Strategic Management and Strategic Competitiveness
BUS 499 Business Administration Capstone
April 18, 2013
STRATEGIC MANAGEMENT AND STRATEGIC COMPETITIVENESS 2
With offices in more than 30 countries, Red Hat, founded in 1993, is the world's leading provider of open source solutions, using a community-powered approach to provide reliable and high-performing technologies ("Red hat company," 2012). The five technologies are cloud, operating system, storage, middleware and virtualization.
Globalization and technology have positively impacted Red Hat. Globalization and technology has allowed Red Hat to expand from their office in Raleigh, North Carolina to over seventy offices in 33 countries all around the world ("Red hat company," 2012). Red Hat has had strong growth over the past ten years. In 2012, it surpassed the billion dollar revenue mark. It is believed that Red Hat accomplished this by delivering a reliable product to its customers. The growth of technology, specifically the Internet, has increased the efficiency and the scale in which Red Hat operates. Other websites and email list are available via the Internet making business developers around the world be able to collaborate with other business developers on various projects. Without this technology, the business leaders and developers would have limited information available to them (Peters, 2012).
Red Hat uses both the industrial organization (I/O) model and the resource-based models in order to earn above-average returns. The I/O model focuses on the outside of the organization and the resource-based model focuses on the inside. On the outside, the I/O model, Red Hat concerns themselves with their competition and what products and services they are offering. Some of their most known competitors are IBM, Novell, Oracle and Microsoft. Some of those competitors, like Oracle and Microsoft, are also partners. These competitors use similar strategies to be successful in their industry. Partnering with your competitors gives you an advantage by making you a stronger presence and increasing your profit within the industry. On STRATEGIC MANAGEMENT AND STRATEGIC COMPETITIVENESS 3 the inside, the resource-based model, Red Hat concerns themselves with the physical, human and organizational resources and their capabilities (Hitt, 2013). Physical resources are things like the equipment used to produce the product Red Hat is selling. Human resources are the talents, knowledge and skills that the employees bring to the company and organizational resources are the finances and patents, like Red Hat’s Unisys LZW compression algorithm patent. Patents are necessary for self-defense in many industries, especially the software industry. That is why Red Hat will continue to patent their works. One of the capabilities of Red Hat is for the human resource, the employee, to complete the task the needs to be accomplished in order to produce and deliver the products.
Red Hat’s mission is “To be the catalyst in communities of customers, contributors, and partners creating better technology the open source way” ("Corporate fact sheet,"). Red Hat is committed to be the leader in providing a way to get information to the world. This is done through software technology. Before the Internet, research was done primarily through books, magazines and word of mouth. Now, many resources, from all over the world, are available with a few key strokes. Red Hat’s commitment to their mission statement will influence the success of the company by making sure they produce a product that is better technology than what others can produce in order for the community to be engaged with people all over the world. One of the most important stakeholders group is...