MGT 498 Week 4 - Learning Team Paper - Competitive Advantages Paper (Riordan)
MGT 498 Week 4 - Learning Team Paper - Competitive Advantages Paper (Riordan) MKT421
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Date Created: 11/13/15
Running head: COMPETITIVE ADVANTAGES 1 Competitive Advantages Names University of Phoenix MGT 498 November 21, 2011 Professor Competitive Advantages COMPETITIVE ADVANTAGES 2 Riordan Manufacturing is a fortune 1000 manufacturer of plastic goods. This company has recently made changes in the way they market their products. Learning Team B will use prior research to analyze and determine which competitive advantages Riordan analyze and determine what competitive strategies Riordan can use to improve innovation and sustainability of business operations in both the United States and in the global market (University of Phoenix, 2008). Team B will also explain their choice of competitive strategies and how the strategies may affect sustainability of longterm performance at Riordan. Finally, the team will explain how the global market would affect the business strategy of Riordan manufacturing. Competitive advantages Riordan has in common with other companies Riordan Manufacturing has many competitive advantages in common with companies researched last week such as WalMart, Sprint, Hewlett Packard, Amazon, Microsoft, Walgreens, and Apple. Riordan has products that many competitors do not have, or may have but are of less quality. Riordan has a competitive advantage as they have more ergonomic, cheaper, and better quality products than the oppositions. The same applies with companies such as WalMart and Apple; WalMart offers good quality products for “everyday low prices” and Apple provides electronic products that they are experts in generating. Keeping track of international developments with other firms and storing historical sales data are competitive advantages that causes Riordan Manufacturing to leader in the manufacturing industry. Analyzing previous data pertaining to sales, profit margin increase or decrease, production, research, and development are some of the same competitive strategies used by Boeing and Apple, which discussed in last week’s readings. Riordan conducts COMPETITIVE ADVANTAGES 3 environmental scanning analysis to assess the needs of their clients so they can be responsive to their demands. Diversifying the product line to supply different industries not only gives Riordan a competitive advantage, diversification also makes the company more valuable and creates opportunity for expansion. Current list of clients include Department of Defense, automotive manufacturers, aircraft manufacturers, beverage makers, and medical suppliers. Competitive strategies Riordan could use to improve innovation and sustainability of business operations domestic and global Riordan also owns many patents on its processes and products such as using hightensile strength plastic substrates to manufacture polymers. In the same way, some of the companies researched last week have their own patents. Apple, Sprint, and Microsoft have patents on their products and services, which block other competitors to sell those products or offer those services. Patenting a product or service is a huge competitive advantage for a company because they have a market that no one can compete in besides him and herself (Rao, 2005). Many other companies in the world apply patents to their products or services to climb up the competition hierarchy. Maintaining an innovative and team oriented environment is Riordan’s commitment to its employees. Creating cross functional team with varying skill levels and expertise is strategy that will help the team operate successfully in a dynamic, complex environment. Eliminating traditional bureaucratic hierarchal structures while promoting autonomy and flexibility has enabled companies like Microsoft and Google to compete in global markets with economies of scale. Financially, Riordan is doing well with revenues exceeding a billion dollars. The COMPETITIVE ADVANTAGES 4 organization has a lead on competitors in the same industry, but they should not become complacent because developing a competitive advantage is only temporary. To sustain in a global market, Riordan should continue to support an environment of learning and growth to strengthening core competencies and building tacit knowledge. Competitive strategies and how they may affect sustainability of longterm organizational performance The chosen competitive strategies help Riordan create a sustainable product because by their patents; Riordan will be the only company that can offer the product and service compared to others. The company can dictate the price and how efficient it needs to be when offering their service. Because the company has a market edge with their patents, Riordan can sell their service at a competitive price but also one that will help the company maximize profits. If Riordan decides to stick with its business model and not adapt or research new ways to do plastic polymers, it will cease to exist in the long term. Introducing more innovative and cost effective ways, if Riordan is the company that does, will be the company that continues to survive and thrive above the marketplace. Riordan cannot remain complacent and stick to its one key product. The company needs to adapt and be a leader and not a company that reacts as it currently has. Riordan’s commitment to improving the technologies of existing polymer and to forge into new advances of plastic is why they will be in business longterm. Innovation is why companies like Apple and WalMart are so successful. Innovation not only applies to technology but also image as well. In Riordan’s case, technology is the type of innovation that needs to be considered. Innovation should not be an issue because they have revenues over $1 billion. COMPETITIVE ADVANTAGES 5 Riordan’s annual earnings are around $46 million and that can be attributed to how they operate their business. Riordan’s business objectives of reduced costs and outputting ergonomic cheap products has made them very successful. Another competitive advantage is their longterm relationships with their counterparts. If everyone is happy and has a healthy business relationship, success is inevitable. The Global Market Affect According to the Riordan Organizational strategy for the next two years, they are focusing on creating a larger customer base. The mission statement for their customer relationship is to strive to be a solution provider for the customers and not be a part of the customer’s challenges (University of Phoenix, 2008). The mission statement goes well with their business strategy. According to Bartlett and Ghoshal (2011), “a welldesigned global strategy can help a firm gain a competitive advantage if they use specific sources of competitive advantages to affect their global strategy” (para. 2). Expanding the company to China in 2000 allowed them to be in the right place for Global expansion. The global market would have a positive affect for the business strategy by allowing access to other countries resources such as labor, and raw materials; the sale of older products in lesserdeveloped countries and take advantage of economies with access to more customers (Bartlett & Ghoshal, 2011). With the price of fuel rising to ship products to the customers around the world and with overseas automotive manufacturers in more than 20 different Asian countries (Automotivelinks, 2006), acquiring a location in China will allow the Riordan Organization to meet their sales strategy far beyond the next two years. COMPETITIVE ADVANTAGES 6 Another effect from globalization for the Riordan Corporations has been the hiring of Litteral and Finkel international law firm that provides Riordan with legal services in the areas of tax law, real estate transactions, employment law, immigration matters, civil litigation, workers compensation, labor law, and customs regulations (University of Phoenix, 2008). With globalization, the company needs a good law firm that will be able to provide services knowledgeable in overseas laws affecting the strategy of the corporation (University of Phoenix, 2008). Conclusion The environment changes rapidly in today’s society, and so do the environmental factors for companies. Opportunity could become a threat later and vice versa. This is an ongoing process. Businesses set their competitive strategies and try to grab opportunities and avoid threats through exploiting their strength and overcoming their weaknesses, domestic and global. COMPETITIVE ADVANTAGES 7 References AutomotiveLinks. (2006). Asian Manufacturers. Retrieved from http://www.automotive links.com/mak/mak/asi.htm Bartlett, C. and Ghoshal, S., (2011). Global Strategic Management. Retrieved from http://www.quickmba.com/strategy/global/ Rao, P., (2005). Sustaining competitive advantage in a high technology environment: A strategic marketing perspective. Retrieved from http://www.thefreelibrary.com/Sustaining+competitive+advantage+in+a+high technology+environment%3a+a...a0138408286 University of Phoenix. ( 2008). Virtual Organizations [Computer Software]. Retrieved from University of Phoenix, Simulation, MGT/498 STRATEGIC MANAGEMENT website. University of Phoenix. (2011). Week four assignment. Retrieved November 17, 2011, from University of Phoenix, MGT 498 Strategic Management Course Web site. COMPETITIVE ADVANTAGES 8
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