Competitive Strategy for Framework and Empirical Illustration

Question: Discuss about theCompetitive Strategy for Framework and Empirical Illustration. Answer: While the organizational goal of any company is to boost its sales growth and ensure sustenance, very few companies succeed to accomplish the same, in absence of an effective strategy. Woolworths Limited, one of the most recognized retail store brand of Australia has recently adopted a round numbers pricing strategy so as to stay ahead of competition. Since the company has been encountering cut-throat competition from rival brands like Aldi and Coles, the company employed an effective strategy to stay in the competition and outrival the other brands. Woolworths has always been a top retail company and hence its case has been chosen to show how the company takes strategic advantage by its newly introduced pricing policy. A grocery giant, Woolworths has been trying its best to retain its existent consumers while attracting potential customer base. However, it has been encountering challenges to stay in the competition owing to recognized brands like Coles and Aldi which not only offer goods via virtual stores but also offer them at competitive prices (Kryscynski 2017). The goal of Woolworths has not been merely to attract consumers through low price point strategy, as it will bring down its annual revenue. The companys goal has been to maximize its revenue, without compromising with the price to a huge extent. As a result, the company has introduced the round numbers pricing strategy whereby it has decided to shift the prices of more than 20,000 products to round figures, without charging any additional cent for the same (Santos et al. 2014). The actual trick behind the strategy is to attract more customers, by promising them goods at lower prices, when actually the consumers will pay similar prices f or the goods. The importance of business strategy lies in the fact that it helps a company achieve its business goal by adopting an organized approach. The present goal of Woolworths has been to stay relevant in the grocery retail market without losing on its profitability. Hence, the company has to adopt an innovative approach. The management authority of the company has been well aware of the fact that the company has been encountering huge competition from its competitors which have been charging cheap rates for its products. However, since the profitability of the company may get affected if it charges cheaper than present, the company employed a strategy that can psychologically influence the consumers to buy their products. As and when the consumers will see the products or goods marked as $40, $50 or $60, they will inclined to feel that they are paying much lesser than they would have to pay, while buying the product from a competitor brand. However, the most important part o f this strategy is that in this way, Woolworths will be able to charge more than the actual price of the good. For example, the grocery item that was actually priced at $5.99 will now be priced at $6 (Methner et al. 2015). While the consumers will believe that they are able to make huge profit through this, the reality is the company will be able to enjoy larger customer base without compromising with profitability. The importance of innovative business model in business can never be overstated, and there is no gain stating the fact that Netflix is one of the most innovative companies that has ever emerged in the last few decades. The company has been chosen as it completely revolutionized the system of entertainment by becoming the first company to offer video-on-demand streaming service. Founded in the year of 1997, Netflix Netflix was the first company to offer a streaming-only option for about half the price of a subscription for DVDs by mail and yet offer a wide variety of video content. This low price, huge variety strategy helped the company achieve competitive edge over the rival companies. As far as an innovative business model is concerned, a company cannot disrupt the existent technology by merely investing a huge amount of money overnight. Accordingly, Netflix also adopted a highly organized step in selecting and understanding the needs of its consumer base, while remaining aware of its own position. Earlier as a video renting company, Netflix could not easily outrival recognized companies like Blockbuster, and hence its business model was based on the idea of serving casual movie buffs, who were not looking out for newly released movies, like the subscribers of Blockbuster. However, Netflix knew well that it has to continually update its technology and re-frame its business model if it wishes to sustain in business. Accordingly, it did not remain content with limited customer base, but rather with the rise of video streaming, it was able to move up market (HSGUniStGallen 2017). The company revised and re-invented its business model by offering a wide selection of v ideo content at extremely low price, that easily appealed to the existent consumers of Blockbuster. The business model of Netflix is currently based on the idea of offering a huge variety of video content to its subscribers at extremely affordable rates. Innovation must be accompanied by unique ideas that cannot be easily emulated by the rival firms. Accordingly, Netflix does not only offer shows at low prices, but also provides its viewers a variety of unique shows and movies which get aired only by Netflix, and not on any television channel or theatre. This is how the company kept on innovating its business model to capture the attention of its audience. Consequently, majority of the subscribers of Netflix has been found to view more of the television shows and movies via streaming (Gomez et al. 2016). However, it is also important to note that the business model of the company is largely based on the way employees are motivated for the successful implementation of the model. In c ase of Netflix, the company managers keep on communicating the organizational goals of the company to the employees, so that the employees stay connected to the immediate business model as the larger organizational mission of the company. Reference List: AO Dos Santos, M., Svensson, G. and Padin, C., 2014. Implementation, monitoring and evaluation of sustainable business practices: framework and empirical illustration.Corporate Governance,14(4), pp.515-530. Gomez-Uribe, C.A. and Hunt, N., 2016. The netflix recommender system: Algorithms, business value, and innovation.ACM Transactions on Management Information Systems (TMIS),6(4), p.13. HSGUniStGallen 2017.Business Model Innovation. [image] Available at: https://www.youtube.com/watch?v=B4ZSGQW0UMI [Accessed 22 Aug. 2017]. Kryscynski, D. 2017.What is Strategy?. [image] Available at: https://www.youtube.com/watch?v=TD7WSLeQtVw [Accessed 22 Aug. 2017]. Methner, N., Hamann, R. and Nilsson, W., 2015. The Evolution of a Sustainability Leader: The Development of Strategic and Boundary Spanning Organizational Innovation Capabilities in Woolworths. InThe Business of Social and Environmental Innovation(pp. 87-104). Springer International Publishing.