Term Paper on "Aligning Competitive Strategy With the External Environment"

Term Paper 4 pages (1172 words) Sources: 1 Style: APA

[EXCERPT] . . . .

Aligning Competitive Strategy With the External Environment

In his article on environmental scanning and its effect on competitive strategy and organizational performance in small firms, Beal (2000) completed a thorough literature review to serve as the theoretical foundation of primary research into the frequency and scope of environmental scanning completed by CEOs of both large and small organizations. The delineation of high and low rich information sources is also included in the analysis, in addition to twenty-three different items to measure the five dimensions of competitive strategy as well. The two major hypotheses are that both the frequency and scope of environmental scanning will be positively related to environment and competitive strategy alignment. Results that emerge from the primary research and subsequent factor analysis however is at times contradictory and at the same time, intuitively obvious in that environmental scanning can provide a very accurate assessment of the stage an industry lifecycle is in as derived by competitors, consolidation market forces, and pricing strategies for example. The analysis, while useful as a glimpse into external environmental scanning, does not however provide enough of a solid theoretical base to build broader conclusions on.

Critique of the Article

In analyzing the role of environmental scanning practices from both a scope an d frequency perspective by size of company and relative richness of information, in addition to measuring the twenty-three items that were specifically created to measure the five dimensions of competitive strategy, Beal (2000) sets forth a theoretical foundation that captures on the one hand, findings that intuitively make sense yet also contradict the hypotheses of the study at the same time. Organizing the twenty three factors into four main sources of differentiation including innovation, marketing, quality and service, when analyzed through factor analysis using Varimax rotation, shows that above all factors measured, the strategy of differentiating on quality and benchmarking best manufacturing processes in the industry (.863) are the most critical of all. In other words this analysis is saying that the ability to consistently produce high quality products is the greatest single differentiator over time. Where Beal fails to bring greater value into this specific area of research however is in not delving deeper into which specific processes are those that are the most targeted for best manufacturing process definition and improvement. Critically analyzing this specific and highly significant result of the research, one could argue that the best manufacturing processes across industries vary significantly by size of manufacturer and that even in the sampling frame of this research there is wide variation. To embrace best practices of manufacturing processes, which is the implication of this finding without guidance as to which processes to start with first is a major omission of this research. Second, the research points to the second most important factor being the improvement of existing customer services (.833), yet again Beal does not delve into which specific processes within customer service need to be improvement. This finding then is so generic it could apply to all industries at any point in their lifecycle. Building differentiation through brand and company identification (.829) and R&D for new products (.827) follow the same logic and as a result are equally generic in their ability to be prescriptive to small manufacturers. The twenty three factors divided in four areas of differentiation yield findings need to be defined another level or two deeper in order to be relevant to small manufacturers. The immediate issue of which manufacturing and services processes to target for improvement and the need… READ MORE

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