The Key Strategic Issues That ABB Company Is Facing - Coursework Example

Introduction Many companies have been coming up while others are closing down or being declared bankrupt across the globe. The successes and downfalls are attributed to the different managing strategies that global organizations have adapted into. On these bases, the current paper handles a case study of Asean Brown Boveri (ABB) organization which strengthened itself by merging Asea with Brown Boveri (De Wit and Meyer 2010). Managing strategies are considered as a two way process. Thus, it is determined by who and how the strategies are applied and to who they are applied to. Identify the key strategic issues that the company is facing In today’s world, global organizations and companies are changing day after day due to the ever increasing world changes across all sectors. This has led to the emergence of different strategies of doing business by different companies (Haberberg and Rieple 2008). Based on researches carried out on various case studies including ABB, key strategic issues ought to be addressed in order for companies to overcome the difficulties and problems they face. According to De Wit and Meyer (2010), the concept of mergers and acquisitions (M& A’s) has been seen as the way out to globalization of economies. Globalization of economies is identified as a key strategic issue faced by ABB given that Companies are competing more and more in relation to costs of raw materials, operational costs, cost of labor and technological advancements. Concern on competitive advantage by ABB like other companies is used for testing better and effective strategies to counter increased competition in the market. Although it has led to improved and better performance in ABB, other companies have been faced by difficulties resulting to financial crisis hence closures. High rates of competition have presented companies to external as well as internal economic forces. Moreover, clients have experienced low quality service and product delivery due to the use of poor management strategies. Financial crisis resulting from competitive advantage on other hand has catapulted competition forces between market segments. All together management strategies and associates impacts general economic growth and development to national economies (Haberberg and Rieple 2008). The aspect of inside out strategy has enables companies like ABB to create the organizations newly through mergers or acquisitions. Also, capability building through strategic managements provides appropriate market opportunities to companies. Therefore, economic sustainable growth and development becomes an issue in relation to management strategies. Using the briefings that you have prepared for the tutorials apply the key points from your briefings to the case study ABB case study presents globalization as argued by Haberberg and Rieple (2008), referring it as whereby global economies, societies and cultures practice economic integration id different perspectives. Companies have embarked on forming global networks in the name of attaining development goals in major sectors of transport, trade and communications. Based on the ABB case, internationalization is identified as a significant factor in the development, management and growth of business (De Wit and Meyer 2010). Globalization faces criticisms from the negative perspective of its resultant activities. it is argued that the concept has led to increased disparity between the rich economies and the developing poor nations. According to the researches carried out, this has contributed to increased global competition between companies. The field of electrical and management within relevant organizations such as ABB are not left out in the consideration of planning strategy towards standardization. Thus, poor and developing economies continue to experience difficulties in the expense of the developed ones in the name of globalization. Economic disparities, financial crisis, conflicts, and pressures and forces on boundary integration between economies are experienced as a result of international markets practiced by multinationals. Therefore, in order to solve the situation, effective strategic leadership and management are highly required for the complexity brought about by competitive environments between global companies. Perhaps the most significant aspect in ensuring managing strategies are put in place and working rightly is having relevant tools and personnel in all companies. In the process of developing, achieving and maintaining high strategic competitiveness in the 21st century, ABB has recognized strategic leadership as the sole contributor to the realization of this concept (De Wit and Meyer 2010). Discuss how the theory identified in your briefings relates to the issues in the case study and critically assess how useful the application of the theory is for developing future strategy Theories of modernization and homogenization as witnessed by many global companies should be well applied in strategizing for the future. Although they have been regarded as difficult in developing and understanding, a lot efforts and emphases should be considered. Over the past few decades the concept of homogeneity in global products has tremendously increased. This is attributed to the growing demands by people on their needs and wants. This concept is important in the realization of customer’s needs and the strategies of attaining the identified needs within certain markets (De Wit and Meyer 2010). Modernization on its part has presented global market segmentation with different patterns. However, it is through this where companies like ABB ought to identify and target specific market segment. Diversification of needs has led to creation of market segments according to the interests, likes and customer’s preferences (De Wit and Meyer 2010). Therefore, for companies to attain sustainability in the competitive global market environment customer verses products or service analysis is mandatory. Based on leadership theory it is argued that modern technological changes, Competitive advantage, consumer demand and global labor market have led to the development of more strategies for these changes. Strategic management change through the management level need to focus on the company’s future operations and performance. This is by understanding the need for change, working on the idea, enhancing motivation and increased interest on the matter to all parties involved and stakeholders (Haberberg and Rieple 2008). Conclusion Economic globalization of the world is no longer a myth but a reality in today’s world. As the global world integrates economically, companies and organizations compete more and more on global needs. All in all, companies should embrace on practicing strategic management, planning and good leadership as a way to achieve their set goals and objectives. It is changes which occur in the course of company’s growth and development which gives it the opportunities to fly high or down. Furthermore, companies should capitalize on organizational design as the source and way forward to competitive advantage. Bibliography De Wit, B. and Meyer, R. 2010. Strategy: Process, Content, Context. An International Perspective. Routledge, London. Haberberg, D. and Rieple, J. 2008. Strategic management: Theory and cases. Oxford university press, London. Appendix I 1st Reading: Strategy from the inside out: building capability-creating organizations What are the key parts the writer is putting forward? As per the writers ideas towards industry players, the main parts of this article handles the issue of strategy for building capabilities and creating organizations , terms of analysis, imperatives of inside-out strategy and organization’s case studies on the same. The key parts entail the strategy formation, development and usage by organizations through the personnel s like managers (De Wit and Meyer 2010). It also analysis the implications posed to these personalities in any case. Moreover, balance variation and selection towards developing and embedding capabilities is considered important by the writer. What aspect of strategic management is the article discussing? The aspect of strategic management to any organization in the global world is of great importance at any given time. Therefore, as organizations are formed, grow and develop from one stage to another, there are certain factors and considerations to be analyzed. In this article the aspect of competitive advantage has come clearly the best towards building capability and creating organizations through the strategy from inside out. Due to the increase in demand for global products and services, competition has been experienced by different players whereby all have focused on meeting customer needs and wants in the various market segments. Can you identify some criticisms of this paper and its approach? Competitive advantage has been used and tested by different organizations. While it has led to better and improved performance in some firms, others have been faced by difficulties leading to their closures. Increased competition to some extend has been criticized to the presence of low quality service and product delivery. In addition, financial crisis as a result of competitive advantage has led to competition forces within market segments hence affecting economic growth and development within national economies. In turn, the criticism gives birth to the positive impacts of competitive advantage on the issues concerning economic growth through ensuring that all customer’s needs and wants are fully met. This is due to the fact that presence of different competitors in the market and availability of diverse products to different economic levels (De Wit and Meyer 2010). What do you find the most interesting aspect of the article? Why is this? The strategy from the inside out through building capability and creating organizations globally is seen as providing the appropriate market opportunities to the industry players by observing sustainable economic growth. International and local firms all act within their boundaries when doing businesses while trying to satisfy the customers to their best. However, it is the redesigning of organizations, management systems performance and processes which has made multinationals more responsive than before. What parts of the readings are most difficult to understand? Why is this? The current reading is mainly focused on the inside-out strategy with more organizations considering the approach as a trial and error based. Therefore, the understanding of various imperatives are central in the realization this strategy. Many organizations and the relevant personnel embark on it with the difficulties of understanding the imperatives. First imperative being discovery of asymmetries and their potential which require understanding capability configurations, inside and outside searches. Creating capability configurations through organization design with the involvement of asymmetries towards sustainable capabilities to organizations is not an easy task (De Wit and Meyer 2010). Thus, a lot of commitment and dedication is required which many individuals tend to underestimate therefore its realization meeting challenges and handles to tackle before ensuring everything is inline. Appendix II 2nd Reading: The myth of Globalization According to the past and present researches, Globalization has been referred as the process in which global economies, cultures and societies have realized integration of different economies (De Wit and Meyer 2010). This is achieved through a global network towards political ideologies as a result of communication, transport and trade sectors. What are the key parts the writer is putting forward? The writer in this article tries to put the aspect of economic globalization as the integration of economies at national into international economies by encouraging the practice of trade, capital flow, technological advancements and foreign direct investments. However, the writer focuses on the international marketing by the use of international strategy through the modern and traditional perspectives. From the works of Scholars Saatchi and Saatchi as well as Levitt, the writer is able to feature in the increasing rates of internationalization. According to them, internationalization is the key to the development of global brands and products (De Wit and Meyer 2010). Can you identify some criticisms of this paper and its approach? Despite the positive impacts globalization has brought, there have been negativity into its activities. Thus, the disparity between the rich and the poor has been witnessed as a result of globalization. The concept of globalization has been criticized to have contributed to the growth of competition across the globe. The global perspective on the other hand has become increasingly very important in planning strategy towards standardization. Nevertheless, developed economies are becoming richer and continue developing as the poor and developing economies continue to experience the same level of economic, social, political and environmental crisis due to globalization. However, international markets through multinationals have created conflicts, forces and pressures on integration of strategy across boundaries which have resulted to economic disparities and gaps between economies. What do you find the most interesting aspect of the article? Why is this? The most interesting feature focused in this article is on the underlying assumptions from the global standardization philosophy. It is argued that global products and brands are in support of international business strategy (De Wit and Meyer 2010). It is assumed that customer needs, wants and interests have increasingly become homogenous throughout the world. Moreover, substantial economies of scale in production as well as marketing are believed to be achieved through global markets. Lastly, the aspect of the willingness of people globally to sacrifice preferences in product qualities, designs and functions has also been recognized. What parts of the readings are most difficult to understand? Why is this? Homogenization of the world’s needs and wants has proven to be difficult in understanding. The concept of homogeneity of global products has ever been increasing year after year; all in the name of satisfying customer’s needs and wants worldwide. However, it has been made more difficult by the presence of global market segments which have been formed as result of products with similar needs and patterns in the markets. Lack of homogenization has also made international marketing strategy a significant topic due to the number of identified global customer segments in relation to global products and brands (De Wit and Meyer 2010). Read More