Has Dick Smith Foods Achieved Strategic Competitiveness?

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Has Dick Smith Foods achieved strategic competitiveness?
La Trobe University MGT3SMG

Lana Neuwirt

17035913

Words

1200

09/09/2011

Has Dick Smith Foods achieved strategic competitiveness?

Lana Neuwirt 17035913

Introduction Dick Smith Foods (DSF) was founded in 1999 and is supporting Australian businesses and economy by distributing and selling products made by Australian-owned companies. For the firm’s competitiveness analysis a broader view on strategic management and its elements is presented in this paper. Strategic management Strategic management process is the action plan of a firm’s formulated strategy and its implementation, whereas strategy is firm’s long term conception of means for attaining objectives, increasing performance and gaining competitive advantage (Rice, Martin, Carpenter, & Sanders, 2010). According to Barney (1991) a firm has competitive advantage when its performed value-creating strategy is not implemented by other competitor at the same time. Due to the ever-changing firm’s environment and competition, company’s competitive advantage might not last long (Lei & Slocum, 2005). Hence, as stated by McGahan & Porter (2003) and Baloch & Inam (2009) firms which seek strategic competitiveness and above average returns in the long run must create strategic fit between the formulation and implementation of its value-creating strategy and learn to exploit the competitive advantage by using instruments of strategic management. Characteristics of the 21st century Based on the article of Hitt, Keats, & DeMarie (1998) the nature of the economy and competitive landscape in the 21st century is rapidly changing. Global economy with blurred boundaries among the industries, hypercompetition, short product life cycles, economic interdependence and dramatic technological changes are significant consequences of the globalization (Ireland & Hitt, 2005). As a result, firms, such as DSF must adapt to the turbulent and highly competitive environment, identify opportunities and threats, be strategically flexible and maintain competitive advantage. DSF has been facing strong competition in the foods market which is dominated by multinationals and only a small share could be captured with Australian-made products.

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Has Dick Smith Foods achieved strategic competitiveness?

Lana Neuwirt 17035913

External environment Key point of implementing firm’s strategic actions for achieving strategic competitiveness is the analysis of the external environment which directly or indirectly affects the company (Hanson, Dowling, Hitt, Ireland, & Hoskisson, 2008). Only with the successfully determined opportunities and threats resulting from environmental change, company’s strategy formulation and implementation actions will lead to strategic goal achievement, high performance and effectiveness (Chattopadhyay, Glick, & Huber, 2001). Firm’s external environment is divided into three dimensions: general, industry, and competitor environment. According to Bourgeois (1980) and Hanson et al. (2008) the segments of the general environment, including demographic or technological influence the industry indirectly. In case of DSF the global and economic segments are of a significant interest. Due to the globalization and escalating of multinational companies Australian-owned companies increasingly face takeovers by foreign firms which result in decreasing number of domestic suppliers left to deliver and manufacture “home-made” products (Walker, 2006). As illustrated by Hawawini, Subramanian, & Verdin (2003), the industry environment which is based on the Porter’s five forces which are industry’s potential entrants, bargaining power of buyers and suppliers, competitors rivalry and existence of substitutes (Porter, 2008) is directly influencing firm’s competitiveness and profitability. For the DSF’s point of view, the most crucial forces might be the degree of rivalry, existence of substitutes and bargaining power of...
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