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Act 2-Principles of strategy: Strategies, References: Growth Idea.…
Act 2-Principles of strategy: Strategies
Factors for developing strategies
SWOT analysis
: It helps the companies implement strategies that leverage strengths and mitigate weaknesses.
Consistency with core values
: The strategies must align with the company's values and mission.
Resource evaluation
: Based on identify the resources needed to implement the strategy, can be finance, human capital, technology, and partnerships resorces.
Competitive advantage
: The correct strategy leverage the company's competitive advantages.
Clear goals
: A well-defined strategy starts with clear and measurable goals
Adaptability
: Strategies must be able to adapt to changing market conditions.
Market Analysis
: Is an analysis of the market that leads into knowledge of customer preferences, market trends, competitors, and potential growth areas
Examples of good strategies in Mexican companies
Soriana
: Soriana and Comercial Mexicana are an example of a Horizontal Integration Strategy. Soriana acquire la Comer to increase its market share
Mexichem
: Mexichem is a leading company in the Latin American chemical and petrochemical industry, this company applied the Vertical Integration Strategy (Backward) to grow in the global market with the acquisition of Vestolit, the sixth largest producer of polyvinyl chloride (PVC) in Europe.
CEMEX
: The strategy of CEMEX with their app "CEMEX to Go" allowed them to improve the user interaction process migrating to the digital field.
Coast Leadership Strategy
: This strategy is based on the premise that less cost = competitive pricing, increased profitability, or both. The key elements of a cost leadership strategy are:
Economies of scale
: Is when in an economy increasing production represent a decrease in costs.
Continuous cost reduction
: The companies with coast leadership are always looking for ways to reduce costs.
Efficient operation
: To minimize the cost companies must streamline operations, minimize waste, and maximize efficiency.
Example
: "IKEA has significantly benefited from its cost leadership strategy by producing massive quantities of standardised goods that consumers can actually assemble themselves". (Growth Idea, 2023)
Important aspect while executing strategies
The strategy must be able to adapt to the changing market and economy.
It is important to measure the result of its application to identify if it is the correct strategy for the objective.
References:
Growth Idea. (2023). 4 Cost Leadership Strategy Examples To Inspire. Growth Idea. Retrieved June 25, 2024, from:
https://growthidea.co.uk/blog/4-cost-leadership-strategy-examples-to-inspire
García, K. (2014) Mexichem inicia proceso de integración vertical y bajos costos. El Economista. Retrieved June 25, 2024, from:
https://www.eleconomista.com.mx/empresas/Mexichem-inicia-proceso-de-integracion-vertical-y-bajos-costos-20140805-0034.html