Competitive Strategy Business Scenario

Question: Discuss about the Competitive Strategy for Business Scenario. Answer: Business Model Innovation In the contemporary business scenario, business model innovation has been considered as one of the prime contributors for growth perspective. Through the identification of flexible strategic moves, organisations can implement essential alterations to promote sustainability in business operations. Considerably, business model innovation has been utilised by the global MNEs and SMEs to meet the shifting demand of the target demographics in a given market. Notably, many of the global business leaders have failed to generate specified business model innovation in the contemporary business environment. As a result of the consequences, many enterprises at the global platform have been unable to contain the top position in their respective industry due to lack of sustainable business model innovation (Andries and Debackere, 2013). In the e-learning scenario, the video has presented the essentiality of business model innovation. In the video, the orator, Dr Oliver Gassman has identified the mistakes made by the flourishing organisations while looking for intensification in the global platform (Gassman, 2016). Under the current circumstances, the business organisations operating at the global front must evaluate business innovation strategy to manipulate unswerving success. For instance, companies such as Philips and Nokia Corporation can be taken into consideration. Due to lack of an innovative business model, the onetime market leaders have fallen behind to the newcomers. Moreover, business model innovation has not only the technological innovation but also developing new ideas, trend and product diversification. By considering the product-life cycle, modern organisations must introduce latest products and technology to update the business model on a regular interval. According to Dr Oliver Gassman, an organisation must strictly follow the four identified phases to secure business growth at the long-run perspective (Gassman, 2016). The first identified phase has initi ated the perfect innovation ideas that can apply to the current business structure. In this way, significant alterations can be made in the business model. In the second stage, available innovation ideas must be compared to the current successful market practices to select the best possible alternative. The third phase has identified the possible scope of integrating the latest ideas. Thus, strong growth opportunities in a given market can be evaluated. The final stage has confirmed the recent ideas for successful implementation in the innovation business model (Taran, Boer and Lindgren, 2015). Such efficient market operations can influence the regular business activities of modern organisation securing market success. Through the understanding of innovation business model in the operational structure, FedEx can modify their current business model at the global platform. Being a courier services enterprise, the organisation has covered a massive business market on the global front. In the competitive business scenario, FedEx has introduced fair logistics policy to stay one step ahead of the other market competitors. Such advanced logistics facility has influenced the brand identity and services structure of the firm to the global target demographics (Bucherer, Eisert and Gassmann, 2012). On the other hand, in order to increase the customers loyalty, customer value has been increased on the business model to present a good corporate image to the target demographics. Such innovative strategies can influence the activities of the target demographics. Notably, FedEx has supported the social and environmental structure providing sustainable investment. Through the identification of latest technological development, the organisation has improvised successful installation of technology effective for logistics management. Therefore, FedEx can improve the service status on a positive note creating significant competitive advantage. Moreover, FedEx has structured efficient services at an affordable price range to improve the market share in the emerging markets such as China and India. Evidently, the organisation has influenced the productivity of the human resources providing all important services and technology-related training (Lindgren, 2012). Along with that, the latest business model innovation has opened up recent growth opportunities to the business structure of FedEx creating merger prospects for other global logistics businesses operating in the different parts of the globe. Conclusively, such instrumental innovation model has significantly contributed towards business sustainability of FedEx. CAGE Framework CAGE framework presents the relationship between two countries that is essential in trade development between the nations. It is considered as an essential theory of management study that helps in evaluating the trade relation of two different countries. The concept of CAGE framework has been developed by Professor Pankaj Ghemawat who believes that CAGE can be used as a management tool to develop international trade strategy of an organisation (Ghemawat, 2015). The study presented by Professor Pankaj Ghemawat is useful for MNCs to plan their international trade policies to have better international opportunities in different parts of the world (Ghemawat, 2015). It is important for any organisation to consider the four factors that influence trade between two countries. The concept of CAGE has been developed by using the acronym of four different words. C stands for Culture, A stands for Administration, G stands for Geography and E stands for Economy (Ghemawat, 2015). These four words present the four factors that influence the trade relationship between two countries. Hence, it is essential for any business organisation to consider all these factors while choosing a foreign market for trade. Culture is the most crucial factor that joins two countries. Furthermore, if two countries shares same geographical boundary, have almost same political scenario and economic status, the trade increase by ten to fifteen times between those countries. He gave the example of two countries that are Canada, Mexico and the USA. It can be seen that the United States of America has better trade relationship with Canada as compared to Mexico (Ghemawat and Siegel, 2011). It occurs because of the similarities between the CAGE frameworks of both the countries. In the case of Mexico, the country has a different political system and cultural practices that increases the trade barriers. Hence, it can be seen that CAGE framework plays an important role in making decisions regarding choosi ng a foreign market for trade (MiloloÃ…Â ¾a, 2015). Therefore, it is recommended to any Multinational organisation to consider the theory of CAGE framework while making decision to expand business in a new market over the global platform. Considering the example of IKEA which is a market leader in the global furniture retail industry, it can be seen that the company has its maximum business in the Euro zone. Being a Sweden based company IKEA has its maximum operations and profit from the European Union nations. The company chooses the markets keeping in mind the CAGE framework. For example, in Europe IKEA have its operations in Netherlands, the United Kingdom, France, Ireland, Germany and many other countries that have similarities in the four factors such as Culture, Administration, Geography and Economy. The European Union nations have free trade policy that increases the opportunity of growth for IKEA in the international market (Ghemawat and Siegel, 2011). IKEA can easily trade between these countries without establishing separate units of trade in every country. Furthermore, when considering the American market, it can be seen that the company has a separate unit of manufacturing and distribution for the United S tates and Canada. Hence, establishing a manufacturing and distribution in every similar market provides the company with competitive advantage over the global platform. Looking at the Asian market, IKEA has its operations centre in China, Indonesia, India, Malaysia, Singapore and other countries. But, the trade in Indonesia, Singapore and Malaysia are most effective for the company because of its similarities in trade factors. Hence, it can be seen that the similarities of the factors plays an important role in developing trade relationship between two countries (MiloloÃ…Â ¾a, 2015). Furthermore, IKEA has effectively implemented the CAGE framework while selecting markets for the expansion of business over the global platform. References Andries, P. and Debackere, K. (2013). Business Model Innovation: Propositions on the Appropriateness of Different Learning Approaches.Creativity and Innovation Management, 22(4), pp.337-358. Bucherer, E., Eisert, U. and Gassmann, O. (2012). Towards Systematic Business Model Innovation: Lessons from Product Innovation Management.Creativity and Innovation Management, 21(2), pp.183-198. Gassman, O. (2016). Business Model Innovation. [online] YouTube. Available at: https://www.youtube.com/watch?v=B4ZSGQW0UMI [Accessed Aug. 2016]. Ghemawat, P. (2015).Pankaj Ghemawat: CAGE framework to evaluate international trade opportunities. [online] YouTube. Available at: https://www.youtube.com/watch?v=7FpUJaG7uMk [Accessed Aug. 2016]. Ghemawat, P. and Siegel, J. (2011).Cases about redefining global strategy. Boston, Mass.: Harvard Business Pub. Lindgren, P. (2012). Business Model Innovation Leadership: How Do SMEs Strategically Lead Business Model Innovation?.IJBM, 7(14). MiloloÃ…Â ¾a, H. (2015). Differences between Croatia and EU Candidate Countries: the CAGE Distance Framework.Business Systems Research Journal, 6(2). Taran, Y., Boer, H. and Lindgren, P. (2015). A Business Model Innovation Typology.Decision Sciences, 46(2), pp.301-331.