Implementation of Strategic Management to Develop Business Is as According to Company Competence

Topics: Strategic management, Strategy, Major appliance Pages: 9 (2543 words) Published: April 20, 2013
Implementation of strategic management to develop business is as according to company competence By Eko Setiyo Utomo

In competitive business, company needs a mature planning. This planning is not only oriented at the future but also should be able to anticipate the change in short and middle range by holistic planning. Porter (Dobson and Starkey 1993:55) stated that generic competitive strategies would create competitive advantage management. Therefore, understanding strategic management steps is needed to create mature planning for the future of company. This paper will try to give descriptions that strategic management or strategic planning need to develop businesses. For years, organizational experts and strategists have debated, who in fact must hold responsibility to design company strategy? Initially, this duty is charged upon all finance managers. David (1989:7) has opinion: “Strategists are the individuals in an organization who are most responsible for the success or failure of that organization”. Business in the future is a function of business in the past, so planning is a function of expenditure last year. However, business should not just be concerned about its past function but also its future. Therefore, equipment owned by finance managers is not enough to indicate what is happening with a real business. These days, each company has to be careful in identifying business growth in its own sector. As Brown (1996:10) argues: “The firm’s core competence or distinctive capability can bring rapid new product development, low cost production (not dependent on large volume), and assured reliability of delivery and improved delivery speed”. Every company must not only claim to understand in depth its industrial character but it also has to be clever enough to calculate trends in its future and to know requirements needed to continually succeed in aiming at that business objective in the long term. The effort to create a situation well adapted to the external environment is strategic planning (SANNO 1988:29). Without that, effort to continue to survive in a competitive arena is only a fantasy. As everyone knows, the level of business competition, at the present, is so high and so quickly changes so that it is a needed ability of all entrepreneurs involved to be careful and adaptive in developing strategies (Forster and Browne 1996). Some companies following are examples of multi national private corporations that have succeeded in implementing their strategic management for business development.

1. Whirlpool Corporation

In 1995, Whirlpool Corporation was the world’s leading producer and marketer of major home appliances. The company had manufacturing plants in 12 countries and marketed products in over 120 countries (Thompson and Strickland 1998:728). Since 1988, Whirlpool Company has boosted up its strategy to business globalize equipments and to lead the industry’s transformation from a national market collection and national competitor to a global market with global competitor. Whirlpool’s strategic approach quickly evolved into one of not only participating in the industry’s globalization but also leading.

Whirlpool’s strategy in North America

Whirlpool, to put itself in position to offer consumers a wide selection of brand name appliances at various price, made four acquisitions in the late 1980s: ➢ KitchenAid, a high end manufacturer of dishwashers and food mixers. ➢ Roper, a maker of low-end appliances and one of Sears’s suppliers of Kenmore brand appliances. ➢ Inglis, the leading Canadian appliance maker.

➢ A 49 percent ownership stake in Vitromatic, the second largest appliance maker in Mexico.

These companies consolidated under a single unit, the North American Appliance Group (NAAG). The objective was to create “dominant consumer franchise” in home appliances such that consumers would insist on Whirlpool’s...
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