OBJECTIVES
As a person with knowledge of creativity as an essential element in creating a sustainable business, the author has always brought up to his superiors the viability of strategy formation regarding creativity and at times fail to understand the reasons or logic behind certain strategic implementations imposed on it.
By delving into this project paper, the author intends to have better insights into how creativity and its management is thought up, formulated and then imparted down into the subsidiaries of the company or organization. The author hopes to have an in-depth understanding as to how the creative strategies of the company enable them to compete effectively and profitably in this era of internationalization where competition is extremely intense.
In order to reinforce the learning objectives, two key focal issues were focussed upon, i.e. innovation and diversity. Innovation was discussed with regard to the creativity of the organization where it was renowned for its developmental capabilities to constantly innovate. Diversity came under strategic thinking and formation as the author considered the diverse culture, political climate, economic surroundings, social environment, technological settings, government policies and legal systems in order to further understand the role of creativity in the sustainability of a business.
INTRODUCTION
Creativity can be defined as the efficient and effective implementation of the policies and tasks necessary to satisfy a firm’s customers, employees, and management. Creativity focuses on the careful management of the processes involved in the production and distribution of products and services (, 2005).
More often than not, small companies don’t really have the capabilities to implement strong creative strategies. Instead, these companies engage in activities that various schools of management typically associate with implementing creative strategies. These activities include the creative advertising of products, product development, production and distribution.
However, creativity deals with all operations done within companies and organizations that ensure their sustainability. Activities such as the management of purchases, the control of inventories, logistics and evaluations are often related with creativity. A great deal of emphasis lies on the efficiency and effectiveness of processes. Therefore, creativity includes the analysis and management of internal processes.
DISCUSSSION
A creative approach to business strategy would definitely be more appropriate in business practice today. A creative approach to business strategy has four main objectives:
A) Remain one of the top initiatives in terms of educating entrepreneurs regarding business sustainability. Being the top initiative enables a creative approach to business strategy to command the respect and confidence of most entrepreneurs. Thus, the business is able to expand its operations and enhance its sustainability in the process (, 1988).
B) Encourage more profit than other business strategies. The creative business sustainability strategies that are being laid down by companies are able to meet high quality standards of most entrepreneurs. As a result, businesses who utilize creative marketing strategies are able to earn more profit as against their competitors.
C) Build the best and sustainable businesses with a creative approach to business strategy as the foundation; and
D) Maintaining its independence. Being an independent initiative for business sustainability allows a creative approach to business strategy to continue its tradition of excellence in both its products and services by setting new trends and standards.
In order to achieve these objectives, a creative approach to business strategy almost always includes a business sustainability strategy of selling a combination of local brands and international brands. A creative approach to business strategy also encourages most businesses to aim for broader positions as well as either the top or secondary positions in any market, whether local or international. Any of these positions would be enough for these businesses to deliver a high level in terms of production, marketing and distribution, thereby significantly increasing their chances for sustainability. Moreover, these positions create a platform from which these businesses can sell their premium brand of services, whether educational or entertaining. And with a continued focus on the structures of the costs, the above mentioned objectives should undoubtedly be reached through a creative approach to business strategy (. 2005).
Company Overview
Heineken Taiwan aspires for manageable development as a wide market leader in the liquor industry as well as for dominance in major food markets. In both situations, the Heineken Taiwan products will have to do critical roles. Heineken Taiwan has the capability to establish its dominance in markets normally through acquisition of other powerful grocery stores and their services, which are then integrated into a new, bigger organization. Giving training to its workers, enhancing the organizational functions, and the development of fresh innovations then establishes the positions of the different Heineken Taiwan products. This logically leads in economies of scale that empowers the company to form a supply network for both the local and global products. If a market is being managed by other companies, Heineken Taiwan dedicates its priorities regarding the establishment of a premium sector with its different products.
The goal of Heineken Taiwan is to sustain the profitability of the company in a manageable way, while at the same time consistently enhancing the organization’s operations. The tactics to attain this includes four aspects:
In the year 2006, Heineken Taiwan was able to experience tremendous improvement in various essential metrics. The inventory was limited from above million down to below million and inventory turns increased from below 15 to more than 25. The expenses of profits, not including the advantage from past miscellaneous expenses and the implemented part of the amortization of untouchable resources, went down from above 70% of earnings to below 70% of earnings. The integration of sales and marketing, research and technological changes, and general and operational costs was limited from almost $ 400 million down to almost 0 million, while at the same time enhancing on the speed of changes. Heineken Taiwan’s total earnings are estimated to have grown from barely reaching million in the late 20th century to almost $ 900 million last year.
Organizational Structure
A matrix framework overlays two company forms in order to exhibit the advantages of both. Some world companies implement a matrix framework that mixes territorial with product teams. The product-based framework enables the organization to explore world economies of scale, whereas the territorial framework manages information close to the necessities of each and every nation. Most companies also possess degrees of matrix framework, implying that every divisional team has particular roles, but some topics must be decided in unison across all of these teams. Rather than mixing two separate frameworks, some matrix frameworks overlap an operational framework with project groups. Workers are tasked to a cross-operational project group, yet they also belong to an established operational group to which they come back when a project is finished.
A matrix framework is implemented through the hiring and recruitment of new workers whose knowledge and work ethics jive with the culture. Heineken Taiwan was going into a new market that will recruit a number of highly qualified people from other organizations to support the new initiatives. The matrix framework of organizational structure may need for getting new workers aboard. This procedure usually happens immediately after the workers are recruited, and may be a means to slowly teach the different functional teams with a new culture. A matrix framework is implemented systematically or informally, probably through training of new workers or through a sequence of interactions to current workers at Heineken Taiwan. A matrix framework is helpful in the company and management of shared value mechanisms. Therefore, culture at Heineken Taiwan is shared through obvious or invisible ways and studies indicate that invisible means of interaction seem to be more efficient in altering culture than visible means of interaction and the visible and invisible interaction is depended on to give outside justification for the matrix framework and encourage company workers at Heineken Taiwan to adjust to the new company practices and ethics.
Creativity and BUSINESS SUSTAINABILITY of Heineken Taiwan
The following are the basic reasons why creativity is essential to the sustainability of Heineken Taiwan:
A. Creativity enhances a product’s potential.
Heineken Taiwan’s dedication to quality and creative business strategies for almost three generations now has led to the satisfaction of millions and millions of its consumers worldwide. A creative business strategy is created and implemented by a group of people who pursues the best quality and craftsmanship in terms of ensuring the sustainability of a business. The creative business strategies for business sustainability that Heineken Taiwan use today are still being practiced using nothing but the original and unparalleled elements discovered many generations ago.
Imagine a particular Heineken product’s mild bitter taste, fresh aroma, bright color and clarity. Will these be recognized by the public consumers without the help of creative business strategies? How about the raw and packaging materials used in the production of certain Heineken products? How are we able to make sure that they are able to meet the high quality standards and specifications? The answer absolutely lies on creative business strategy.
It is through a creative business strategy that the policy of Heineken Taiwan in product safety and other appropriate measures are exposed in the production process of all products to prevent their possible contamination. A creative business strategy also encourages the implementation of the principles of the HACCP (Hazard Analysis and Critical Control Points) system as a testament to its dedication to quality and business sustainability.
B. Creativity aims to give Heineken Taiwan products reasonable prices.
C. Creativity effectively promotes Heineken products.
Heineken Taiwan has been able to maintain its reputation as one of the world’s leading companies for years now have been surely benefited form the creative marketing strategies they used. Through their creative business strategies, Heineken Taiwan is able to face the challenges in many of its markets directly. This is made possible by the effective creative business strategies aimed to deliver not only profit growth, but also on building down the foundation of the businesses’ brands and products.
The creative business strategies of Heineken Taiwan are focused mainly on driving the growth of the company’s brands and improving the company’s financial performance. These creative business strategies have also helped Heineken Taiwan secure significant acquisitions and partnerships. And more importantly, these creative business strategies have led to the release of the potentials of the company’s employees, thus building a quality performance- based culture needed for business sustainability.
The creative business strategies of Heineken Taiwan are practically reinforced by the local employees themselves. These moves certainly allow the company to improve even more without the costs of introducing new technologies. These efforts can result in increased financial gains for the company and can allow the establishment of distribution networks for both the local and international products.
D. Creativity establishes connections all over the world.
Creativity enables Heineken Taiwan to grow and expand virtually around the entire globe. This can be made possible through strong efforts to acquire smaller businesses and firms from other countries. Over years and decades, businesses which follow this creative business strategy will slowly but surely established an empire, with strong segment markets that can possibly be established in Africa and the Middle East, the Western Hemisphere, the Europe and even in the Asia Pacific.
In Asia for instance, Heineken Taiwan was able to achieve broad market leadership through various acquisition deals over the years, all with the help of creative business strategies. Heineken Taiwan also exerted efforts to communicate with their customers in every local culture about their products and their impressions. And this was no easy thing because Asians have different tastes in different products. This critical information gathered by the company paved the way for them to make the right decision regarding the appropriate and creative business strategies to pursue.
E. Other benefits of Creative Strategies
The creative business strategies basically help Heineken Taiwan to answer one of the toughest decisions that a company or business organization must do: choosing and implementing marketing strategies. It emphasizes the perfect combination of essential factors in a manner where both the organizational and consumer (target markets) goals are achieved (, 2000).
F. The Role of the Managers
When doing the combination of the essential and creative business strategies, the Heineken Taiwan management takes into careful consideration their target market. They must be able to determine the wants and needs of the market (customer) then utilize the essential mix elements in choosing and creating the creative business strategies and plans that can potentially satisfy these wants. The essential factors must also be able to achieve the goals of the company / organization (, 1999). When making the critical decision of establishing a creative business strategy to fit the needs of a company, the business manager needs to balance the creative elements and then distribute business elements in the mix while watching on the resources with which he / she needs to work with. A separate creative strategy is usually used for each product or for every market segment, depending on the organizational structure of the company. There are certain steps necessary for creating a creative business strategy. It is important to obtain two sets of information; a list of important elements that will be put into the mix model, and a list of factors that influence these decision variables (, 1981).
The commonly used variables in the creation of a creative business strategy in Heineken Taiwan are price, promotion, product and distribution. First introduced by , they are sometimes described to as the four P’s (, 1994). stated that business analysts have practically these four variables to work with when choosing and creating a creative business strategy and scribbling a marketing plan. In the long run, all four of the variables can be altered, but in the short term it becomes very hard and almost impossible to change the product or the distribution channel. Therefore in the short term, marketing analysts are forced to work with only half their tool kit. This limitation all the more emphasizes the significance of long term emergent business strategy planning.
The creative business model can be modified by the managers to allow the inclusion of various sub-mixes. For instance, the promotion mix factor can be further broken down into sub-mixes consisting of advertising, personal selling, viral marketing, and e-marketing. Within the promotional mix, advertising can be further decomposed into an advertising media mix that indicates the degree of importance placed on television ads, internet ads, magazine ads, etc. (, 1998).
Creativity in a Multinational Environment
With the rise of globalization, contemporary businesses have begun opening its doors towards international markets. The globalization factor then allowed the business industry to restructure its primary goals. The introduction of various communication technologies further supported this business transition. While going global leads to promising outcomes, business operators knew that the risks are even higher. Moreover, several factors would have to be considered in order to penetrate international markets successfully.
Creativity is among the many important elements of global business. This generally enables business organizations to reach out to other consumers outside the national borders. However, with the diversity of the markets’ cultural background, preferences and interests of consumers, distributing products and services to a foreign land can be challenging. This implies that creative business strategies would have to be developed and applied in order to meet the needs of diverse markets. There are several ways on how global firms address these demands.
According to (2003), entering a foreign market should involve the reconsideration of the businesses’ creative business strategies. They must first develop a mass-marketing mindset. With this, the businesses should pay particular attention to local aspects such as consumer needs and price competitiveness. All the international marketing efforts of the business should then focus on how to reach out to these multicultural markets. This is actually the application of the local responsiveness theory which suggests that the differences of countries in various aspects should be taken seriously. Business operators should not underestimate the value of local knowledge in global business as this will help them fulfill their international objectives. Multinational firms should then tailor their approaches in accordance to their local markets’ needs. Doing this strategy is where the challenge begins.
Modifying the product or service is one creative example on how foreign firms are able to distribute their goods effectively in diverse markets. Another is by modifying the businesses’ creative business strategy in order to fit global resources to local market conditions. In order to do this, multinational companies can transfer their developed global brands into a new market by means of changing their products’ formulation, prices or packaging. This in turn will increase the products’ appeal to both consumers and retailers. Doing this globalization strategy however, naturally requires considerable investment. Still, this will make multinational companies at par with the local companies. Another possible creative strategy is by developing new resources that are market-specific. This strategy is done when the multinational company acquired some local brands, marketing them along with their global product brands (, 2003).
REFERENCES
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