue for Princeton Mart and the interested community to develop collaborative approach to address environmental issues of concern. Based on such an initiative the mart and the community identify from their environment activities that consume excessive energy with a need to eliminate such.

Other factors of consideration are like the use of toxic chemicals such as pesticides; and improving air quality through practices such as carpooling.

Expansion of the initiative scope (architectural designs, energy conservation)

A collaborative approach supported by Ceres is likely to bring Princeton Mart management on board with other like minded managers who belong to other companies who can collectively create policies that encourage sustainable development for their companies and community. Green business is becoming a necessity for most businesses today.

As such many companies realize that implementing a green strategy has environmental and commercial impact. Wal-Mart one of the leading retailers around the world has a stringent green business strategy aiming at cutting on their fleet fossil fuel consumption by 20% by the year 2013.

Honda Motors Corporation has also an ambitious green business strategy with an ultimate focus on production of eco-cars for the future. These are just some of the companies that have serious consideration for green business not just as a commercial leverage but as an environmental concern.

Environmentalists have gone to length to develop tools that can be used to measure individual and corporate contributions in terms of the carbon foot print. With such tools Princeton Mart has determined that there are various high level indicators on their foot print. As a result of these findings they consider addressing a number of sustainability indicators some of which have already been specifically highlighted above.

In general though this research proposal will summarize by pointing out the main areas of this sustainability program. Based on this, the Princeton management can initiate a strategy and liaise with other like minded companies and the community to ensure that the program is a success.

The main sustainability indicators related to Princeton Mart’s green strategy will cover the following:

Air

Princeton Mart must focus on collaborating with the community and other green business advocates to address carbon based emissions. These green house gases have been known to cause global warming and as such results in undesirable weather and climatic effects. A deliberate effort towards reducing or eliminating CO₂ emitters most notoriously the carbon based fuels is a worthy cause to undertake at Princeton Mart.

The company can also benefit from carrying out such an initiative in collaboration with known green business advocates. Fossil fuels are high contributors of the green house gas (GHGs) effects. A cut down on the production of such gases involves practices such as utilization of alternative green energy sources like wind or solar.

The choice for Princeton Mart should be clearly for renewable energy sources against the common non renewable sources. Practices such as carpooling can be advocated by the management to the staff at Princeton Mart. This is likely to minimize the energy use per capita.

The management must be able to apply democratic management techniques to win the staff and community at Princeton to support this strategy. Lobbying has been an effective technique to gain influence. Princeton management may well use this approach to be able to gain a successful campaign related to green business.

Land

Princeton Mart own large acreage on which they plant fruits and other foods for their market. Compost and other recycling practices are likely to fit well into the implementation of a green strategy for the land. The organic manure from the compost can be used to re-fertilize the land instead of using inorganic fertilizers which have a negative effect on the soil, water sources and the environment in general.

The focus by the company will be to reduce to bear level or completely eliminate soil contaminants and produce natural and safe fruits and foods for the community. Compost management practices as part of the waste management initiative at Princeton is likely to improve land quality as well. While encouraging recycling as earlier mentioned, natural resources can hence be preserved and sustained.

Environmental Health

The green business strategy has no bearing if an assessment of Princeton’s environment is not carried out in relation to a number of factors under consideration. As such studying the levels of pathogenic induced disease such as asthma or cancer or climatic change related illnesses points towards the need for a healthier environment and Princeton Mart can be a contributor to such an environment by doing green business.

Flora and fauna evolution cycles are good indicators of environmental health. Species extinction rates must be noted as this most obviously is caused by an artificially destabilized environment.

In managing an effective green business, Princeton Mart must not just have good clean programs. The company must go beyond this and take responsibility for any waste especially non degradable toxic waste.

Hawken (2010) underpins the green business based on a number of propositions. Basically, a green business serves as a restorative economy and so the products from such an economy or industry must be environmentally acceptable. Businesses can receive incentives to manufacture their products using an environmentally acceptable process.

This is likely to result in competitive advantage for such a company where their products that have a smaller impact on the environment and hence will be most preferred (Hitchcock & Willard, 2009). The spectrum of statutes and treaties governing the environment however are barriers to the successful implementation of green businesses (Esty & Winston, 2006).

The GATT treaty for instance is one of the treaties that are a barrier to the achievement of green business. Research reveals that the multinationals make use of such treaties to perpetuate a ‘free trade’ notion which is normally at the expense of the environment. As such these multinationals seen as signatories to such laws will do little or no green business campaign wherever this treaty favours them.

Conclusion

Therefore, a successful green business strategy is a worthy course for Princeton Mart based on the understanding that good environmental policy is optimal business policy (Braungart, 2002). It is desirable that an effective initiative in this light should go beyond the current rhetoric that goes with green business in order to have a lasting impact.

However, the implementation of green business policy posses some management challenges that need to be effectively addressed using the available management techniques. Green business implementation faces the greatest barriers in the social and political circles.

As such the management at Princeton must be able to lobby and look for as much support from the community and other green advocates as possible in order to push through with this strategy.

It may also be possible that resistance to such a process will stem from within the organization where some of the members of the board are against the green business approach. This may result in organizational wars that can negatively affect the organization.

Therefore, a manager in such a situation will need to be a good communicator and tactful and be able to convince the board to go on with the implementation of such a plan. Once the management has been brought on board, Princeton Mart will find it easier to incorporate the community who are their clients by using programs like those discussed at the beginning of this writing.

Strategy formulation remains a very important managerial undertaking requiring input from various stakeholders within and without the organization. Princeton Mart has earmarked a $500,000 budget to start with in its effort to re-structure and adopt the green business strategy.

However, much of the success of this program implementation depends on a combination of various factors among them the community’s goodwill because the environmental issue cannot be handled in isolation. This calls for consultations even involving environmental opinionists within the community whom the management can consult on particular environmentally related issues that are able to result in sustainability at Princeton.

There must be emphasis on the sustainability indicators and ways should be formulated on how to measure the achievements related to these sustainability indicators (Harvard Business School Press, 2007; Illinitch & Schaltegger, 2000).

This process will enable the management of the company to know whether the program is a success and to what levels. Such evaluation can be done internally or externally using green advocating bodies such as Ceres.

References

Benyus, J. (2002). Biomimicry: Innovation inspired by nature. New York: William Morrow.

Braungart, M. (2002). Cradle to Cradle: Remaking the Way We Make Things. New York: North Point Press.

Esty, D., & Winston, A. (2006). Green to gold: How smart companies use environmental strategy to innovate, create value, and build competitive advantage. New Haven: Yale University Press.

Harvard Business School Press. (2007). Harvard business review on green business strategy (Harvard business review). Boston: Harvard Business School Press.

Hawken, P. (2010). The ecology of commerce revised edition: A declaration of sustainability (Collins Business Essentials). London: Harper.

Hawken, P., & Lovins, A. (2008). Natural capitalism: Creating the next industrial revolution. Boston: Back Bay Books.

Hitchcock, D., & Willard, M. (2009). The business guide to sustainability: Practical strategies and tools for organizations (2nd ed.). New York: Routledge.

Illinitch, A., & Schaltegger, S. (2000). Developing a green business portfolio Long Range Planning, 28(3), 29-38.

Senge, P., Smith, B., Kruschwitz, N., Laur, J., & Schley, S. (2010).The necessary revolution: Working together to create a sustainable world. New York: Crown Business.

The successful creation of a product depends on quite a number of factors such as the company’s collective health. Organizations have a special role in the business ecosystem and should enlighten its stakeholders on issues regarding the ecosystem. The use of stand-alone strategies is no longer suitable for companies that have an intention of improving their production and delivery systems.

Business ecosystems are very critical in the day to day running of organizations. Companies that have enjoyed considerable success such as Microsoft and Wal-Mart employ aggressive strategies that enhance the success their business ecosystems. A business ecosystem is a network of different companies ranging from suppliers, outsourcing firms, distributers, product manufacturers and technology providers.

All the components of a business ecosystem have a special contribution towards the success of an organization. The internal capabilities of a company can only be enhanced with a healthy business ecosystem. The sharing of real-time information among different members of a business ecosystem enhances its performance and at the same time making organizations to be very competitive.

The symbiotic relationship between different members of a business ecosystem brings customer satisfaction. Companies that have a working relationship with market leaders such as Microsoft and Wal-Mart benefit from the creativity and innovation within the industry. Some companies establish business networks beyond their respective industries o promote a healthy business ecosystem.

The concept of business ecosystems has become very popular in modern business due to the success that companies like Microsoft and Wal-Mart continue to enjoy. Many organizations are not well informed about the concept of business ecosystems and this has led to the mismanagement of ecosystems. The health of a company’s business ecosystem should be assessed on regular basis using the recommended framework.

There are lot of companies involved in the manufacturing and distribution of a single product such as a personal computer. All the companies involved in the manufacturing and distribution of a product form a business ecosystem. A complex eco-system can also be subdivided into different segments known as business domains.

The domains should be healthy for the entire ecosystem to deliver the desired results. There are a lot of similarities between a business ecosystem and a biological ecosystem especially when it comes to assessment. The health of an ecosystem depends on its productivity, robustness and niche creation. The transformation of inputs such as raw materials and technology into quality products at a lower cost demonstrates the productivity of a particular company.

The productivity of a company can be used to determine how healthy a business ecosystem is. The returns from a capital investment reflect the effectiveness of a business ecosystem. The ability of a business to survive all kinds of disruptions is another indicator of the state of an ecosystem’s health. The disruptions may be brought about by unexpected technological changes or other external shocks.

Companies should be able to create new business niches to demonstrate diversity. Diversity is another perfect indicator of a healthy business ecosystem. The biological ecosystem is therefore a very useful analogy when it comes to modern business networks. Companies that have common assets which are predictable and stable enjoy healthy ecosystems.

Organizations with stable systems and assets are referred as keystone organizations. Keystone organizations are very important especially when it comes to introducing robustness in a business ecosystem. The keystone strategy is meant to create and share value among other organizations within a business ecosystem. The aims and objectives of an organization determine the ecosystem strategy of a company.

Keystone strategies are very useful when a company is involved in complex interrelationships with other companies. A company can benefit a lot from business ecosystems by extracting some maximum value form the assets within the network. The ecosystem strategy is not a must for companies that operate independently. Flexibility and innovation are some of the benefits that companies with effective keystone strategies continue to enjoy.

Some keystone organizations may want to dominate an ecosystem because of their powerful position within the system. The domination of a business ecosystem by keystone organizations can either be direct or indirect. Physical domination takes a direct form whereas the value domination takes an indirect form.

The niche strategies are very useful when it comes to differentiating a company from others within the same business ecosystem. Companies tend to leverage their niche as a way of enhancing their domain. Leveraging a company niche within a business ecosystem protects smaller firms from staying in the shadow of keystone organizations.

The ecosystem strategy clearly highlights the need for companies to work together. Business managers have to consider a business ecosystem strategy when it comes to product design and policy implementation. Business ecology enables companies to access resources from other companies within the ecosystem. Integration is a new form of innovation that promotes business operations within a business ecosystem.

Technological evolution is a product of innovation across the different domains of a business ecosystem. Business competition has shifted from individual companies to between ecosystems and the trend is expected to remain the same in the future.

Introduction

In the wake of globalization and shifting technological landscape, many international businesses have opted to seek markets in emerging economies. The prevalence of increased avenues for information dissemination is a definite trend that favors foreign trade as people continue to share ideologies via modern information and communication technology. Such technological advancement accelerates the spread of intellectual ideas from one part of the world to another. Besides the central role of technology in the contemporary world, various vital factors underpin the development of ideas into profitable international businesses. These factors comprise informal and formal institutions. They control business strategies based on social, economic, and political landscapes of the international market. This paper critically examines the role of institutions regarding the interventions of venture capitalists in foreign direct investments (FDIs).

Describing Institutions in the Context of Business Strategy

Business institutions can be classified into formal and informal types depending on strategic decisions. The former comprises laws, regulations, and rules that are regulated by the coercive power of the government. The latter entails norms, cultural, and ethical factors that are supported by the normative and cognitive pillars. According to Peng, Wang, and Jiang (2008), the normative pillar refers to how norms leverage the behavior of individuals and businesses. A cognitive pillar in the context of business strategy defines the organizational propositions and values that govern the internal and external environment of a firm. The chief role of these institutions is to reduce uncertainty for foreign investors. There are two forms of economic transactions in which business institutions reduce uncertainty namely relational contracting and arm’s length transaction. Firstly, the informal exchange is whereby the firms or individuals conduct business in a friendly manner (Peng et al., 2008). For instance, there is no need for signing an IOU note in the event of borrowing money from friends to start up or expand a business. This form of transaction is governed by informal norms and cognitive beliefs based on the real meaning of friendship. It is also referred to as a personalized exchange transaction (Peng et al., 2008). Secondly, economic transactions can be facilitated by the arm’s length form. In this case, the transaction is formal and entails impersonal exchange with third-party enforcement. This practice is adopted when the scale and scope of economic transactions are high in a way that warrants enforcement through third-party formal market-supporting institutions.

Role of Institutions in Foreign Market Entry

According to Kaufmann and Roesch (2012), institutions play a crucial role when firms strive to enter a foreign market. Based on the institutional theory, national culture underpins the recognized context of society. Culture is responsible for modeling the legitimate social and business activities in particular environments. Different business cultures result from diverse organizational practices and employee expectations. International business scholars regard the variations amongst national systems as cultural distance. Kaufmann and Roesch (2012) affirm that the cultural gap can result in increased transactional costs for MNCs in both regional and international markets. For instance, various studies reveal that cultural distance can potentially increase the costs of internal communication. Since the scope of communication is based on multifarious business archetypes, the efficiency of information exchange will be significantly reduced when it is applied across different cultures. Communication barriers prevent parent companies from transferring firm-specific benefits to foreign subsidiaries. Campos and Lootty (2007) posit that implicit routines and knowledge that are necessary for internationalization are harder to apply in some multinational corporations. At the outset, interacting with foreign associates results in a cultural distance that increases the operational costs by eroding mutual understanding. Therefore, foreign firms find themselves engulfed in the challenges of identifying and interpreting unfamiliar business environments (Campos & Lootty, 2007; Xuegong & Liyan, 2013). This situation costs foreign firms a fortune. It can take years for them to adapt to different cultural patterns. Furthermore, a likely misunderstanding can arise between foreign investors and native actors due to their discrepancy in terms of societal expectations. Therefore, mutual trust can diminish before the accomplishment of the business objectives due to the existence of social conflicts. The wider the cultural distance between foreign and host countries, the higher the transaction costs, and perceived uncertainty by foreign investors. The propensity of MNCs to invest in foreign markets is dictated by the cultural patterns of the host country. Even in the wake of accelerated global integration and cultural globalization, local cultures still have a significant effect on the location choice of MNCs (Campos & Lootty, 2007).

Formal institutions also influence the investment practices of multinationals. They set up the rule of the game in a regular way by defining prospective business activities. Cultural systems together with the formal institution build an overarching industry framework that affects economic activities (Peng et al., 2008). This objective is achieved through the manipulation of political and economic dimensions. The two perspectives govern both social and business activities more explicitly than the culture. The formal institutional risk has a direct influence on the operating efficiency of international businesses. The risks of political institutions refer to creditability and volatility of policies. However, the government’s strictness to the enforcement of unbiased business law determines the commitment of firms to the global market. In contrast, companies will avoid investing in countries that are characterized by corruption and a lack of legal enforcement (Xuegong & Liyan, 2013). Political instability raises operational costs and returns impediments. Also, unanticipated policy changes have significant effects on the operations of multinationals. A less stable political regime promises a reduced amount of investment returns.

Furthermore, economic institutions also support the formal business framework. The market direction and economic compositions form the foundations of a suitable international business environment (Campos & Lootty, 2007). For instance, national economic formal arrangements provide unique enticements and barriers to corporate operations. Economies that are characterized by freedom and low risks attract foreign direct investments. Low formal institutional risks and less hazardous political and economic factors are vital baits for foreign investors. Some MNCs from countries that do not have proper intellectual protection provisions tend to move abroad to seek them. As a result, emerging market multinationals (EMNEs) tend to choose countries with flawlessly established formal institutions for their investments. Peng et al. (2008) posit that institutions that are established well encourage the entry of unfamiliar investors since they enjoy business protection due to the existence of a developed institutional framework. Also, entrepreneurs can borrow money from the local banks of the host country that do not charge exorbitant transaction costs. In such favorable business climates, economies gain an opportunity to expand enormously. On the contrary, countries that have unfavorable business laws shun away from foreign investors.

For instance, a country such as Somalia in Eastern Africa that has been involved in terrorist activities for nearly two decades cannot attract international firms from countries such as the US. This situation is a clear indication that countries with unstable governments and formal institutions shun away investors (Xuegong & Liyan, 2013). They are characterized by lawlessness and the unavailability of stable banks. Such states of affairs force potential entrepreneurs (both local and international) to reconsider investment decisions. In Somalia, informal institutions have not been established properly due to a lack of trust among the citizens themselves. As a result, financiers dread lending money to entrepreneurs since terror gangs can ambush them. The economy of Somalia has remained crippled for over twenty years; hence, the availability of substantial lenders to finance businesses in such environments is extremely skeptical (Xuegong & Liyan, 2013).

Conclusion

Entering a foreign market is not an easy task. The process is underpinned by numerous institutional factors that can be very complicated. This review reveals that the existence of local culture creates a cultural distance between foreign investors and local actors of the host country, even with a wave of globalization inevitably defining modern business practices. Furthermore, formal institutions have the potential to control the business climate of a country. This situation can either favor or prevent foreign investments. Both political and economic dimensions form the basis of government regulations. These factors influence the level of certainty and operating costs for foreign businesses in the host countries; hence, they determine the economic viability of such markets. This state of affairs affects foreign direct investment decisions significantly.

Reference List

Campos, N., & Lootty, M. (2007). Institutional barriers to firm entry and exit. Economic Systems, 31(4), 346-63.

Kaufmann, L., & Roesch, J. (2012). Constraints to Building and Deploying Marketing Capabilities by Emerging Market Firms in Advanced Markets. Journal of International Marketing, 20(4), 1-24.

Peng, M., Wang, D., & Jiang, Y. (2008). An institution-based view of international business strategy: a focus on emerging economies. Journal of International Business Studies, 39(1), 920-36.

Xuegong, S., & Liyan, G. (2013). Market entry barriers for foreign direct investment and private investors. East Asian Energy System Management Challenges, Energy Strategy Reviews, 2(2), 169-75.

Schneider National adopted diversification as its principle business strategy. This is where the company’s management decided to respond to their customers demand for changing carriers after the new regulations by the government were effected, thus demanding the trucking firms to change their operations.

Schneider, therefore, chose to utilize information technology to improve the execution of its core processes and enhance the company’s structural position. This strategy enabled the company to achieve a great competitive advantage.

The role of telecommunications and information systems in that strategy

Telecommunications and information systems played a key role in the success of this strategy. Being enshrined in the company’s philosophy, the management used information technology to come up with programs that not only eased its operations but also led to customer and employees’ satisfaction.

How Schneider’s information systems changed its business processes

Information systems revolutionized the whole business process making it an admiration by competitors. This is where the systems were designed to reduce the paperwork since the customers’ orders could now be received through the web and the company’s Electronic Data Interchange (EDI) system.

The company’s website also enabled the customers to make orders online using a browser and even track their orders to ensure they were delivered according to specifications. The system also enabled the drivers to avoid communication problems since they could use the system to communicate to the management at any destination.

Management, organization, and technology issues Schneider National had to address

With the launch of this technology, Schneider National had to address several issues. Firstly, the response of the drivers towards the system was a major concern. The company had to establish that the drivers were conversant with the way the system operated and whether they were comfortable using it. Secondly, the company had to address the logistics that would make the system operate effectively.

With the massive number of tasks that the system would work on at a time, the company needed to collect enough information about the clients and their loads and the trucks among other details in order to feed into the system making it fully functional. In order to win the satisfaction of the customers on the new system, the company had to ensure that their representatives understood how it functioned.

The company, therefore, had to dedicate four to six weeks of training to the new customer representatives in order to make them gain the skills of using the system.

Schneider’s success due to reliance upon information systems

Through offering training to its drivers and customer representatives, the systems led to improvement of ordering accuracy and general productivity. Information technology also enabled the employees to appreciate their jobs as it made their operations easy through improvement of communication, which is important to them.

The system also led to the company achieving an important goal in business – customer satisfaction. The company has also managed to get a strategy that will assist it to retain its drivers since they can use technology installed to keep in touch with their families. Another success of the system can be evaluated on the amount of expenses the company has managed to save thus increasing its profits.

The company’s transformation into a digital firm

Schneider National reliance on information system achieved its goal of transforming the company into a digital firm. This can be witnessed by the company’s step of using the electronic connections to transfer orders automatically to the company’s computer system.

As a result, the company has achieved increase in its level of accuracy, speed and productivity. In addition, using the computer-effective and dynamic websites, customers can now interact with the system to make orders and later track the products ordered to know the vehicle carrying the goods and the time of its arrival in various destinations.

Background Information

Cisco is a business leader in the provision of networking services. It offers internet solutions to individuals, corporations, and countries to enable them access information easily.

The idea of these services was borrowed from a couple, Leonard Bosack and Sandy Lerner, who wanted to link their computer systems together. Through their innovation, they formed a multi-protocol router. This opened potential for the world to link computer networks together, just like the telephone networks. A group of scientists from Stanford University founded Cisco in 1984.

They renovated and developed routers and switches, storage networking, wireless LAN among others to form a wide range of products and service. They began competing in the Local Area Networks. Today, they have advanced to become a global leader internet and intranet services (Graduate School of Business Stanford University, 2000). The following is an analysis of Cisco Company and the contributing factors towards its excellent performance in business.

An Analysis of Cisco

The company’s mission statement is “to always communicate with transparency and Integrity” (Cisco Systems Inc, 2012, para 1). The vision is “to be the Best in Class for Cisco’s Investors and Analysts and to be the Strategic Partners for Management” (Cisco Systems Inc, 2012, para 1).

The core company values are corporate citizenship and a dedicated customer focus. It has endeavored to help the communities to prosper by meeting the needs of the society. As part of its corporate social responsibility, the company has established Cisco Networking Academies in more than 128 countries. This also includes programs to promote environmental conservation and charity. Students are taught on designing, building, and maintaining computer networks (Cisco Systems Inc, 2012).

The modern customer requires a value added product or service. Thus, the company focuses on technical expertise to promote customer satisfaction. Customers delight in the superior products provided with a warranty range of limited lifetimes. It also offers financing and leasing opportunities to its customers and partners to give them the ability to acquire new technologies or update the existing ones through programs that are flexible and easy to use (Cisco Systems, 2003).

Cisco’s corporate strategy was based on client attention in which the company sought to surpass the anticipations of the clients. The company worked closely with the enterprises, service providers, and small and medium businesses to grow its markets. Customers have a perceived value that this brand offers products that are secure, and of a quality that is reliable and high performance (Graduate School of Business Stanford University, 2000).

Employee satisfaction is high because the company supports its employees to ensure that they are comfortable while working inside and outside the job environment. For instance, employees with young children do not have to worry about leaving their young kids at home.

They have been provided with an on-site day care and a flexible schedule that allows them to work from home for at least 2 days in a week. Their health is also improved by the provision of a pharmacy and free consultation services where minor ailments can be treated. The working experience is great and the company has a talented workforce with a learning culture. The younger employees are trained by the senior ones to improve on their competence (Glass door, 2007).

Conclusion

Cisco specialized in building a brand to become a market leader in networking products and services. Through its employees, the company has identified its market needs and has surpassed client expectations. It has the potential to grow continuously since skills and expertise are passed down from the senior employees to the junior ones. It has added value to the society by improving communication through its products and the general welfare through CSR projects. Cisco creates a positive impact in the society.

References

Cisco Systems Inc. (2012). Investor Relations. Web.

Cisco Systems (2003). Cisco Products Quick Reference Guide. Web.

Glass door. (2007). Cisco Systems Employee Review. Web.

Graduate School of Business Stanford University (2000). Cisco Systems: A Novel Approach to Structuring Entrepreneurial Ventures. Web.

When a business entity is well articulated and driven towards the expected direction, it amounts to a business strategy. In other words, a business strategy entails the process of formulating and implementing the set objectives in the most articulate manner. Therefore, there are various elements that support a business strategy.

For instance, an excellent business strategy does not lead to unhealthy competition. It should be unique in nature. In addition, it should embark on delivering the diverse tastes and preferences of customers without conflicting with the prevailing market competition (Kourdi 76). At this point, it is vital to mention that aspiration should not be misconstrued with strategy. For instance, to become the best supplier of electronic products is simply an objective and not a strategy.

A business strategy that has been adequately formulated defines the goal or specific objectives of a business entity. The limits for attaining the set goals are also outlined in a business strategy. A good business strategy should clearly define the purpose and needs of the business. It should be appreciated that a thoughtful process is requited when formulating a functional business strategy.

It also demands flexibility and a balanced approach so that the actual purpose and need of the business are clearly outlined (Stonehouse and Houston 103). The ability of a business entity to attain purpose and need is largely dependent on adequate information of the targeted market.

For example, the needs of customers should be given top priority when designing the end products. In addition, the purpose of products and services that have been availed in the market should be put into consideration when formulating a business strategy (Kourdi 76).

Due to the modern and dynamic market, it is vital for a business strategy to be relatively flexible so that it can conform to the myriads of changes in the business world. A strategy should allow space for modification on a regular basis because a static strategy may fail to be progressive. In a nutshell, some of the overall elements that should be addressed by an excellent business strategy include:

• The main aspirations and purpose of a business entity
• The channel that has been chosen for purpose of growth
• The core reasons for choosing the given channels
• The methods for executing the strategies
• Modes of sensing, monitoring and adjusting changes

A case study of Dell Inc. reveals a vivid competitive advantage that the company has enjoyed for several years (Hill and Jones 149). The computer manufacturing company has successfully managed to meet the individual tastes and preferences of its customers by manufacturing computer products according to the specifications of their individual clients.

When customers place their orders at the company, they are also supposed to include their product preferences in terms of color, size, and even design. These specifications are then used to model the actual end products in the factory.

Dell’s business strategy is clearly evident at this point bearing in mind that the company has managed to meet the separate needs of customers without disrupting competition in the market. Moreover, the element of uniqueness has been brought out clearly since there is no other computer manufacturer who is customizing products for consumers (Hill and Jones 149).

To recap it all, it is vital to reiterate that an excellent business strategy should be in a position to meet the market demand and the intended purpose. When a business strategy is well formulated, it leads to a viable competitive advantage.

Works Cited

Hill, Charles and Gareth, Jones. Strategic Management: An Integrated Approach: Theory. Mason, OH: Cengage Learning, 2010. Print.

Kourdi, Jeremy. Business Strategy: A Guide to Taking Your Business Forward. London: Profile Books Ltd, 2009. Print.

Stonehouse, George and Bill, Houston. Business Strategy. Oxford: Heinemann, 2002. Print.

Today there are a lot of different approaches to understanding of the concept of business strategy. If we consider the problem from a contemporary perspective, this concept can include the peculiarities of the process of adopting of appropriate action plans and distributing of the resources for carrying out the plans to meet the desired objectives.

Moreover, there is the problem of determining of the most effective and significant approaches to examining of the principal theories for the strategy development.

There can be defined two approaches which require further studying with the references to the peculiarities of the modern business tendencies. They can be considered as the prescriptive and the emergent approaches (Mintzberg 1990).

Referring to the peculiarities of the emergent approach as the ‘hustle as strategy’, Bhide (1986) affirms the critical importance of this approach to strategy in a financial services business firm.

Embracing this approach to the strategy development, he presents a scenario where the firm can take the advantage of transitory opportunities. Bhide affirms that flexibility, agility, and hustle are more important than a fixed plan.

Employing the processual view of business strategy, he postulates that the strategy is a continuing process of negotiation and adjustment of routines, as a way to make sense of the chaos in the world (Bhide 1986).

Thus, such strategies are seen as ‘emergent’, with their coherence accruing through the action and perceived in retrospect, while successive small steps eventually put the organization ahead in terms of customer focus, profit maximization and market leadership (Harfield & Hamilton 1997a).

However, Bain (1959) discussed the environmental setting in which firms operate, rather than the internal operations approach, the primary unit of analysis of the industry and not the individual firm or overall business sector.

Furthermore, Whittington (2002) presents four basic schools of thought as approaches to the business strategy. Classical school discusses a rational or objective approach. It places great confidence in the readiness and capacity of managers to adopt profit maximizing strategies through rational long-term planning.

Evolutionary school alleges that markets and not managers dictate strategies to be employed in particular environments. According to Williamson (1991) the evolutionary view of competition sees organizations that survive as only those that adapt themselves to the environment.

The representatives of processual school believe that it is not the environment or the calculated rationality by managers that are important. Instead, they consider organizations as coalitions of individuals, each of whom brings their own personal objectives and cognitive biases to the organization (Mintzberg 1990).

There is also a systemic approach which takes into consideration the social environment the firm is revolving in. Huff (1990) affirms that this social constructivist view suggests that only cultural and not cognitive norms guide strategy.

The business strategy presented by Bhide (1986) in the article belongs to the processual school, which focuses on compromise, adjustment and quick fixes as dictated by the environment. As it was mentioned above, he presents a scenario that concentrates not on ‘strategy’, but on ‘tactics and execution’ (Bhide 1986). It takes a reality perspective, rather than an idealist one.

It seeks to simplify complex processes through harnessing of the varying skills of an organization’s members who bargain amongst themselves towards achievement of set goals. Customer focus and orientation are directed towards the profit maximization, rather than competitive approaches against other competing organizations.

When we compare the prescriptive approach and the emergent approach we can state that the prescriptive approach concentrates on the peculiarities of the processes in management from the point of systematical, continuous, objective and balanced forms and ways of its realization.

The analysis of the emergent approach proves that this approach does not tie organizations down to mission, goals and objectives or the predetermined long-term plan.

Nevertheless, Mintzberg (1990) determines such advantages of contemporary strategies as the possibilities to change the direction according to the challenges of the constantly developing business reality.

The flexibility of contemporary strategies is the requirement of the modern tendencies in the development of the business processes. From this point of view, the emergent approach can be considered as one of the most appropriate to the realization of the most effective and competitive strategies and their requirements in the context of evolving business processes today.

Bhide (1986) provides his own vision of the approach to the realization of the strategies in the article. He focuses on the possibilities of transformational and organizational changes. It is also important that there discussed the opportunity for the strategy to form and realize its main principles according to the approach.

This approach also can be compared with the empirical research by Mintzberg (1990). As it was stated, the approach presented in the article by Bidhe (1986) can be considered as the ability to develop the organization’s opportunities.

Moreover, there is the opportunity to react to the requirements of the contemporary business environment. Such needed transformational changes where reinvention is required can be analyzed as not hindered. Nevertheless, there is a risk that the strategy development can become rather slow and not to be suitable for the requirements of the business situation.

Also, conflicting objectives from different members of the organization can hinder the strategy development. Over-reliance on the emergent strategy formation could result in underperformance of the organization in the short and long run (Bidhe 1986).

That is why it is significant to note that the strengths and weaknesses of Bidhe’s consideration of the problem of strategies and approaches to them can be analyzed according to the peculiarities of the requirements of the contemporary business environment organizations.

Thus, these strategies should be flexible and rather changeable. From this point of view, the emergent approach can be thought of as the most appropriate to new opportunities of the process of the strategy’s development and to modern requirements of the society.

The complementation of these two approaches rather than their mutual exclusivity should be considered as a future direction for organizations to plunge into.

Nevertheless, the problem is in the fact that the realization of this strategy can result in a number of actions which can be considered as the ways of preventing or declining of the level of the organization’s control. In any case, the monitoring and control phase of the prescriptive strategic planning approach contributes to regular tweaking of the plan in line with changing environmental factors.

References

Bain, JS 1959, “Industrial organization”, Joe S Bain Wiley, New York.

Bhide, A 1986, Hustle as strategy, Harvard Business Review. pp. 59-65

Harfield, T & Hamilton R (1997a), ‘Journeys in a declining industry’, Journal of Organizational Change Management, 10(1), pp. 61-70.

Huff, AS (ed) 1990, ‘Mapping strategic thought’ Chinchester, John Wiley & Son.

Mintzberg, H 1990, ‘Strategy formation: schools of thought’ in JW Fredrickson (ed) Perspectives on Strategic Management New York: Harper Business, pp. 105-236.

Whittington, R 2001, ‘What is Strategy – and does it matter?’, Thomson Learning, UK.

Williamson, OE 1991, ‘Strategizing, economizing, and economic organization’, Strategic Management Journal, 12: 75-94.

The introduction: the fundamentals of EasyJet

EasyJet Airline Company Limited is famous United Kingdom-based airline, which appeared in 1995. It was founded by Greek businessman. The company is recognized to be one of the most low-cost airlines in Europe. The major point of a company’s business strategy is its fare structure.

In most cases, the clients use the Web, phones to reserve a seat. In other words, the success of the business strategies the company develops depends upon the so-called time policy. Management staff of EasyJet Airline Company Limited explains that the company’s marketing strategies rely on supply and demand.

Koenigsberg, Muller & Vilcassim (2004, p. 1) state that “the magnitude of the increase in price from the first date of seat sales to the departure time is dependent upon the capacity of available seats between the given city pair, and varies inversely with it”.

The thesis statement

To forecast the operation of Strategic Business Units, Information Communication Technologies are to be applies in a proper way. The success of business strategies of EasyJet Airline Company Limited depends upon strategic and tactical management the company relies on.

The body: the company’s business model

The key points of the company’s business model are value proposition (the main principle is to provide the mass market with effective services); simple inputs (there is only Boeing 737, which is used); pervasive technologies (the company applies new technologies to avoid unnecessary costs); simple outputs, i.e. “the company offers no-frills stripped-down services.

A horizontal scope based on common elements in providing a low-cost, efficient service to mass-market customers, where the common Internet technology and “easy” brand provide more relatedness than the actual services themselves” (Business Strategy Review 2004, p. 20); a geographic scope; the same clients (as a rule they are young), and a focused organization.

The success of the organization began with its parent company EasyGroup’s.

“EasyGroup’s expansion from airlines into car rental, Internet cafes and financial services represent incremental rather than radical changes to its core business model” (Business Strategy Review 2004, p. 21).

The conclusion: the basic ways to improve business strategies

In my opinion, further success of the organization depends upon its information communication technologies or their modernization. I would like to point out that strategic tools of the company are to be improved due to ICTs.

To strength the competitiveness of the company, ICTs are to be properly applied. “As businesses can interact more efficiently, competent businesses became digital and networked, facing a whole range of fresh opportunities and challenges” (Buhalis 2003, p. 805). That’s why my decision is based on ICTs improvement or innovation.

I suppose that the company’s business strategies can be modernized due to strategic management. I think there is a need to create a platform for collaboration. It means that the company is to cooperate with various partners. This leads to really pleasant consequences: for instance, the company will improve not only the strategic orientation, but also the tactical one. ICTs improvement is needed to control the external environment.

Reference List

Buhalis, D 2003, eAirlines: Strategic and Tactical Use of ICTs in the Airline Industry. Web.

Business Strategy Review 2004. Web.

Koenigsberg, O, Muller, E, & Vilcassim, N 2004, easyJet® Airlines: Small, Learn, and with Prices, that Increase Over Time. Web.

Introduction

Aramex Delivery Unlimited pioneered in1982 and it mainly focused on offering express services. Currently, Aramex offers transportation coupled with logistical services.

Headquartered, in Jordan at Amman, the organisation also provides services such as domestic distributions, express services, forwarding, and freight services among others (Aramex Delivery Unlimited 2014).

Aramex is now a global brand recognised by customers through the provision of customised supply chain services. This paper discusses Aramex Company by strategically mapping its supply chain with a view of pinpointing areas of risk within the supply channels.

It also proposes how to manage the identified risks. Finally, the paper offers recommendation on the risk areas in the supply chain management approaches for Aramex.

Aramex business and strategic goals

The success of Aramex in its global business depends on the development of effective supply chain management, which is consistent with its strategic goals.

Supply chain management refers to overseeing the movement of goods and services, finances, and information from the point of production to wholesalers and then to the end users, viz. consumers. Ketchen and Hult (2006, p. 573) note that it also encompasses ‘coordinating and integrating these flows both within and among companies’.

Supply chain management is an important function in an organisation. According to Ketchen and Hult (2006, p. 574), ‘organisations increasingly find that they must rely on effective supply chains or networks to compete in the global market and networked economy’.

The main goal for Aramex entails facilitating the achievement of these functions of effective supply chain management on behalf of its clients who are mainly organisations seeking to transport and distribute their products and services across the globe.

Aramex believes that supply chain management occupies its epicentre for operational efficiency. This value helps in the development of an important goal of the company, which entails ensuring smooth and efficient movement of goods coupled with services from manufacturers to retailers and then to the end users.

Aramex Delivery Unlimited (2014, par. 4) states that customised solutions ‘have helped clients in reducing inventory costs, increase transaction speed, and improve sales by implementing customer requirements more efficiently’.

This assertion implies that Aramex’s main strategic goal ensures that its supply chain management system, which is utilised by the company’s clients, reduces the cost associated with supplies.

This goal measures up to the concerns of effective supply chains, which focus on availing products and services whenever they are required and in a manner that ensures the increasing numbers of products that need to be availed in the market are sustainable (Ritchie & Brindley 2007).

Aramex explores sustainability in chain supply management as a business strategy. The company engages in corporate social responsibility (CSR) to drive its sustainability business strategy.

Integrating CSR in supply chain management implies that an organisation behaves in a socially responsible manner while establishing distribution networks for products coupled with proper treatment of wastes arising from its operations.

Indeed, Aramex not only engages in community work coupled with environmental stewardship, but it also involved in the development of mechanisms of reducing carbon footprints.

Organisation of supply chain at Aramex

Aramex organises its supply chains according to various facets that comprise the tasks of effective supply-chain management arm of an organisation.

This arm includes transportation of products from the manufacturing locations to warehouses, tracking of the products in warehouses, and their subsequent distribution until they reach the consumer.

In a bid to ensure that clients possess direct control and ability to track their products, Aramex deploys innovative technological interventions in its supply chain management.

Aramex stores clients’ products in its different warehouses located across the globe. According to Aramex Delivery Unlimited (2014, par. 8), this aspect involves ‘offering bonded or duty-paid options to cater for the different needs of customers in all industry segments’.

While clients’ products are in these stores, incorporation of technology in supply chain management at Aramex ensures that clients have real-time visibility of stocks. It also provides them with the capacity to control the levels of stocks directly in an effort to streamline order cycles coupled with purchases.

In case clients have their own stores, Aramex supply chain services are also important. The company’s dedicated experts offer services such as warehouses facility management to such clients.

Aramex Delivery Unlimited (2014, par. 8) notes that the main goal here entails ‘minimising wastes, creating better space utilisation, selecting right equipments, and streamlining running expenses’ at the clients’ owned warehouses.

Aramex offers value added services, freight forwarding, customs clearance, distributing, consulting services, IT services, and professional engineering design among others. In distribution, client visibility is provided through GPRS devices installed in the company’s trucks.

Consulting services offered at Aramex, as part of organisational supply chain, include facility evaluations and analysis of supply chain strategies deployed by organisations.

This undertaking aims at making a recommendation on how organisations can improve their supply chains and logistical abilities to minimise costs associated with these tasks.

Through professional engineering design, Aramex provides clients with complete warehouse design plans to facilitate ease of material handling coupled with provision of adequate operational areas.

Alignment of supply chain with the strategic goals of the company

Alignment of the Aramex’s supply chain management with strategic goals of the company compels it to embrace the perspectives of sustainable supply chains. For instance, the company engages in activities such as planting tree in various arid and semi arid areas coupled with making use of trucks in enhancing its logistics, which are greener in terms of carbon dioxide gas emission.

This aspect helps in the reduction of excessive costs on the environment that would have been incurred if individual organisations transported their products from point of production and across the distribution channels until they reach the consumers using their less green trucks.

The application of the concepts of green supply chains aligns well with the strategic goal for enhancing sustainability in supply chains. Sustainable supply chains ensure that the environment does not suffer from any harm due to organisational operations.

This assertion suggests that sustainable supply chain entities at Aramex should encourage the implementation of various eco-friendly technologies.

One of such strategies entails phasing out paper documentations. Leclerc (2012, p. 68) support this strategy and further notes that while ‘there are advantages to paper, the sheer amount used coupled with innovative technology has made it apparent that it is time for a new direction’.

Arguably, the most preferred direction is the one that will ensure that supply chains approaches become cost-effective and give an organisation the benefits of competitive advantage.

In a bid to shift to more eco-friendly supply chains, Aramex deploys paperless technological interventions to facilitate its supply chain management and logistics. It also uses recycled papers as part of the company’s green strategic goals.

In aligning the strategic goals of Aramex with supply chain, the company incorporates perspectives of social corporate responsibility. Maloni and Brown (2006, p.43) argue that some ‘regulatory directives oblige companies to consider the environmental impacts of their products and operations’.

While deriving strategies deemed as necessary for ensuring sustainable supplies, it is important to evaluate the relationship between the strategies and such directives in a bid to determine whether they are in conflict. All this elements entail attempts of ensuring that an organisation is socially responsible.

In its supply chain strategic goals, Aramex identifies people as one of the major issue of concern in its supply chain design operations.

In the company, the term ‘people’ refers to clients, employees, consumers, which the company facilities their distribution, and those affected by consumption of products through effects such as environmental landfills.

The company addresses the concern of these people in its supply chain management approaches through the adoption of supply chain strategies that enhance wastes reduction, reduction of costs of handling inventories, and ensuring environmental friendly manner of products’ distribution.

The perception of value of an organisation to society is perhaps one of the important factors that enhance its acceptance as a responsible company by communities within which a firm bases its operations. Aramex considers prefers the adoption of strategies that ensure the supply of products in a green way.

This element is crucial in ensuring that goods are produced and distributed without attracting high social costs to consumers and other stakeholders. Such costs include reduction of the extents of global warming by reducing the emission of green house gases.

Christopher (2005, p.78) emphasises that an organisation, which seeks to succeed in the efforts to achieve sustainable chain supplies, should ‘focus on one or more attributes that customers perceive as important, which usually leads to low cost levels’.

In the contemporary globalisation era, impacts of global warming entail one of the issues that are considered incredible by customers. Aramex responds to this concern by ensuring that its operations produce minimal negative impacts on all stakeholders that are concerned with how the company operates.

In the effort to align its supply chain with its strategic goals, Aramex supports communities. Aramex Delivery Unlimited (2014, par. 10) states that the company ‘is keen on continuously practicing its citizenship by being an active partner in development and serving its communities and the environment’.

It achieves this goal through supporting entrepreneurial initiatives in societies where it bases its operation across the globe. Aramex also engages in youth empowerment programs coupled with sponsoring various sports. All these activities help in developing the perception of organisational value to communities across the world.

Future challenges or risks in supply chain design and operation

Supply chains practices at Aramex ensure the reduction of inventory levels. Tracking supplies using paper files is an immense hindrance to the creation of sustainable supply chains. According to Leclerc (2012, p.68), ‘it is much more difficult to keep track when it comes to inventory and similar data files’.

Although one of the green approaches to the creation of sustainable chain supply driven by perspectives of green supply chains is through recycling of paper, a more effective way is the creation and embracement of technological ways of maintaining supplies data through mechanisms such as holding data in soft form.

Aramex strategically focuses on programs for the creation of sustainable supply chains. This initiative covers transformative processes meant to outline various comprehensive roadmaps for detailing various approaches that are implementable to ensure that business partners remain committed towards the achievement of green technology in supply chains.

Aramex deploys technology to provide real-time tracking visibility for customer products. However, it still uses paper-based labelling techniques. For, instance, Aramex Delivery Unlimited (2014, par. 9) notes that ‘Aramex value-added services range from labelling, kitting, to light manufacturing and software installation’.

Although labelling may involve the utilisation of recycled paper, it still presents a major risk in the company’s strategic goals as tracking technology continues to improve. Arguably, through such labelling, customers lack the ability to track every product.

Many organisations are resorting to mass customisation of the production process. For instance, a customer based in Georgia, USA, can order for a pair of shoe in a Chinese-based manufacturing company through modern mass customisation production techniques.

The company manufactures the product (pair of shoes) to customer specification and delivers it in the shortest time possible. Through such emerging production approaches, Aramex will face challenges in providing real-time visibility to individual mass-customised customer products as they move from point of manufacturing to point of consumption.

This assertion implies that the focus of Aramex on establishing its own warehouses may soon become an obsolete consideration in supply chain management.

Arguably, mass-customised products are made for specific customers. Consequently, large volume storage in warehouses is unnecessary. Labelling of such products may also be unnecessary. Therefore, Aramex should prepare to face the challenge and take the risk of investing in advanced and emerging technologies, such as the use of microchips, for tracking individual entities.

Manufacturing outsourcing is also becoming a major strategy deployed by organisations to reduce the production costs by relocating manufacturing operation to nations having low costs of labour and other inputs (Ritchie & Brindley 2007). The relocations are not permanent.

An organisation shifts its production facilities from a nation to another as cost of production changes. In the era of manufacturing outsourcing, establishing and locating warehouses strategically to target certain manufacturers constitutes a major challenge that faces Aramex.

Recommendation and conclusion

The changing technology and manufacturing approaches such as outsourcing and mass customisation of manufacturing introduces new challenges to the Aramex’s supply chain model. For instance, Aramex has well-established warehouses and other investments in logistical facilities in China.

These heavy investments were fuelled by preferences of China as a major location for manufacturing due to low labour costs. However, China has experienced sporadic wage increases due to labour disputes coupled with incidences of workers committing suicide due to inability to sustain their livelihood in the Chinese cities.

Similar incidences have also taken place in Vietnam and Bangladesh, which are two other important manufacturing outsourcing nations preferred by companies established in the western nations where labour costs are prohibitive.

Therefore, there is a possibility for a shift from outsourcing manufacturing from these nations. Hence, Aramex will run into losses due to such a shift.

In a bid to mitigate the risks associated with shifts of location for manufacturing outsourcing, it is recommendable for Aramex to stop focusing on installation of its own warehouses. Rather, it should focus on utilising and enhancing supply and logistical services to manufacturing organisation only within clients’ owned warehouses.

Alternatively, it can concentrate on developing flexible warehouses building technology to foster ease of relocation. In addressing the challenges of the need to provide real-time visibility to individual mass-customised products, Aramex should provide solutions such as deployment of low cost memory chips as an alternative to labelling products.

Reference List

Aramex Delivery Unlimited: Aramex Supply Chain Management 2014. Web.

Christopher, M 2005, Logistics and supply chain management: Creating value-adding networks, FT Press, New York.

Ketchen, G & Hult, T 2006, ‘Bridging organisation theory and supply chain management: The case of best value supply chains’, Journal of Operations Management, vol.25 no.2, pp. 573-580.

Leclerc, Y 2012, ‘sustainability and the supply chain: how to reduce cost and save the environment’, Manufacturing business technology, vol.2.no.1, pp. 67-71.

Maloni, M & Brown, E 2006, ‘corporate social responsibility in the supply chain: an application in the food industry’, Journal of Business Ethics, vol. 68 no. 1, pp. 35-52.

Ritchie, B & Brindley, C 2007, ‘Supply chain risk management and performance: A guiding framework for future development’, International Journal of Operations and Production Management, vol. 27 no.3, pp.303–322.