Category: Strategic Management

Executive Summary

ALDI is a leading retail industry in Australia. This paper will discuss a contemporary analysis done on the ALDI. The threat of new entrances, technology, and environment are such factors that are affecting the overall strategic development of ALDI. The macro analysis shows that Aldi affected by its supplier as they are very dominant. Thus, partnership with the supplier will be a good strategy. SWOT analysis will help to identify the strengths, weaknesses, opportunities, and strengths of ALDI. ALDI has a strong strength of having good reputation in Australia’s retail industry. ALDI is also using new strategies to attract customers. However, existing rivals like Coles and Woolworth, affecting the sales of ALDI This report will also present some strategic implications that ALDI should use to make success in the Australian market.

Introduction

ALDI Company’s expansion throughout the Australia is growing as strong from the day of its first store in Australia in 2001 to its development in above 500 stores across WA, SA, NSW, VIC, ACT, and QLD. In this short period, ALDI has stands in top retailers of Australia. ALDI has also influenced the grocery prices in Australia, improved the quality and perception of the private-labeled goods through its exclusive brand’s philosophy. It introduced various market-leading edges that never offered by any other retailer in Australia. This company is facing tough competition from Woolworths, Amazon and Coles. To compete with all these competitors, ALDI opted the strategy to provide the products with high-quality at competitive prices. Moreover, ALDI also facing difficulties in meeting its sustainability targets. This report will discuss all these three strategic influences that together impact on the outcomes of Aldi.

Low Pricing

The market leadership of ALDI depends upon low pricing. To maintain the strategic management, ALDI in Australia invests in the strategies to lower the products’ prices. ALDI is focusing on selling its products at a low price due to the limited range of products and large quantities of purchasing. Rather than offering the promotional pricing and temporary markdowns, ALDI offers low pricing that brings supreme value to the customers. The policy of ALDI on pricing changes is as the first throughout the industry for passing on the lower cost to customers. It is last in increasing prices while the cost increase. The company mentions the change to its customers by displaying notes upon the cartons. ALDI serves the customers’ needs as a discount store by offering the products at low prices with decent quality. It is effective in offering the lowest prices as compared to its competitors. The fair pricing strategy of this company helps it to earn respect from the target market (roymorgan, 2017).

Competition

The main competitors of ALDI in Australia are Coles and Woolworths. They have good strategies such as higher compensation and promotions to employees as compare to ALDI. Both competitors are also offering products on lower prices as compare to ALDI. ALDI is also facing a hard competition the grocery and food in sales. It is affecting the food and grocery price at ALDI. ALDI is committed to maintaining pressure upon its competition by launching new brand campaigns which celebrate the differences as well as challenges the supermarket retailing conventions in Australia. To deal with the competition, ALDI must possess an effective competitive advantage that will result in competition advantage over the competitors. For this competitive advantage, ALDI is using cost leadership and differentiating strategies (Janis Bailey, Pyman, & Parker, 2015).

Sustainability

ALDI is committed to reducing its environmental impact. The company focus to recycle and reuse waste. Its remodeled stores having an environment-friendly building material and LED lighting is helping to optimize the water use and increase the application of renewable energy. ALDI assess the viability of its solar panels throughout the stores and distribution centers. Additionally, Aldi is using a security system for the trolleys for reducing the numbers of trolleys uncontrolled in the public areas. For example, the stores in Scoresby, Victoria because it get the six stars rating by “Green Building Council Australia” for its environmental-friendly designs. Aldi promotes the healthy eating and lifestyle for its customers. ALDI develops a brief sustainable-based packaging guide to buy suppliers and teams based on the Sustainable Packaging Guidelines of Australian Packaging agreement. ALDI also support the One Voice system for providing the mobile shower services to the homeless people living in all states of Australia (Trapp, Pulker, Scott, & Pollard, 2018).

PESTLE Analysis

Political

The multinational companies always strive for the persistent legal environment, despite the government changes, to ensure the growing business and functioning. As per the market analysis the retailing supermarket is much stable, thus, the risk to lose the business is not significant. Australian Government also take actions against of the duopolistic quality of supermarket retailers. Australian government reduced the entrance barrier for the new companies. These legal actions can help the companies for increasing the customer’s bargaining power. ALDI has taken the advantage because of the political framework of Australia and gained greater market shares in the recent years (PC, 2011).

Economic

The Australian government’s budget shows that its economy expects to grow as solidly. It will continue growing in the next years also. According to the CIA statistics in 2017, the GDP of Australia is USD 1.38 trillion (CIA, 2019). These statistics would lead toward higher growth for the household income, and leading to a strong purchasing power. The economic status of Australia also points toward the supermarket industry’s steady growth.

Social

Changes in lifestyles, social concerns, and attitudes have led to a drastic change in grocery retailing industry of Australia. Australian people are concerned for obesity and health. Thus, there is demand for the low-fat food products, easy for cooking food, GM-free and organic foods. Many of the retailers getting benefits from increase in demand as well as pushed the sails with healthy, fresh and organic food. So ALDI is focusing on these preferences of society. From 2017 to 2018 around 9.46 Million people of Australia shopped online. But ALDI supermarket is not providing the online shopping service to the customers (roymorgan, 2018).

Technological

Technology is also playing an important role in retailing field for providing a suitable shopping experience. Australian customers increasingly prefer online shopping. Moreover, the technology is helpful in improving the customers’ experience in store through providing the electronic displays and self-checkout system. Currently, ALDI in Australia is not providing online shopping system. To implement the self-checkouts can be an effective strategy which should consider to increase efficiency.

Environmental

People in Australia are aware of the impact on environment. Thus they mostly prefer to buy environment-friendly products. ALDI in Australia is aware about environmental pollution. Thus ALDI is accountable for impacts that its business has upon the environment. This company is also investing in waste management strategy and ecological products. It reduced the waste for landfills as well as using the energy-efficient products.

Legal

Australia applies the legal system that originates from the English law. Aldi is familiar to German legislation system that uses code law because it is a German company. It can be a challenge in front of ALDI. This company also needs to fulfill the Competition and Consumer Act 2010 for protecting the consumers. It must follow to opening hours as per the trading law. The legal factors such as plastic ban and carbon emission tax implemented across the retailers working in Australia. It affected the policies of ALDI in Australia.

Porter’s Five Forces

Bargaining power of the buyer

ALDI economic conditions of particular region and consumers’ buying power must analyze whenever it starts a store in Australia. It depends upon the substitute products, as well as ALDI must consider the consumers’ taste before establishing the store.

Bargaining power of supplier

ALDI requires raw material. Suppliers can use an influence upon producing industry through selling the raw material at high prices or through having monopoly. Some low pricing suppliers might not focus upon good quality (roymorgan, 2017).

The threat of new entry

Grocery stores with a low cost, such as Wal-Mart entering the Australian market can attract the ALDI’s customers as well as profits by providing the fresh goods in low pricing.

Rivalry among existing firms

In Australia, Coles and Woolworths are main competitors for ALDI. These competitors can have good strategy such as high salary to employees as compare to ALDI Company. These competitors can also merge for reducing prices as cheap.

Threat of substitute

ALDI has less threats from substitutes. But the threats from substitutes could cause major damage. As it deals through regular household products whether low prices, good quality, and fresh products are the main factors, but the customer service can be a major issue.

Internal Environment Analysis

SWOT analysis can be used for identifying the internal position of ALDI. The SWOT analysis is as follows.

Strengths

Pricing is the main strength of ALDI in Australia because it pursues the cost-leadership strategy. ALDI has a strong purchasing power and can influence grocery prices in Australia. It has a strong product mix. Another strength of ALDI is its low operating costs. The low operating cost strategy of ALDI helps it to sell products at low prices. Another strength of ALDI Company is its corporate responsibility policy as it is committed to reducing the environmental impact by reducing the wastage and recycling strategies. It is offering various products and has a good reputation among the customers (Dunford, Palmer, & Benveniste, n.d.).

Weaknesses

ALDI needs to have very high productivity to survive in the competitive market of Australia. The employees of ALDI often need to work as per the multiple shifts and get salary as less than most of other jobs. It creates dissatisfaction among the employees. Another weakness of ALDI is the customer services provide by the company. Another weakness of ALDI is that it has not provide online grocery shopping in Australia. On the other hand, its competitors are focusing on introducing online grocery shopping websites (Pulker, Trapp, Scott, & Pollard, 2019).

Opportunities

The technological advancement is a major opportunity that ALDI can use for managing the organization operations more effectively. Social media can help the ALDI management to promote its brand name much effectively. Expansion in other countries is also a major opportunity for ALDI.

Threats

The main threat that ALDI faces much competition from Woolworths and Coles. As retailers such as Amazon and Walmart also move into the grocery, ALDI is also facing a threat from these competitors. Globalization is another threat because it forced ALDI for competing with local and global competitors (Pash, 2017).

Financial Analysis

ALDI’s revenue expects to increase an annualized 12.1% in the five years to 2019, to $9.9 billion. This company has rapidly increasing the market share because of the new stores’ rollout. Consumers are also responding favorably to low prices offered by the ALDI Company. However, ALDI’s revenue growth is starting to reduce as market nears the saturation, particularly throughout the eastern states, whether the ALDI established from long time. The profitability of ALDI has risen throughout the past years because of greater sales of the grocery items as well as economy gains. The financial performance of ALDI of last ten years is shown in the appendix (Youl, 2019).

Strategic Implications

As there is a tough competition in the retailing industry, therefore ALDI must change its strategy. Change in strategies will help ALDI to increase the opportunity and strengths and reducing the weaknesses and threats. ALDI should use the following strategic implications: –

• As compare to Woolworth and Coles, some employees are consulting the customer during the shopping experience. ALDI must consider the customers’ shopping experience and service because it might result in customer satisfaction.
• ALDI will have to use a low price and high-quality strategy to attract more and more customers.
• ALDI must develop new stores and outlet designs for better customer experience.
• ALDI needs to develop more and more customers to attract more and more customers (Sandberg, 2013).

Conclusion

ALDI is facing challenges due to competition, technology, and the environment. As per the internal analysis, ALDI has more strengths instead of weaknesses. So it can retain the customers by providing the products at low prices and with effective quality. It can also use new technology and strategy to attract new customers. External analysis of ALDI shows that the technology and social factors have much impact on ALDI. As other competitors are using the online shopping strategy, ALDI is less developed in online shopping technology. New strategies and online shopping technology will help ALDI to sustain the growth and decrease price so that the customers buy products at similar prices as competitors but without compromising on brand.

References

1. Australian Government Productivity Commission. (2011). Economic Structure and Performance of the Australian Retail Industry. Retrieved from https://www.pc.gov.au/inquiries/completed/retail-industry/report/retail-industry.pdf
2. CIA. (2019). The World Factbook: Australia . Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/as.html
3. Dunford, R., Palmer, I., & Benveniste, J. (n.d.). Strategy for Successful Entry into a Concentrated and Highly Competitive Market. Retrieved from https://www.anzam.org/wp-content/uploads/pdf-manager/2374_DUNFORD_RICHARD_BSP-01.PDF
4. Janis Bailey, R. A., Pyman, A., & Parker, J. (2015). Union power in retail: Contrasting cases in Australia and New Zealand. New Zealand Journal of Employment Relations, 40(1), 1-18.
5. Pash, C. (2017, October 19). Hot competition is back in Australian supermarkets. Retrieved from businessinsider: https://www.businessinsider.com.au/hot-competition-is-back-in-australian-supermarkets-2017-10
6. Pulker, C. E., Trapp, G. S., Scott, J. A., & Pollard, C. M. (2019). The Nature and Quality of Australian Supermarkets’ Policies That Can Impact Public Health Nutrition, and Evidence of Their Practical Application: A Cross-Sectional Study. Nutrients, 11(4), 253. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6520865/
7. roymorgan. (2017). Aldi hits new high in supermarket wars. Retrieved from http://www.roymorgan.com/findings/7234-woolworths-coles-aldi-iga-supermarket-market-shares-australia-march-2017-201705171406
8. roymorgan. (2017, May 17). Aldi hits new high in supermarket wars. Retrieved from http://www.roymorgan.com/findings/7234-woolworths-coles-aldi-iga-supermarket-market-shares-australia-march-2017-201705171406
9. roymorgan. (2018). Who’s Shopping Online? Nearly 9.5 million Australians. Retrieved from http://www.roymorgan.com/findings/7612-whos-shopping-online-nearly-9point5-million-australians-201806080733
10. Sandberg, E. (2013). Understanding logistics‐based competition in retail – a business model approach. International Journal of Retail & Distribution Management, 41(3), 176-188. doi:https://doi.org/10.1108/09590551311306237
11. Trapp, G. S., Pulker, C. E., Scott, J. A., & Pollard, C. M. (2018). Global supermarkets’ corporate social responsibility commitments to public health: a content analysis. Globalization and Health, 1-20. Retrieved from https://globalizationandhealth.biomedcentral.com/track/pdf/10.1186/s12992

The fundamental forces in the general and industry environments

This is the case study that helps to find the strategic analysis and make the concern about changing the environment of the company that operates usually. A manager like to make the changes in the work and they want to see the position of the company. As a result, they make a good position in the marketplace. But there are some effects created by the critical force of strategic energy. There are some core concept is present strategic management and their business review process to develop the direction for the Emirates airline. They need to find the position of them in the market, and they also should find the competitive advantage to occupy the market place. In the final, the new business goals and a new strategy will ser for the different environment. This is the report which explains the development of the business strategy that was used by the Emirates airlines.

The background of the company is advantageous and they stated the first route to Dubai with two aircraft process one is Boeing 737 and another one is airbus 300 B4 in the year if 1985. The success story of the airline is acting as the phenomenon in all terms like growth, Innovation, and some global expansion. Emirates use the draw out process and make a significant airline function. But there is some impact present in the economic recession it affects the business fo the Emirates airline and prepares them to present at the financial crisis. It is the kind of famous for management to understand the short term and long term potential. For this crisis, they take advantage of the competitive edge. There are two analysis is made, and they are external environment and industry environment analysis (Business strategy and analysis for Emirate airline , 2017)

External Environment

For every airline industry, travel depends on the condition of the economic, pride. Elite and some other. Emirates used this intense economy process and developed its business to the United Arab Emirates. The market that they selected will operate them to the authoritative economic and find their success. The recent External environment factors are four, and they are

• Political force
• Social and culture
• Technological force
• Sustainability.

In the political force process, there is some negotiation present for the aviation system. To operate the airlines. Most of the government are needed to make strict regulation, and the different process is implemented form the Emirates airline. Dubai is marked as the best, so they started there. In the social and cultural process the influence the development strategy and follow the international market function. They indeed use this advantage to form the designation and make the trend. Technological force is act as the success driver for the airline industry they used this process is to form all the latest technology flight and do the differentiation in the standard of the airline. So, it acts as the best global airline website, best flight entertainment, best developer, and Sustainability is act as the high fuel price process and their natural resources for the small and more efficient vehicle. In this, all Emirates airline issue at first and then they solve it by using their competitive strategy.

Impact

There are some impact that faced by both the general and environmental process, and they are

Industry Environment Analysis

Portee Five force is one of the sufficient industrial competitive levels. There are five primary processes is present for this process they are

• Threats of new entrants
• Rivalry among established companies
• Bargaining power of buyers
• Bargaining power of suppliers

There is some impact faced by both the general and environmental process, and they are experiencing a hard time in the financial crisis. The slowdown in the economic growth of the organization. Act as overcapacity in the market, rising in labour cost, do the yield for the overcapacity and do the math for the falling demand. So, it is clear that the economic condition of the organization is to reduce some financial process like cost-cutting, and others sustain business function. So in the final from the analysis of external and internal environment process Emirates face the issue and solve it by their competitive strategy.

How do Emirates compete?

Internal Competitive advantages

Emirates airline is the kind of airline that operates on the unique business model with some flexibility. It used to enable innovative delivery and form the affordable market. Emirates also at as the pride leader for the Innovation in haul fights. So the past company crises are gone and the management from the tackling device to solve the global crisis. The firm model support two main model business one is haul flights and connection between points.

The pricing of the Emirates airline creates an effective one and make the passenger pay cheap fares and also enjoy the trip. This is one of the leading competitive advancement for the airline than the other. So, the list of the passenger is increased and their main cost is also increased. The Haul flights have been acting as the low cost and profitable one. The frequency of the plane has made the emirate to serve more valuable, and the other need to increase their fair. Pricing is acting as an excellent competitive strategy for the firm, and they derived success from this low cost and long-haul flight process.

This is the airline which enjoys a large number of advisor and also creates an excellent manager to form the best interest in the airlines. They used to develop high IQ manager to design and develop the best competitive products. That the other organization. Emirates airline has begun his market by using this process in the short period / The airline is not act as the burden one in any form of cost, so they form the legacy fees and form the pension for the long-term service employee. The legacy cost is acting as the reason for the many airline fall and do the change in the price. So, they form the constant process and provide it for the low fare. There is no long service for the competitive function and its cost.

From the case study, there are two main asses which make more profit. In the year 2015 and 2016, they make more profit than the last five years. There are several reasons present for this asset, and they are the development of technology. They use a specific technique for the customer to book flight and served better. The main moto is the stratification of the customer and proper communication of the employee to the customer. Many customer is cannot able to understand language, so they form some communication process for them. Also, they use a wide variety of types and operating system for the customer to take advantage. In recent days there are no accidents occurred, and there is no report registered for the Emirates airlines. This is act as the safety flights, and passenger acts as the confidence one to prefer this airline. The efficiency of the engine is also installed in every aircraft and make them ensure the trial run. They too do support for the environmental process to emit the low carbon. It makes them act as environmentally friendly.

There are three generic stages is present for the generic strategies, and they are

• Overall leadership
• Differentiation
• focus

They also carry the value chain process and do support for the intangible assets and VRIN resources. It does not act as the single activity process, and it does the value chain, and for the sustainable competitive advantage. In the tangible support, there are three processes is followed they are

• Financial
• Physical and
• Technological

In the intangibles resources here are some other process is present like

• Organizational
• Human
• Innovation and
• Reputation

In the final Emirate had the interlocking system for the mutual and reinforced function. They used to create the ultimate experience for the people and do the privilege for them compare to others. They also make some promise for the Middle East countries to do their Innovation.

The challenges Emirates might face

The airline industry is act as one of the important ones for many countries they used to make more profit for the country. Like the same Emirate, the airline is acting as the important one for the UAE they make many promises, and they face many problems to keep that promise Some of the critical challenges are the best service for the client. For this process, they make the new marketing strategy like pay the basic price for the designation. They make some effort for the organization to capitalized the impunities and make them as the global carrier. They also form some feedback and receive company feedback from all the clients. The company is used to launch the worldwide campaign and also refer the kids to Kids go Free. The discount is also given for the families to this go free process in any of the emergency. Based on the survey there they form the report as Emirates airline has increased the number of to the general to global. After the worldwide formation, they used to serve a wide variety of clines all over the world. It acts as one of the immediate processes and makes the address for this method. There are some complex is present for the function, and they do solve all from the SWOT analysis process

The effectiveness of Emirates’ leadership

`Emirates is one of the largest airlines, and it plays a major role in country health. There is no doubt that a talented leader plays a functional position and makes all possible things under the management. Leader of this organization is always acting as the responsible one and do treat the people equally. They still work as the honest one and make the connection between the staff and them.

Like the other organization, emirates airline play a management theory to motivate and control the people. They use a different style of the management process and manage the business. They deal with planning and other pieces of stuff to increase the performance of the company. In today nosiness the motivation and leadership skill plays a significant role Sheikh Mohammed bin Rashid al Maktoum and then Sir Tim Clark, They do the activation theory to solve all the problem on time, they monitor the process, control the system and do have the essential to control all the management process. These three acts as the motivation leader and do support for all the struggle that happens. It makes the employee work well and does give their best contribution. Strategic management and their significance of the Emirate airline increase the stakeholder and their customer, the management process is carried by the theories of the management and reach the success.

Bibliography

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Basically, with the current trends in the market and the growing levels of competition, organizations are expected to become more innovative and ensure the use of better ways of operating in the market so as to have a higher competitive advantage over their competitors. In this case therefore, Aldi, which is a discount supermarket retailer has realized that one way of doing this is through the limitation of the number of products in each and every given category so as to ensure that there is a guaranteed product turn, and also ensuring ease of the stocking shelves, which would therefore make the organization more financially powerful than their suppliers (Udriyah, Tham, & Azam, 2019). Aldi organization also prioritizes on dealing with private-labelled products as a way of minimizing related costs. It also has a number of ways aimed at reducing their expenses, to help them in outweighing their reduced product prices, and among them are advising their customers to come with their bags for their groceries, to reduce the cost of packaging for the customers.

Every strategy that is basically utilized by an organization in the market, and especially aimed at improving their competitive advantage over their opponents in the market has possible pitfalls, and that the organization should be ready to outweigh by possible planning for the same and putting in place some measures which would help them in dealing with such issues in case they happen in the business, so as to avoid complications in their market operations. In this case therefore, the Aldi utilized strategies could also have some pitfalls and which is normal (Nadarajah, Kadir, & Khalid, 2019). To begin with, their market strategies may not work for a long time unless they are updated and some changes made over times so as to keep them relevant with the changing market situations. Also, the customers may not buy the idea of coming to the grocery with their bags, and would probably select to buy their products from other places where the bags are provided. Lastly, in most cases, customers prefer shopping under one roof, and therefore may not shop from Aldi since the organization offers limited and private-label products with an aim of minimizing cost.

Lease can be one of your greatest operational expenses. Be that as it may, numerous business people make a less than impressive display of arranging their business land rent and end up stayed with major tremendous costs. In case you’re not cautious, that could have genuine repercussions for your organization’s benefit. When you hear the word “negotiate”, your rent is probably not the first thing that comes to mind. In fact, your initial thought is probably that of a business deal or bargaining prices at a farmers’ market. While most people don’t realize, it’s possible to negotiate your rent price. Your landlord operates as a business, after all, and they’re going to want to find a balance of happiness for their client and themselves. Here’s what you need to know to negotiate your rent the right way (Weill, & Woerner, 2018). The Apple company has greatly revealed its enormous gravitational pull when it comes to the issue of bargaining for spaces to rent in different malls, something which has greatly distorted the entire market for mall rents and which also has helped the Apple company in winning the iPhone maker great deals (Katsouros, & Stephen, 2017). Apple attracts such a large number of customers that its stores can without any assistance lift deals by 10 percent at the shopping centers in which they work, as per Green Road Consultants, a land inquire about the firm. Truth be told, Apple has utilized its bartering capacity to pay close to 2 percent of its deals a square foot in lease. That contrasts well and a run of the mill inhabitant, which pays as much as 15 percent, as indicated by industry administrators.

Basically, in the current, technology and its related advancements have been of great importance and especially in the field of business. In this case therefore, technology has been greatly utilized in improving such services like communication within different organizations and ensuring that all relevant information is made available for the employees and other stakeholders when necessary. It has therefore impacted greatly in the business industry through making it possible for different operations to be carried out with a lot of ease (Kane, 2017). There have been enhanced methodologies in creating information the executive’s innovation as an answer for advance information dispersal, information creation, and information partaking in an association or network. These methodologies have qualities and shortcomings of their own concerning innovative advances, client’s gathering, flexibility, and achievement rate in the genuine feeling of producing information. With consistent advances in portable and PC innovation, mechanical development between associations is serious. Be that as it may, an association can’t flourish if its representatives don’t share information and work together with each other.

Numerous affiliations are benefiting as much as possible from the odds to utilize new advances to end up being progressively convincing and successful. One of the more present sorts of approaches to manage to be used is the ‘virtual gathering.’ These are bunches that are incorporated into people who don’t work at a comparative spot or even all the while. They may be spread across many time zones and maybe found wherever all through the world. These sorts of gatherings are made possible by impels in PC mediated correspondence and programming that grants people to work helpfully on adventures without being helped to establish or regardless, working all the while (Newman, Section, & Marshall, 2019). Obviously, regulating gatherings of this sort presents many, and now and again exceptional, challenges. Keeping any gathering coordinating and passing on satisfactorily is continually a test, yet with virtual gatherings, these issues are indisputably to a more noteworthy degree a concern. We realize that it is vital and significant for individuals in associations to stay in contact all the time and in many associations today that is turning out to be progressively troublesome even with improved correspondence innovations.

Any organization that generally starts a business is always aimed at making profits. This therefore means that the organization must have a way of setting products prices and values that basically will favor their clients, make profits out of that and still have a higher competitive advantage over their competitors in the market. These values are therefore utilized by professionals to analyze a business competitive advantage in consideration of the market situation (Morioka, Bolis, & Carvalho, 2017). Official Outline Tried and true way of thinking in esteem chain procedure expects a one-directional progression of essential exercises, beginning from inbound coordination to activities, outbound coordination, advertising, and deals, lastly to support. Clients on a normal return about 6% of all that they purchase. Organizations need to see this as a chance to give this arrival heap another rent of life. However numerous organizations are not used to believing that the things they oust, for example, items, waste, and assets really have esteem. Truth be told, barely any retailers and providers catch the abundance of data that is bolted inside a case that has been come back to the distribution center. Firms that don’t perceive the significance of a compelling converse coordination technique as a major aspect of their worth chain hazard harming client relations and may genuinely risk their image picture and notoriety (Mahdi, Nassar, and Almsafir, 2019). A decent opposite coordination program can be a differentiator and gives a method for picking up showcase advantage. In our viewpoint, a reclassified esteem chain must be a bit of the general business manner for makers or shops who manage item returns.

References

1. Kane, (2017). The evolutionary implications of social media for organizational knowledge management. Information and organization, 27(1), 37-46.
2. Katsouros, & Stephen, (2017). Come to believe: How the Jesuits are reinventing education (again). Orbis Books.
3. Mahdi, Nassar, & Almsafir, (2019). Knowledge management processes and sustainable competitive advantage: An empirical examination in private universities. Journal of Business Research, 94, 320-334.
4. Morioka, Bolis, & Carvalho, (2017). Transforming sustainability challenges into competitive advantage: Multiple case studies kaleidoscope converging into sustainable business models. Journal of Cleaner Production, 167, 723-738.
5. Nadarajah, Kadir, & Khalid, (2019). Understanding How IT Capability Impacts Sustainable Competitive Advantage through Business Process Management. Business Management and Strategy, 10(2), 250-264.
6. Newman, Ford, & Marshall, (2019). Virtual Team Leader Communication: Employee Perception and Organizational Reality. International Journal of Business Communication, 2329488419829895.
7. Udriyah, Tham, & Azam, (2019). The effects of market orientation and innovation on competitive advantage and business performance of textile SMEs. Management Science Letters, 9(9), 1419-1428.
8. Weill, & Woerner, (2018). What’s Your Digital Business Model? Six Questions to Help You Build the Next-generation Enterprise. Harvard Business Press.

In the year 1981 Simmonds reflected his view on the adoption of strategic management accounting (SMA). There were other writers such as Bromwich (1990) who continued in this culminating in an influential paper. There was a positive response by David Smith and journal referees however according to the different survey which was carried out in the 1990s indicated that in practice SMA was slow. There was a mixed comment on overall adoption saying, if was academic immigration (Lord, 1996) or the account possess enough skills to make SMA a success (Cooper, 1996a, b).

There was no proper definition for SMA, different writer has a different perspective. As per (Roslender and Hart, 2003) it is a tool to make management accounting more strategic. Simmonds defined it as “the provision of management accounting data about a business and competitors and have managing and controlling business strategy”. In SMA various techniques are been included and commentators defined SMA based on the techniques. The techniques such as activity-based management, life cycle costing and strategic performance measurement systems, activity bases costing etc. There are some commentators who oppose this because as per them activity-based costing is a part of SMA as the focus of ABC is on the accuracy of cost allocation, not strategic support.

The boom in activity-based costing (ABC) and activity-based management (ABM) which was observed by Shank as the pillar of the new idea. Whereby Cooper and Kaplan were the academic writers who encouraged these techniques, which gives an insight into ABC by providing a way for accounting to be relevant strategically. ABC was been seen as more of a solution provider to the problems of irrelevancy by academics and professionals.

The overall paper portrays SMA was as much successful as it should be. In the year 1980s there was tremendous enthusiasm from the professional and academic accounting communities as SMA has greater promises. Overall observation on SMA is the lacks in evidence that it was practice widely as forecasted by Simmons. As the SMA was not widely accepted which made it difficult to determine the success or otherwise of SMA implementations furthermore there was there were many researchers and put to practice which made SMA hard to recognize.

The evidence on the adoption of SMA technique was not strong enough and key evidence was inclined towards the activity based costing (ABC) which was very low and decreased overtime, there were many companies who did not supported implementing ABC in practice. This result was been collected by several surveys of practice (example, Innes et al., 2000).

Target costing, functional analysis and value engineering are the management techniques used by Japanese companies which was success. However there is not clear sign of evidence about the adoption of Japanese-style SMA techniques which it comes western companies and outside the Japan. The reason being SMA was not adopted much as there was an accounting lag and evidence showcase that techniques and tools which was used without the involvement of accounting function.

Introduction

Ecosystem, a term highly used in biology for describing the various relationships among all the living and non-living elements in the environment, is widely used in the business world in somewhat similar context. This era of digitization has made a huge impact in every aspect of life including the understanding of the business and economic environment. The dynamic nature of the industries or enterprises (Teece, 2007), which has become increasingly developed, largely influences the study of ecosystems. It helps to explain the reason why continuous research is required to understand the key changes that influences the roles of the involved elements or agents. The roles of these agents and their respective relationships have been evolving and it is important to study the changes in the pattern in order to strategically manage them. The paper intends to explain the current theories and the relationships of the different elements.

Keeping the research question in focus, this paper begins with defining ecosystems through the aid of previous research and explaining the key impactful elements which have caused different approaches in defining it. Next, it explains the major characteristics of ecosystems and the strategic management of ecosystems in the current business environment. Finally, the findings have been summarised and some suggestions for future research are mentioned which are not fully explored in this paper.

Definition of Ecosystem

Several approaches have taken place to define ecosystems with one or more similar elements. One aspect of this research considers relations of various elements in a business industry such as suppliers, customers, buyers, government institutions etc. to explain their mutual relationships of supporting each other towards a common goal and also talks about the necessary leadership conditions in a dynamic environment (Moore, 1998; Teece, 2007). Another approach talks about the technological advancement in the Industry and the role of ecosystems affecting necessary strategic changes due to the efforts of external innovators (Adner & Kapoor, 2010). Ecosystem is seen as a platform in one of the study which talks about the interdependence of all the major platform financers and their relations with all the supporters (Ceccagnoli, Forman, Huang, & Wu, 2012). While another study focuses on the relationship of various elements due to the uncertainty, complexity and ambiguity in the ecosystem (Stefano, 2013).

While all these concepts talk about one or more important element that comprises the core of a business ecosystem. They are limited to not been able to completely capture the major players which could help explain the dynamics of ecosystem. After deep analysis, a somewhat appropriate definition which talks about the nature of ecosystems, the different elements in accordance to the changing dynamics and the contributing factors which specifies a unique complementary aspect was found. The authors say, “An ecosystem is a set of actors with varying degrees of multilateral, nongeneric complementarities that are not fully hierarchically controlled”(Jacobides, Cennamo, & Gawer, 2018, p. 2264). This approach sees the ecosystems not as a result of some generally specific or similar elements but talks about some specific, uncommon and unique factors that influences the mutual relationships which results in mutual benefits. It also talks about the role of hierarchies and how the change could be affected by the newest of entrants and have somewhat limited influence on the overall dynamics of the Industry.

Characteristics of Ecosystem

Based on the chosen definition, one crucial aspect of business ecosystem is the unique factor which is responsible for distinguishing it from other agents in the entire industry. This allows the firms to become an important part of the group which provides mutual benefits. Such benefits are relatively unique and would not necessarily be available for the firms operating independently in the industry.

Another important feature of business ecosystem is the network dynamics among various agents or participants. There are big and small players in the industry based on size, uniqueness of resources etc. which are interconnected for the accessibility of common advantages. Such a relation may cause some informal authority of strong and influential players on the overall setup but there is no formal authority which could dictate all the terms, Such decisions are taken by joint agreements and the structure have given rise to the concept of meta-organisation (Gulati, Puranam, & Tushman, 2012). All the entities in an ecosystem are autonomous and their interconnectedness determines the overall rewards to be shared by all the beneficiaries. Hence, this characteristic again summarises the key aspects of the chosen definition as the network would involve agents with unique capabilities. Also, the firms are not fully hierarchically controlled since the entities are legal autonomous bodies while there could be some informal authoritative relationships based on powerful influence.

The level of control present in the ecosystem is a characteristic which also helps in explaining the need for firms to become a part of an ecosystem. In the context of business ecosystem, it’s not about firms having authority over other firms but it is related to the overall management and continuous control over the entire industry for their survival. The control over the most unique resources and the cooperation among the participants allows the existing members to exercise a certain level of control when it comes to entry barriers, use of resources and competition (Smith, 2013). Such important relationships may also give rise to co-dependence and the inter-connectedness could result in control over price apart from the entry barriers thus minimising risk for the current firms in the industry (Smith, 2013). An ecosystem thus allows firms to maintain a certain position for a long period of time and reap benefits due to the protective cover of control over key resources.

While control is there in a business environment, it might suggest that the innovation is somewhat restrictive in an environment which looks to keep things stable. Innovations, however, are an important characteristic of a business ecosystem as they allow the firms to keep focus on the requirements of the industry. Based on the current trends and need, the entities may concentrate their efforts towards working for the kind of innovation which caters to the demand of all the member organisations. They may also decide not to indulge in research and innovation activities due to high investments or huge risks of disrupting the entire ecosystem. All the new research and advances could be aligned with the objectives of the industry to better serve the needs without disrupting the current flow of the existing process. Keeping in mind the requirements of the ecosystem, new entrants could also align their disruptive innovation and save themselves from the dilemma of whether they will be able to gain the support of the respective incumbents in the industry (Ansari, Garud, & Kumaraswamy, 2016). By keeping the objectives and the requirements aligned, the firms ensure protection from the disruptors as the ecosystem participants keep an eye on them by predicting the nature and long-term sustainability of the industry.

Ecosystems provide a platform for the firms engaging in similar business. The complementor firms can participate and reap the benefits through their uniqueness and superior performance for a long period of time (Kapoor & Agarwal, 2017). This platform allows firms to develop their product and use their unique advantage. Ecosystems provide an opportunity to develop the network and sustain the long-term position by keeping a stable market for the product. It enables the firms to easily access the pool of network for the required resources and allows firms to predict the future path.

The presence of easily available data and sharing of knowledge is highly sought after in an ecosystem. Using Open Data based Systems, an ecosystem allows various firms to access the required knowledge regarding product, services, customers, emerging technologies etc. to better equip themselves with all the industrial challenges (Immonen, Palviainen, & Ovaska, 2014). The ecosystems ensure the reliability and quality of data and requires all the participants to actively create the appropriate processes for better clarity.

While defining the ecosystems, it was noted that ecosystems consist of several elements which are somehow interconnected, interlinked and sometimes interdependent. In the same manner, all the characteristics of ecosystem influences each other. Network dynamics helps in creating strong networks which results in getting a platform of knowledge and data sharing. Through reliable data, firms may predict the market forces and the need for innovations.

Strategic Management of Ecosystem

It is important to understand the strategic management of ecosystems as there had been constant changes due to the emergence of digitization. For instance, the definition of ecosystems has constantly evolved with many authors trying to cover all the major aspects of it. Based on new research and findings, they have updated their understanding and have tried to explain it for the current industry.

Appropriate strategy is required to deal with the dynamic nature of ecosystems where competitiveness may overcome the rewards of cooperation. Firms are organised in a way to look for the most sustainable option for their business. However, due to the complementary activities in a business ecosystem, it is hard to make a decisions relating to technology investments (Kapoor & Lee, 2013). It is important for a firm to grow individually and they are autonomous bodies, but the benefits of ecosystem put them in a dilemma of whether to be the early entrant or investor of a certain technology (Kapoor & Lee, 2013). The need to strategically manage these changes both for the individual firms and the industry therefore becomes very significant.

To deal with such disruptions, a firm should display the required strategic behaviour. One alternative which has the potential and is significantly prevalent in an ecosystem are emergent strategies (Mirabeau & Maguire, 2014). They usually are generated after the commencement of a project but a certain strategy to deal with the uncertainties of the industry helps in the long-term strategic planning of a company.

In order to make a sound strategy for a company to cope with the requirements of an ecosystem, it is very important to initially determine the nature of the industry itself. If an industry is somewhat like the case of Boeing and Airbus where most of the market is influenced by two companies, then the business environment would be more stable. Such an industry which involves huge investments, would see major disruptive innovation in a decade and the firms operating in this ecosystem can sustain their competitive advantage for a long period of time. This allows the influential firms in this ecosystem to exercise control and their strategy would involve keeping their position stable. The dominant firms can influence the prices and keep them in check to avoid competition and reap the benefits as other subsidiary firms also revolves around them. On the other hand, an industry with huge number of competitors and low investments would require a different kind of strategy to maintain their position. Based on the demand from consumers and the supply of resources, they need a strategy to maintain their sustainable competitive advantage (Adner & Zemsky, 2006). They need to keep their competitive advantage as long as possible and an ecosystem helps to ensure the balance in the supply of resources. Hence, the strategic management of an ecosystem would involve a detailed analysis of an industry and the various dynamic elements.

Each firm creates their own business model which would involve the best use of resources for value creation purposes. In co-evolving ecosystems, the ideas of value co-creation and co-capture emerges as important elements which should be integrated in the business models of the individual firms (Iivari, Ahokangas, Komi, Tihinen, & Valtanen, 2016). These elements influence the design of an individual firm´s business model to effectively create value for all the members of an ecosystem. This co-ordination also helps to explain the emergence of cooperative strategies. These strategies are made by different firms in an ecosystem for the purpose of mutual gain and improves value-added efficiency of the firms in various circumstances and environment (Nielsen, 1988). Hence, all participants in an ecosystem should indulge in the creation of sound cooperating strategies for the accomplishment of group objectives apart from individual gains.

An ecosystem has its advantages, but it is difficult to align the competing firms to work for the benefit of the entire industry as any rational firm would want to think about their own profits rather than the industrial gain or benefits of all the firms. This, however, could be overcome by the heterogeneity or uniqueness of firms. On a subcommittee level, Firms with broader array of complementary products tends to show less support in comparison to firms with unique selling attributes (Ranganathan, Ghosh, & Rosenkopf, 2018). In order to create the technology standards and cope with the deficiencies, the firms tend to collaborate to improve the networks leading to a greater acceptance of the emerging trends (Ranganathan et al., 2018). Hence, the firms indulge in strategies to support the long-term position and collaborate with other firms to overcome the technical difficulties.

Based on all the findings, a firm needs to have their individual business strategies to deal with their internal processes and an external strategy to deal with the volatility of the business ecosystem.

Conclusion

It can be concluded from the literature review that the ecosystems have evolved and there have been visible changes. For companies to survive and benefit from these changes, it is important to strategically manage them. This change could first be observed by the analysis of the meaning and definitions of ecosystem and how various authors are still doing a lot of research to better explain the changes by revisiting the previous literatures. The characteristics, in accordance, includes a lot more than what existed 20-30 years ago and still many factors are yet to be considered for a better understanding of the subject. For instance, the features may differ based on different industries and a separate study which involves several different types of industry could help to explain the common and the distinguished ones. For this literature, the characteristics of uniqueness, network dynamics, control, innovation, platform and data, and their inter-relationships are explained in detail.

The strategic management of ecosystem summarises the ways in which industries can cope with the rapid changes in the ecosystems and how the nature of the industry influences decision making. They need to maintain their competitive advantage for a long term stable and sustainable position. The study of business ecosystems is essential for new entrants as well to create a better impact and easily find their foot in the industry.

The study explains the relations between various elements of an ecosystem and how firms cope with different changes through their strategies. For future research, the limitations of business ecosystem could be better explained with case-based theories pertaining to a specific industry

Strategy and Strategic Management

Strategy and planning are used interchangeably by many authors. The main difference between a strategy when compared to planning is that it takes specific measures and policies to develop robust resources that can lead to sustained development and such a development is in line with the changes in the macroenvironment and the stakeholder’s demands and changes in expectations (Finlay, 2000; Hill and Jones, 2012). As far as the retail industry is concerned, one common feature shared by companies in the last many years is the pressure on a strategy to reduce prices, which to a considerable extent is driven by competition. A major strategy is to kill this competition through acquisition. The acquisition is one of the major growth strategies (Smit, 2001), and the parent company, the Aditya Birla Group also pursues this strategy, and this is how Vodafone and Idea have become part of the group.

One of the main advantages of this growth strategy is that it can acquire the resources and market and there could be only some issues that may be needed to be managed (Smit, 2001). However, the majority of acquisitions fail and reduce the market value of companies. This is particularly the case of companies that try acquisition as a diversification strategy to reduce risk (Schraeder and Self, 2003). A company that has successfully pursued acquisition as a growth strategy is Procter and Gamble (Marketing Week, 2007; Weston, 2001).

Strategy and Structure

While pursuing a strategy, an internal environment of a company must support the development of key resources in a timely manner if the planned strategy is adopted. If the emerging strategy is adopted, then it must have a structure that acts as an instrument or glue offering cohesion between the different elements of that company (Farjoun, 2002; Mintzberg et al., 2009) in a manner that allows quick responses to the changes in the macro-environment. Planned strategy to a considerable extent is possible with Company as it is in retailing and the amount of differentiating that can be achieved is relatively low. Nonetheless, product line differentiation is something that Company can follow (Avenel and Caprice, 2006). It is not just the planned and emergent strategies (Mintzberg et al., 2009) that companies follow but also some companies tend to pay great attention to innovation by keeping consumers at the heart of their product development process. Thus, they keep on delivering innovative products and one such company is Amazon which introduced Kindle Publishing, Prime, etc.

The relevance of strategic management models becomes explicit at various stages of strategy development. In internal environment analysis, SWOT analysis is useful because for Company, even though it has strengths such as having the presence of great brands, it may need to assess its strengths and weaknesses (none as such) against opportunities and threats. Then only resource development can fulfill its purpose. Besides this, in resource development, the nature of competitive forces must be considered (Porter, 2004). Newmarket growth strategies can be a major area of attention of a Company with its growth and Segmentation, Targeting, and Positioning along with the possibilities of Export, Joint venture, or greenfield investment can be assessed. Further, the Ansoff matrix can be applied for determining the growth strategy (Johnson et al., 2017).