Strategic Issues and solutions – Pipeline Supply Company
Introduction 商业战略论文代写
Strategic planning, decision making, and direction are the most important factors that contribute towards the success or failure of any organization. If the strategic direction is not right, there is a high chance that the company would fail. It is important to understand that the operational excellence will go in vain if the strategic excellence is not achieved and the company has to set the right strategic direction by identifying some of the issues in the strategic planning and direction of the company (Ansoff et al, 2018).
The identification and then planning a new direction with the futuristic approach is most important for organizations in today’s quickly changing business environment. The companies need to focus on the strategic and operational alignment with the environment of the business for current and future trends (Hill et al, 2014). Another important thing that must be noted that if any strategy or strategic direction has provided success in the past does not means it is going to provide success in the future as well. The environments and the situations continuously change and if the organization does not respond to the changing environment, the company can lose the growth and market share (Hitt et al, 2012).
Keeping in view the importance of strategic issues and direction, the report is preparing for Pipeline Supply Company in order to identify the strategic issues currently the company is facing and then come up with a solution for the issues with a futuristic approach that will most probably be providing the company a chance to grab the current and future opportunities for the long term and continuous growth.
Pipeline supply company 商业战略论文代写
Pipeline Supply Company is the manufacturer and supplier of the steel products such as pipes, fittings, and steel structures to the oil and gas industry of Oman. The company is actually a supplier for the different companies working in the oil and gas sector of Oman. The company was established in 1984 with an ambition to be the best and provide the most useful and cost-effective products to the oil and gas industry of Oman. The company has a warehouse in the Muscat so that the supply can be made effective, easy, and cost-effective. The warehousing capacity of the company has grown over the years of its operations. The company has diversified in other products as well to supply the products to the oil and gas sector of the company but it has done related diversification but nor unrelated diversification (PSC, 2019).
Strategic issues identified
Pipeline Supply Company has gained good success over the last three decades of its operations but it does not mean that the current or past strategies are going to provide success just because the strategies have provided success in the past. It is important to critically analyze the strategic direction of the company for aligning the changing requirements of the industry and the strategic direction of the company. There are some strategic issues that are identified in the Pipeline Supply Company that can be harmful to the company in the future if not changed or redirected., it is important to understand that the issues identified are of strategic nature but not of operational nature and it is important to critically analyze the strategic nature rather than the operational nature of the issues.
Innovation vs cost leadership 商业战略论文代写
Innovation is the most common and desirable requirement in companies in today’s world. The Pipeline Supply Company has actually focused on the cost-effectiveness rather than the innovation in the products or services. This is one of their main strategic issues that need proper and detailed attention. The company has gained success in the past due to cost effectiveness and the company considers it the most important part of its success. There is no doubt about past success but the world has changed and it has globalized and ignoring the fact of innovation in every industry can be a disaster for the company. It is an important aspect that needs consideration that the industries in the world are becoming innovative
The world had become a global village and it is not difficulties for the companies from, other countries that provide the same products to come and hit the target market. It is highly possible that the Oil and Gas companies would be requiring the most innovative products and consult some other companies that have the ability to be innovative and creative. the oil and gas industry all over the world is focusing high on the innovation side to produce some new ways or energy or come up with the latest and innovative products to take advantage and become the market leader (Perrons, 2014). This vision of the oil companies cannot be achieved if the supplier does not bring innovation in the supplying products so that the end products can be innovated (Narula, 2014).
The equipment the PSC supplies are important for oil and gas and there is no doubt that the companies will seek for the innovating products. 商业战略论文代写
It is important to understand that the companies are focusing on developing the biofuels so that the issues of environment and scarcity of the resources can be eliminated. This is an opportunity for the suppliers of oil and gas companies to provide machinery and other products that help the companies to come up with high-level biotechnology to produce the most innovative, valuable, and useable biofuels to take competitive advantage all across the globe.
It has been seen that the oil and gas companies asked the company to show some innovative product even at a higher cost but the cost leadership strategy of the company does not allow them to invest heavily on the research and development which actually restricts the company to be innovative (Mcgowan, 2014).
Other than investment in the research and development of the company, the company does not allow the employees to be innovative and creative by coming up with different ideas to solve problems and bring new technologies. The employees have to do the given task with a high level of operational excellence that is a problem towards the lack of innovation in the company that would provide a serious threat to the company in the near or long future.
Development of new products or service 商业战略论文代写
The approach of the Pipeline Supply Company towards the development of new products and service is defensive. The company is reluctant to become the first mover and it actually believes on the following. the company waits for someone in the world to produce a new product and the company do some research regarding the flaws of the product and then prepare a product that is better than the first mover.
The first mover always has an edge and it became difficult for the PSC to convince the customers about the product that how are they better than the first movers. This is actually a weakness in the strategic direction of the company that the PSC is not a first mover but a follower. This is one of the reasons that the company has not become one of the largest companies around the region or the world.
The first mover always has and advantages and it takes less cost to retain the customers as compared to followers. The most difficult job is to convince the customers regarding the better approach towards the product (Markides & Sosa, 2013).
Reactive rather than proactive – competitive pressure 商业战略论文代写
It is another important strategic issues that need to be given high attention in the PSC for the purpose of gaining continuous and futuristic growth. The company is reactive rather than proactive towards the business environment changes, policy implications, and competitive pressures. It is important for the company to plan before anything negative or positive happen towards the company. The company reacts and till then the threat has been established or the opportunity has been lost. The company has lost few opportunities due to its reactive approach as the other companies are proactive and take the changing business requirements seriously and more proactively to gain the benefits and be better in the market.
The legal requirements or the policy of the governments are extremely important for any business and if the company is not proactive, it can face serious problems as any law can completely change the scenario of a particular industry. Just for the sake of understanding, what if the government allows the foreign companies to operate in a similar industry by providing them tax-free zone? Is there any preparation for the company or what if the government bans the exports or imports of a particular product or service? Same is the case with some innovation as the company can be facing serious problems due to the reactive approach (Berger-Walliser, G., & Shrivastava, 2014).
The strength of Pipeline Supply Company is the operational excellence rather than strategic excellence and it is important to understand that the strategic alignment with the business environment would destroy operational excellence as well.
Related diversification 商业战略论文代写
The company had expanded and entered into different products for the same industry of oil and gas in Oman. This shows that the company has done the related diversification and the customers belong to the same industry and the products offered by the Pipeline Supply Company are also related to the previous products. It means that the company has a strategic direction towards the oil and gas sector only and the company has expanded in the past and going to expand in the future only with the relevant industry and products.
This is a strategic issue as the downturn in the oil and gas industry can massively impact the PSC to the threatening level. It is important to understand that the reliance of a single industry can be harmful but the belief of the management of PSC is on the Oil and Gas sector. The company aced several issues when there was a cold war in the countries recently regarding the oil prices and the suppliers of the oil and gas companies suffered due to their inability to buy and spend on the supplying products. This was the time when the unrelated diversification would be of great use for the company but the lack of approach towards the unrelated diversification of the company harms the company.
The company does not consider it strategic issues and believes that it would increase the cost and require capital, efforts, and expertise to diversify in the unrelated business but the company is ignoring the advantages of the unrelated diversification. The financial strength of the company can be used to come up with a better strategic direction for the future especially in terms of diversification strategic direction.
Entering the new regional markets 商业战略论文代写
The company has expanded in terms of new products but there is no expansion in terms of new regional markets. Again, this is a strategic issue and the company is highly defensive in its approach towards the regional expansion. It is an important aspect that needs attention because the regional expansion provides the company with an exceptional level of growth. The Pipeline Supply Company believes that the market of Oman is enough to run the operations and it is highly risky to enter a new region as it needs a lot of capital, efforts, and other requirements.
In this aspect, the top management does not focus on the regional expansion and does not even allow to have a proposal or some discussion for the purpose. The company feels safe and easy to operate in Oman even for the future and long term but the company is ignoring the fact of globalization. If the company is not going to expand its customer base with diversity, it is difficult for the company to survive in case of any strong competitor that has a diversified customer based with the ability to be innovative and cost-effective.
The company needs to understand that in case of a decline in the oil and gas industry of Oman, what would happen to the company? This is a question asked by many employees but the top management seems not to answer or even interested in the answer if the question which is one important strategic issues that can have a serious negative impact (Higgins, 2017).
Recommended solutions and strategies for the strategic issues 商业战略论文代写
After the careful and critical analysis of the strategic condition of Pipeline Supply Company, a set of recommendations is prepared and each identified strategic issues is discussed in detail with respect to providing a solution. Many factors are kept in mind during the development of solutions and it is highly understood that the resources of the company should be kept in mind during the development of recommendations so that the recommendations and solutions are c completely practical and feasible for the company. The solutions are provided to come up with a strategic change and the practical approach is given rather than just focusing on theory. It is also mentioned in the recommendations that how the company can apply a particular strategic direction to overcome the strategic issues identified.
Solutions for lack of Innovation in strategic thinking and direction
The innovation is breathing for the companies in today’s world and the company needs to implement the innovation in the company. The following recommendations are provided to practically achieve innovation in the company
- The company first needs to keep operational excellence and cost leadership in operational areas and put a parallel focus on innovation. The company must continue with good things in the operations but it is the strategy that needs some alteration
- The innovation can be achieved by achieving the innovative work behaviors of the employees. The company needs to train employees for the purpose of being innovative and creative. proper training sessions should be given to employees in order to achieve innovative work behaviors that would provide the company with multiple innovative solutions for many problems. The innovative behaviors from employees will most probably result in some innovative products or service (Yidong, T., & Xinxin, 2013). This innovative behavior would be helpful for the company to survive in the innovative industry of Oil and Gas products.
- The involvement of employees in the decision and strategic planning process is crucial for innovation. The companies that involve employees tend to be more innovative as compared to others. This will allow the PSC to have multiple opinions and continuous brainstorming of the employees for the purpose of taking a decision and setting directions. This would increase the probability of the innovation outcomes and solutions for the problems. This would also most probably result in some innovative process that will reduce the cost to an extreme level along with providing the final product or service with innovative features as well.
- The employees should be allowed to be innovative and creative and the participation of the employees should be appreciated. This way, the employees will not be afraid of giving the innovation or creative solution and all of sudden, any employee will come up with highly innovative and valuable decision (Afsar et al, 2014).
- Lastly, the company has to invest in the research and development of innovative products, services, and processes as well. The investment in the innovative process is extremely important as the innovative process can completely change the shape of the organization in terms of operational and strategic excellence. The company would most probably be producing innovative products through innovative processes. The aim of the investment in the research and development should be innovative and creative outcomes.
One thing is important to keep in mind during the implementation of the above mentioned innovative plan that the company has to understand that it is a gradual process to develop innovative work behaviors. The behaviors are not developed within days but it took time and the company has to provide continuous training, opportunities, and time to the employees to develop the innovative work behaviors (Katzy et al, 2013). It is also important to keep in mind that the objective of achieving the innovative work behaviors of the organization will ace hurdles and failure but the top management has to be committed towards the cause for the pose of achieving the innovation in the company for the continuous, long term, and sustained success of the Pipeline Supply Company.
Solution for the development of new products or service 商业战略论文代写
The company needs to be the first mover in the development of many products or services. The company needs to change its strategic direction from being the follower to the first mover. The following solutions and recommendations would achieve this goal
- The outcomes of the research and development should be translated into practical products or service by taking the help of external experts if needed.
- The company should encourage the employees to be the first mover and thinking with the approach rather than defensive approach, this will create a culture in the company that will be focused towards developing the products that no one has developed in the industry or market.
- The company can refine the process of product development by prototyping concept. Prototyping means offering the products to small customers with the potential to make some changes according to feedback. The new product development should follow the prototyping and the company needs to provide some of its units to the customers and take the feedback from them. Make important changes that are required and then launch a final product or service with a massive marketing campaign with an aggressive approach to be the first mover rather than having the fear of loss and being defensive (Cleff & Rennings, 2012).
The above-mentioned recommendation would be very useful if the mindset is changed in the company. The company should take it as a cost but it is actually the investment of the company. The money and efforts spent on the research and development of the new products to become first movers would be providing high returns more than the normal course of investments. The company needs to be confident and take the decision with a high level of commitment and motivation towards achieving the profits and high returns through the new product development.
Solution for reactive rather than proactive – competitive pressure 商业战略论文代写
The companies that react do not take the commanding position but they kept on justifying while the companies that take the proactive approach stay always on the commanding position as compared to competitors and better deal with the changing scenario of the business or the needs of the customers. The solutions for solving the strategic issue of being reaction are given below with a practical approach towards it
- Keep an eye on the competitive position and keep analyzing what competitors are doing rather than just waiting for the companies to make an impact
- The company has to be proactive in terms of changing customer needs and wants, competitor’s activities, legal changes, and other business-related factors that change quickly and create a massive impact on the company.
- The company regularly needs to conduct an environmental and industrial analysis in order to be proactive otherwise the changes in the business environment would create issues for the company (Wetzstein et al, 2012).
- The company can be proactive if the culture of thinking for future is developed in the company and the top management needs to support the futuristic approach.,
- The Pipeline Supply Company needs to make sure that the company continuously review its strategic direction and make changes if required rather than waiting for others to take action.
Solution for the Related diversification 商业战略论文代写
The related diversification is no doubt a good approach but it is important to understand that the reliance of a big company like Pipeline Supply Company on a single industry can cause trouble in case of some downturn in the industry. The company has huge expenses and in case of downturn in the oil and gas sector, the company can go down pretty quickly.
It is also important to understand that any competitor’s move or change in law for the oil and gas sector can completely change the scenario for the strategic units of the company linked with the oil and gas sector. This heavy dependence on the one sector rises the importance to diversify in an unrelated field for the purpose of having a diversified portfolio with the presence of unrelated products or industries (Boschma & Capone, 2015). The recommendation for aching the unrelated diversification to solve the strategic issues of related diversification only is provided below
- The company first needs to carefully analyze the industries or products with future growth that are unrelated to the current operations of the company. The company can take the help of external experts to just analyze and take exposure to different industries that can provide future growth. 商业战略论文代写
- The company the needs to analyze different relevant factors for the selected industries or products such as the competing, profit margins, future growth, the macro external environment of the industry or product, and the barriers to entry and exit the industry along with the capital required. This analysis would be highly useful to identify the attractiveness of a particular product or industry in general and the investors can gain the advantage of this attractiveness if there is (Asad, 2012).
- The company needs to shortlist the products or industries that are attractive and then analyze them again with a different perspective in order to make the best choice.
- The company needs a conduct an internal analysis with respect to capital, abilities, and skills the company has, the potential to survive and grow, and the ability to run the business with little or high irrelevance (Kang, 2013).
- After the careful internal analyst of Pipeline Supply Company, the company needs to match the internal analysis with the external analysis done for different products or industries and select the product that is best suited for the company in terms of capital requirements, skills and abilities, and the ability to grow with a futuristic approach.
Solutions for entering the new regional markets 商业战略论文代写
The expansion of Pipeline Supply Company is limited to the product but there is massively important for the regional expansion and there is no doubt about the efforts a capital required for the regional expansion (Boso et al, 2017). Regional expansion actually diversifies the customer base that can provide exceptional benefits as if the oil and gas industry of Oman goes down, the company can keep the firm base due to customers of another regional market. There are several regional markets that are massive with respect to oil and gas industry and the company can enter in an attractive market. To enter the market, the company needs to follow the following strategic recommendation
- Find out the regions that have the most potential for the future for the oil and gas industry
- Conduct a thorough environmental analysis of the selected regions with respect to the oil and gas industry
- It is important to find out the attitude of the governments and people towards foreign direct investment in the company and the support provided by the government for the foreign companies, this is one of the most important points that make the decision in the favor or against a particular region (Verbeke, A., & Asmussen, 2016).
- Select a market entry mode which is also most important as the decision is based on the capabilities of the company to enter a regional market as well as different factors of the region (De Villa et al, 2015). There are many international markets strategies that the company can choose from and that includes franchising, licensing greenfield investments, partnering, and joint venturing with a local firm. All of these are feasible but depending on the resource of the company and the environment of the region. If the company wants to be safe from the capital point of view, franchising is a good strategy to enter the new markets (Shenkar et al, 2014).
Final verdict and preferred strategy 商业战略论文代写
The above-mentioned strategy issues and strategies cannot be implemented at one time and there is a need to pick one priority strategy that can help to achieve the other strategies in the future as well. The recommended preferred strategy is provided below with critical and logical reasoning
The company needs to adopt the strategy of incorporating the innovation in the company on the topmost priority basis as it would develop the innovative work behaviors of the employees. Once the employees have the innovative work behaviors, the company would find ways for other strategic issues with much ease but if there is a lack of innovation in the behaviors of the employees, the achievement of other strategic solutions would be a big issue for the company. Therefore, the Pipeline Supply Company needs to achieve the innovation in the company incorporating a culture of supporting innovation and developing innovative work behaviors of employees for the long term and sustained grown in the rapidly changing globalized business environment.
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