Both porter’s five competitive forces and Tzu’s five key factors that define competitive position compare in the following way.
In the business world, one should be able to analyze their competitors to know their number and capability. When there are many competitors with equally attractive products, the market competition becomes stiff calling for better and improved quality goods and services. The same case applies in the battlefield where one should be able to know the tactics and strategies of their rivals.
Substitutes increase the propensity of consumers to choose alternatives. This should be countered by advanced research to ensure uniqueness of product that meets customer requirements. Companies that employ such strategies have an upper hand in reacting to market changes. Such is the advantage of an army that adopts such tactics.
The analysis is to be conducted for the company to understand their customers, areas of opportunities and building brand loyalty. This helps to identify the importance of buyers and their individual impact on the business. The buyer’s ability to determine cost, if they are powerful buyers, then they can dictate the prices.
In war, battles may be won by eradicating the logistics of enemy’s army. This is a classic war of winning a battle as seen in the Battle of Guandu. The same use of logistic is applicable in the business arena. Companies use their suppliers to ensure a continuous supply of goods and services. The need to have a business plan is important and ensures it works together with the suppliers.
- Threat of new entry
The possible entry of new businesses or war groups in a battle will be a threat to the company’s profit. If the entrance cost is low and there is an assured effective competition, the high competition can weaken your position.
The four books are correlated in a sense that they all revolve around how an individual can apply strategic management to be an effective leader, entrepreneur, manager, and a great marketer among others. The books also outline various factors that can be applied to achieve success in life (Gagliardi, Gary & Sunzi 2003). In simpler words, the books analysis how a person can become ready to capitalize on the opportunities and define the way an individual, institution or a company wants to focus or expand.
Among the four books, “The Prince” and “Steve Job” uses public icon such as Steve Job and Prince to reveal the strategies that one can adopt in order to be a creative entrepreneur. The two books are based on the self-governing state towards achieving success. Steve Job was able to successfully and effectively blend technology and the liberal art to bring about the revolution of various technological and entertainment industry. The “Steve Job” book illustrates how Job observed instructions and caution to achieve various management elements such as character, value, leadership and innovation. On the other hand, “The Prince” demonstrates the most effective strategy of governance. The author, Machiavelli argues that the most effective way to lead and govern population is through decision-making considering the current situation and morality.
On the other hand, Sun Tzu on “The Art of War” expounds how it is important for an entrepreneur to have strategic intent and vision for his company. Strategic management explains how managers evaluate the mission of the company and establishing the company’s design and guiding the company’s plan and objectives to ensure that the management is reliable with the company’s strategy (Gagliardi, Gary & Sunzi 2003). Tzu also emphasizes on the strategic management that go hand in hand with the competitive advantage illustrated in the strategic management.
Leader: Apple’s CEO Steve Jobs was a good leader who was actively involved in the designing of the iPod. He was also a good manager whose management strategies and desire to meet the company’s objectives made the company such a success.
Methods: the company’s method of production of the iPod was strategically made to fit with the customers need. Its other method of ensuring success was through emphasizing on quality and not price. This coupled with good marketing strategies ensured its success.
Mission: Apple’s mission was to produce better products through innovation and creativity. It also ensured the expansion of the product to be more advanced technologically (O'Grady, 2009). This was done through the production of new generation lines between the year 2002 and 2004 where it had expanded its production line with the iPod mini, iPod shuttle, iPod photo and the iPod U2. The Apple products varieties covered the market space completely.
Competition: the company had set a high pace for its competitors. This gave it an almost monopoly of the market with a commanding 80% of it. Its competition strategy was focusing on the consumer needs, producing quality products and broadening its distribution channels. Its innovativeness outdid its competitors therefore gaining customers trust and ensuring its long time success.
The idea of customer segmentation requires the company or an institution to divide the customers in a manner that they understand why they are demand their products. This is achieved through identifying target demographics and then formulates the best strategy to reach that audience. This allows the institution or organization to build enabling relationship with the customers. According to Sun Tzu, the segmentation is considered as strength in the marketing arena. The smallest form of the element is more manageable than the whole or wider portion of the market. Due to segmentation, marketers are able to develop new ways to focus against weakness and then focus again into a reduced niche or segmented market.
Similar to the segmentation of the enemies in the “Art of War” according to their behavior, the customer segmentation requires the ability to interpret the environment correctly. An effective marketer should also be able to forecast efficiently with regard to the current behavior of their competitors, potential consumers, economy and even stakeholders. Sun Tzu illustrated this strategy on the battlefield by providing clear tips of reading enemy’s behavior. Thus, he provided an insight of the human behavior as he stated that, “when envoys are sent with compliments in their mouths, it is a sign that the foe desires for peace.” According to Tzu, one you are able to identify the behavior of the different segments of the enemies, it is possible to develop new tactics to overwhelm them. Similarly, when a business identifies the consumer behavior, this information can be used to develop better and effective market programs.
History of past performance helps in the strategic management as we forecast the future using the past records. This is through the analysis of past failure and therefore revising our strategies on how to avoid such management hiccups in the desire to achieve success (Jeffs, 2008). This comes through strategic management as demonstrated by Steve Jobs of the Apple Company. The analysis of the past business path and the probable problems that relate to the business failure are the basis for projecting a future path that will achieve success.
Analyzing the history of the company, by the management, helps in planning the future trend of the company. This is through thorough analysis of the past performance and projection of the future that the organization will have to deal with. In the apple industry for example, Steve Jobs had to come up with decisions that forecasted the path of the Apple Company. This was the reduction of its products from 350 to 10, which will be well managed and produced for customer satisfaction.
Historical analysis helps in analyzing the internal and external business environments that had hindered the firm from reaching its full economic potential. It therefore helps in analyzing the firm competitors and planning on viable strategies on how to compete effectively and profitably.
Research based theory and dynamic theory in strategic management emerge together because the dynamics in management calls for more research in the market so as to ensure the firm produces goods and services that meet the customer requirement. This includes management that is effective and efficient and that ensures coordination of the internal and external activities of the firm (Jeffs, 2008). The manager in such a firm is not only a leader in theoretical terms but also a participant in the activities of the firm. The manager’s role is not limited to decision making but his active involvement in the activities of the firm.
As demonstrated by Apple manager Steve Jobs’ involvement in designing the iPod, the manager has more to offer than leadership. His involvement in designing the iPod shows that a manager has more than just the leadership role. The research theory is important and goes hand in hand with the dynamic theory because it is through research that the management is able to identify the firm’s position in the market. Through market research, the management identifies the consumer needs and is able to analyze the level of competition as well as base the decision to be made on the research findings.
Steve Jobs is among the most prominent leader and he is considered a legend. A university dropout who came to take the management of Apple Inc. he implemented his revolutionary management philosophy rather than embracing the common professional management (Dormehl, 2012). Steve success was intertwined in his leadership method, which was strategically suited for the company. His first strategic management implementation was lying off or greatly reducing the Apple products from 350 to ten. This was followed by focus on quality of products other than the firm’s profit. This won the customers trust and this was the beginning of Apple’s success.
His long-term projection and forecasting the future was a credit to his success. Strategic management involves forecasting the future of the company (Dormehl, 2012). Steve did this by sizing opportunities that came on his way no matter how small. His long-term visualization led to the production of iPhones and iPods.
Generally, Steve Jobs employed strategic management values in his time as the leader of the Apple Inc. and the returns were amazing. His creation of meaning to customers and employees was exceptional and resulted to his popular success.
Dormehl, Luke. Different Thinking: Steve Jobs, the Counterculture and How Apple Inc. Took Over the World. London: Virgin, 2012. Print.
Gagliardi, Gary, and Sunzi. Sun Tzu's the Art of War Plus, the Art of Management. Shoreline, WA: Clearbridge Pub, 2003. Print.
Introduction to strategic management. (2009). Retrieved October 22, 2013, from http://highered.mcgraw-hill.com/sites/dl/free/0073381381/609997/wal1527_ch01_Sample_Chapter.pdf
Jeffs, Chris. Strategic Management. Los Angeles: SAGE, 2008. Print.
O'Grady, Jason D. Apple Inc. Westport, Conn: Greenwood Press, 2009. Print.