Introduction
Traditional approaches to strategic management have prevailed in the literature and academic attention throughout the 1980s, but it may be questioned whether they are realistic and/or relevant for strategic management in the 21st century. One of the distinct features of the strategy concept is the effort devoted to planning and control, so that all activities of an organization can and will work toward a common set of objectives against which their performance can be measured (Drejer 2002). The process of strategic management involves the systematic examination of a number of interrelated elements, which results in an explicit statement of company objectives and how they are to be achieved. The ultimate purpose of strategic management is to secure competitive advantage of the organization in question (Drejer 2002). Strategies are made by businesses to be able to perform well in its industry and react well to the different problems they have encounter in their day to day operations. Companies use strategic management to maintain their standing in the market and attain some advantage over competitors. One company that makes use of strategic management is PCCW and its subsidiaries particularly the only maker of yellow pages in Hong Kong which is PCCW Directories Ltd. PCCW directories has been standing in its industry for a long time without much threat from newer and more innovative companies. Such feat can be attributed to the strategy it has and how the strategy is managed and implemented. PCCW directories strategic management is based on the company’s desire to serve the clients. The paper will discuss five strategic management project topics and integrate it with PCCW directories.
Mission/Goals
The company’s mission/goals include:
Discussion of strategic management topics
I. Undertaking SWOT analysis and making strategic choices
A. External Analysis: Porter’s five forces
Potential Entrants
PCCW Directories Ltd has been around for a quite some time and the company is not greatly affected by the new entrants. The influence of potential entrants to the company is weak. The company is the only company in Hong Kong that is given permission to publish yellow pages thus any new entrant will have difficulty in gaining clients not unless they can provide innovative strategies that can thwart PCCW Directories from its position. The yellow pages made by PCCW is unique in terms of appearance and overall presentation thus if any new entrant want to compete with PCCW’s yellow pages they need to have a huge investment to create products that have the same caliber as the yellow pages of PCCW directories.
Competitive rivalry
Competitive rivalry has a low influence on PCCW Directories. PCCW Directories has lower concerns on its competitors since there are limited competitors in the directory industry. The competitors cannot give much problem to the company since it already acquired majority of the business establishments in Hong Kong as its subscribers and clients. But due to the newer trend in the directory industry, competitive rivalry is becoming a concern to the company. PCCW directories knowing the decline of printed directories had to diversify the products to internet (iYP.com) and YP on paid TV (Channel 502 of nowTV – a paid TV owned by PCCW group), etc. Thus in the internet sector, New World Telecom becomes one of the close competitor of PCCW Directory. New World is a partner of Yahoo search that markets sells similar products.
Substitutes
PCCW Directories Ltd. has few substitutes in relation to their yellow pages products. The company has made use of both print media and internet media to deliver their services. No other products or services have yet equaled the company’s product and service and it is the reason for the company’s success. However, PCCW Directories is facing fierce competition in its internet media market due to the major players the online media market – Yahoo and Google. Furthermore, other websites such as Sina, MSN, etc are also gradually growing its online business. PCCW Directories has to be fully alert of maintaining its competitiveness in its online business. On the print media side, yellow pages has to further define and develop its uniqueness as the printed version can be easily substituted by online products and other type of directory or magazines in the market.
Bargaining power of buyers
The bargaining power of buyers highly influences PCCW Directories. As much as possible the company maintains reasonable prices for their products. When the clients try to dictate lower prices PCCW Directories tries to know whether it is reasonable. PCCW Directories sees to it that a big part of decisions on prices will be based on suggestions of the clients. For PCCW Directories Ltd, the bargaining power of its buyer is gradually increasing as they are more and more similar types of products and services available in the market.
Bargaining power of sellers
The bargaining power of sellers highly influences PCCW Directories. The company makes sure that their suppliers have high bargaining power through helping them show their importance in the industry. PCCW Directories makes sure that the price being asked for a material has the same value as the same materials’ quality. This will ensure that budgets will not be wasted. PCCW Directories Ltd has to be aware of its partnership with its online services partners. PCCW Directories Ltd has to make sure that every part of the agreement with the online services partners will be followed. Any adverse changes or violations in the partnership agreement will incur a certain amount of risk to the company.
B. Internal analysis: Strength and weakness
PCCW Directories’ strength is its superior efficiency. The company’s products are made from high standards with less time wasted in finishing the product. Strength of the company is the superior quality of their products. The company creates products that are known for its quality, such product is trusted in Hong Kong. Furthermore a strength of PCCW Directories’ is its ability to make superior innovation on their products. PCCW Directories tries to advance its products into something innovative like YP on TV (a paid TV Channel on NOW TV and YP search on an EYE fixed line device that will cater to home users. The company doesn’t rely on age old practices in creating the products. They try to learn and adapt to changes in how yellow pages are made and how such product is presented. A strength of PCCW Directories is on its superior customer responsiveness. The company makes sure that any complains or questions from the clients will be immediately answered.
A strength of PCCW Directories is its resources. The company makes sure that the resources are made from the best materials and it can easily be attained to prevent any operational delays. The resources of the company can be both tangible and intangible. The tangible resources are the materials used for the yellow pages. The intangible resources include the internet, television, partnerships with other groups and some other newer mediums. Lastly a strength of PCCW Directories is its capabilities. The company enlists the best personnel in the industry. They are the ones that create the products from high standards. PCCW Directories make sure that they hire someone with enough potential to assist the company in achieving its goal. The main weakness of PCCW Directories is its culture of putting much power on the top management. The company refuses to share decision making processes with its other branches or divisions. The top management cannot always have the information needed to make decisions on the company’s processes; some decisions may need some inputs from other sectors in the firms.
II. Functional level strategy
PCCW Directories to compete with the emerging global competition makes sure that its customer responsiveness performs well. This strategy creates a stronger bond between the client and the company. PCCW Directories has its strategy focused on efficiency wherein every action should be done with much precision and less time used. PCCW directories boast of Quality products that are made from well thought out standards. The idea behind this is the company believes that the clients should receive what they are paying for. PCCW directories believe that innovation will always be an important part of a business’ strategy since innovation can help create products that will help a staggering company recover. Innovation is used by PCCW directories to make sure that clients will not easily lose interest in the company. PCCW directories had innovation through making use of internet and TV medium. The company also tries to change its strategies on manufacturing, marketing, materials management and products development to meet changes in the environment.
III. Business level strategy
Competitive advantage can be acquired by a company through a good relationship with the internal and external environment. PCCW Directories makes certain that the company maintains its competitive advantage by having a good relationship with the clients and giving assistance to their every need. The company sets up different medium of communication which clients can use to contact representatives of the company. In its business level strategy the company makes sure that the customer’s needs are satisfied. In PCCW directories’ case they make sure that they satisfy the customer’s need for a venue to show their contact numbers for their own set of clients. In other words PCCW directories provide means for non competitors to get in touch with their clients. PCCW directories through the yellow pages assist the clients in looking for the contact numbers of businesses or establishments they want to transact with for a product or service. The customer group that is satisfied includes the non competitors as well as their clients. This customer groups rely on the company’s services for them to maintain communication with each other.
The Distinctive competency of PCCW directory focuses on the extensive reach of the company. The company satisfies the need of its non competitors by having a wide reach that can reduce the need for the non competitors to make use of advertisements. The company satisfies the need of clients through having a wide reach that helps them reduce the need to use various equipments to determine the contact numbers of businesses they want to transact with. Based on Porter’s Cost Leadership tools the company has satisfied its goal of aiming at the average customer with the focus of satisfying them. The company engaged in a limited amount of market segmentation but maintained its own set of clients. The company is known for its value of efficiency thus it was able to lower some of its cost. Based on Porter’s differentiation tools PCCW directories the company has satisfied its goal of pursuing a high level of product differentiation wherein the company was able to create a different kind of product that managed to survive in the business environment for a considerable number of years. Even if there are changes in the industry, PCCW directories have managed to maintain the popularity and uniqueness of their product. The company was also able to be responsive to customers through after-sales service and product assistance systems wherein questions from the clients are given resolutions. Based on Porter’s focus strategy the company has satisfied its goal of pursuing a high level of product differentiation. The company has made sure that their product is not only different but something that will leave a mark in its industry. The company also chose one specific niche market and concentrated on it. The company chose Hong Kong as its niche market and put a lot of effort towards it so that the company will be successful in that market.
IV Organizational Structure
The organizational structure of PCCW Directories makes use of autocratic ideas wherein the decisions within the company are made by only the top management. The actions of the company will only be based on the point of view of the top management. PCCW directories is on the functional structure and it was able to task grouping facilitates through productivity and specialization. Through the functional structure the company had better monitoring of work processes and individual contributions. Moreover the company had greater control over organizational activities. PCCW directories were in the centralized structure wherein decisions were made by only the top management. Each member of the organization has been given specific tasks that are integrated into their capabilities and personalities. PCCW directories make sure that the line of communication within the company remains open so that any problems in operations and performance can be easily fixed. PCCW automatically checks for a smooth flow of its resources. The company makes certain that the capabilities will be continuously developed for a better performance.
V. Evaluating strategy performance
Balanced Scorecard (BSC) is a performance measurement system focused on results. It is flexible and possible to apply differently in different organizations. In general, there are no directives on which performance is to be measured. BSC only provides guidance. The application of BSC should be unique to each organization and to levels in the organization. People should of course be careful when using different models at different levels of management to avoid confusion in the interpretation of the results (Kanji 2002). The balanced scorecard is seen as a strategic management system that helps to incorporate all measures that have importance to PCCW Directories. The use of BSC helps the company maintain a communication with its personnel. The use of BSC also helps the company know the action it has to do to motivate an employee. BSC concentrates on the firm and different issues surrounding it. It takes a look at the internal and external problems faced by firms and what can be done by a firm to change the threats of the problems and realign it with the overall goal of the organization. For every aspect of the organization a different BSC is used to check inconsistencies and problem areas that can still be changed.
Conclusion
One company that makes use of strategic management is PCCW and its subsidiaries particularly the only maker of yellow pages in Hong Kong which is PCCW Directories Ltd. PCCW directories knowing the decline of printed directories had to diversify the products to internet and YP on paid TV (Channel 502 of nowTV – a paid TV owned by PCCW group), etc. PCCW Directories has to compete with the emerging global competition and makes sure that its customer responsiveness performs well. PCCW Directories makes certain that the company maintains its competitive advantage by having a good relationship with the clients and giving assistance to their every need. The organizational structure of PCCW Directories makes use of autocratic ideas wherein the decisions within the company are made by only the top management. The balanced scorecard is seen as a strategic management system that helps to incorporate all measures that have importance to PCCW Directories.
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Credit:ivythesis.typepad.com
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