Dynamics of Strategy
Every organization follows a pattern of strategies, concerned with the adoption of theories and models to improve the operations performance of the organization. The selection of strategies will become their framework to guide the managers and leaders of the organization and enhance its competitive advantage. The selected dynamic strategies are also used to maintain or enrich their market leadership of how well these strengths and capabilities are aligned. Johnson & Johnson continuously enhanced and developed their internal strengths and capabilities that they can use to differentiate the company against the external forces including the competition during their entire course of operations.
Johnson & Johnson is one of the most popular companies in health care and medical products. They believed that their dynamic strategy is also their way to communicate their products to consumers. It is the structure of the company to express the value of their products. They also believe that these strategies should be well presented by their management and employees through written form that distinguishes their difference to other competitors. The model of dynamic strategies should include competitive logic, objectives, and an organizational action plan (Greiner & Cummings, 2009).
A. Strategy Proposal and Logic
The strategic proposition of Johnson & Johnson including the incremental change management impacted a very dynamic organization that continues to gain customers’ high acceptance and employee’s high motivation. From the legacy of James Robert and Edward, the Johnson brothers held a set of credo values that served as their ethical and strategic model in managing the company. This ensures that they are recognized to contribute to the needs and well-being of their stakeholders including healthcare, customers and employees. Any strategy proposed or added to the organization should fall into the following categories:
- Individual impact, that each employee should learn directly the company’s culture to develop their competence.
- Leaders can influence the collective impact through behavioral change
- People should learn to adopt the culture and behavior of their organization
- Cooperation must be developed to establish strong economic impact to achieve the key organizational goals
- The internal strength of the company is through hard work and cooperation; it also strengthens the company’s competitive advantage.
- This should leverage the learnings to improve their leadership skills and competence that should also enhance the performance of the company.
All this strategy set by their founder has significantly impacted dynamic strategy, including price, supply chain, value chain, life cycle and strong brands (Cameron, 2007).
B. Evaluation and Justification of Selected Strategy
Based on the model of management and leadership, Johnson & Johnson is using decentralized management fitted for a huge organization. The report has also presented the following strategies to evaluate the company:
Pestel or External Analysis – Political, Economics, Social, Technology, Environmental and Legal framework, it may be simple but is still widely used. It is still a valuable technique to predict the external forces that will eventually come to every organization. The SWOT analysis is basically important for the company to reflect their strengths and weaknesses and how they can use these to eliminate the threats and take advantage of the opportunities (Reddi, 2009).
Porters Five Forces Analysis – This analysis includes the threats of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threats of substitution and the intensity of rivalry. It helps the company to understand their position and their competitive advantage to the environment especially in introducing new products and avoiding making the wrong move. It helps the company to introduce specific, measurable, achievable, realistic and timely distribution of products, price, promotions and places of distribution which is one of the cornerstones to their success (Turner, 2011).
Key Success Factors – The identification of key success factors is highly important because of the changing patterns of the industry and competition, identifying the key success factor of the organization practically improves the effectiveness of their organization (Clarke, 1999). For instance, some of the key success factors of the company are basically their strong brand reputation, research and development and technology.
Value Chain or Firm’s Infrastructure – This is basically one of the most important factors how the organization is able to provide the best possible offers to customers where every part of the operations are customized, automated or improved to add value. For instance, customers are assured that logistically from suppliers to, production to delivery, Johnson & Johnson products are made and processed for long shelf life for quality and effectiveness (Bititci & Carrie, 1998).
McKinsey’s Model – Also known as the 7s framework - it identifies and finds out whether the strategy, structure, system, shared values, skills, style and staff are working together in harmony to maintain or improve the company’s performance and be able to determine how the new strategies can be implemented successfully.
Generic Strategy – This measure can be applied to products and services to choose whether to expand the market using cost leadership with no frills or offering basic products at a considerable price, or differentiation strategy to offer high margin to highly position their brands with the added incentives or unique features that can be found in their products (Kim & Nam, 2004).
Value-Based Resource – This is basically a very important strategy that suggests to the company to offer valuable, inimitable, rare and non-substitutable products and services to differentiate the company from the rest of the competition. It suggested offering extended value bundles for the customers’ benefit, whether tangible or intangible to sustain the customer’s preference for the brand because of its added value (Skilton, 2014).
BCG Matrix – The BCG matrix provides the standing of a product. It recognizes the standing or lifespan to understand the maturity and growth. It should alarm the organization how the product can be protected from its sudden decline or how the new product can be pushed or maintain its position.
C. Brief Discussion of Rejected Options
There are also dynamic strategies that are not necessarily included such as the Ansoff Matrix which is a redundancy of the generic strategy, although they have slight difference in terms of strategic options. But they can be used interchangeably to have the same logic which is to enhance the offer, penetrate the market and gain leadership (Best, 2008). The Competitors Analysis and Customers Analysis including the Internal Analysis is basically almost a redundancy of Porter’s Five Forces Analysis and the SWOT analysis.
Rejecting some of the redundant options should simplify the flow and remove the confusing strategy to formulate dynamic strategies that have been selected. It is not always that these strategies are appropriate to the current conditions and situations. Some strategies are simply not fitted to use. For instance, when the company is faced with a customer’s problem, the BCG matrix is not very useful. Therefore, it is the identification of the most useful strategies that should be selected at the right place at the right time.
D. Statement of Main Strategy Objectives
Johnson & Johnson’s Credo Values are responsible for healthcare, the employee’s customers and the communities to provide the best products at a reasonable price for fair value and profit for the consideration of their stakeholders (Jnj.com, 2015). Johnson & Johnson’s vision is to maximize and sustain their power and competitive advantages globally. It is also their mission to accelerate growth in the workplace, develop high performance employees, work with business leaders to maximize opportunities and partner with different organizations externally. With the help of the selected strategies and their strong management skills, the company can expand fully according to their values, mission and vision.
E. Formulation of Specific Plan for Implementation
To specifically plan the dynamic strategy selected and be able to complete the implementation, it is highly recommended to follow the six step-by-step processes to complete the plans. The CDC recommends the 6-step approach health program suited for the company. They should prepare, assess, create, communicate, implement and evaluate the implemented plans for readjustment (Cdc.gov, 2008).
Step 1: To prepare is to specify all the possible strategies, the purpose of the strategy and its uses as shown above, be able to determine its importance and when it should be used, they can prepare a timeline or Gantt chart its development.
Step 2: To assess is to review or analyze the effectiveness of the chosen strategies and trim down what is important or what should be eliminated, such as the SWOT analysis and the Pest Analysis, among others. Should they be included or should they be removed according to the needs of the company?
Step 3: To create is to develop or pick up the specific strategies needed and write it down in a Gantt chart to explain the details and time frame according to priorities of the strategy or programs chosen. Would it be a three-year plan or a five-year plan? This should shape the body of the program logic and the primary effectiveness of the plan.
Step 4: To communicate is to disseminate and share the information about the strategic plan, most importantly the message, why and how the plan has been developed and what are the expected forecasts. This can be done yearly as needed while recommendation from stakeholders is also important to consider a cooperative agreement for changes and implementation.
Step 5: To implement is to put the accepted plans into action which is now made Specific, Measurable, Attainable, Realistic and Timely (SMART) the product of the specific plan is the reflection of the achievement of the activities as specified.
Step 6: Finally, after a year or six months of implementation of the plan, they should be able to evaluate the effectiveness of the plans by comparing the previous strategies to the current and be able to evaluate or compare the difference if the company is progressing based on the evaluation and findings. This should critically define the effectiveness of the plan if this should be maintained, change or re-established.
F. Resource Allocation and Budgeting (Financial Implications)
Changes in strategies will require budget allocation; the company can provide fundings for research and strategic development, especially because of the importance of the study conducted for the company benefit. Evidently, the company is providing social services, global funding, disease prevention, health care, budget for caring, nurse, babies and the selected communities as part of their credo; they can also provide budget allocated for this program which is also essential for their benefit. Alternatively the researcher or program developer will have to seek angel investors or sponsorship to the company to prove the effectiveness of their plans (Jnj, 2015). This should not impact a strong financial implication by applying trial and error and strong monitoring to minimize risks and maximize its effectiveness.
G. Monitoring and Control Process
Monitoring and controlling the effectiveness of the new strategy can be a daunting task. There should be an established group that will handle the overall course of action. A monitoring team member that is held accountable shall record, evaluate and monitor the effectiveness of the ongoing process as it cycles or moves especially the implementing rules and the activities as they progress. The significant resources and fundings should be systematically allocated according to plan which is basically the most important part of its primary implementation. The group shall also monitor the movement if it is aligned according to objectives to make the implementation easier to manage, identify key issues or errors, processes and final outcomes.
The development of a dynamic strategy and choosing the framework for the success of the company should be a proactive approach because of the frequent changes in the industry and to answer the market needs to be able to maintain the market leadership and popularity of the company. Although there are several factors that need to be considered, including the internal and external factors, market forces, values, key success indicators, competition and other factors in choosing different strategies and value chain.
These strategies should be carefully selected for cost-effectiveness and measures. There are also strategies that are conflicting while some may be redundant. The best strategies that should be selected should also be based according to the needs and effectiveness of the company and not just according to the popularity and experience of the most successful companies and organizations that recommend these strategies.
There are also new frameworks and strategies that are worth considering, although the development of dynamic strategies can only be proven through the actual implementation. But it should be calculated to eliminate the financial risk while looking forward to cost-effectiveness of the result to prove that the strategy is worth adopting. Dynamic strategies should be carefully selected or constructed and it should be revised regularly if it is to be aligned to the industry and highly applicable to the current trend.
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Bititci, U. & Carrie, A. (1998) Strategic Management of the Manufacturing Value Chain, USA: Kluwer Academic Publisher, pp 345-346
Cameron, C. (2007) Johnson & Johnson Canada's Design, Development and Business Impact of a Local Leadership Development Program, Organization Development Journal, Vol.25 No.2, pp 65-75
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