Introduction

Strategy is the matchibetweenia company’s internaliresources and capabilities with

the marketiopportunities and risksicreated by the external environment (Porter, 1980).
Furthermore, Grant (1991) highlighted that the internal resources and capabilities provides
the basiciorientation for a company’s strategyiand they are theiprimaryisource ofiprofit for
the firm. To compete in a competitive market, company must achieveicompetitive advantage
by using its internal resource into new marketiopportunities in the most efficient way. The
real sourcesiof competitiveiadvantage lies inithe company’s ability to integrate the whole
organisation’s technologies and skills into competencies thatiempower individualibusinesses
to adaptirapidly to theichanging environments (Prahalad and Hamel, 1990). The combination
of research and development, technological expertise, reliable suppliers, marketing skills and
excellent customer service allowed Apple to be responsive to changes, and produce
innovativeitechnological devices that gives them competitive edge in the market.

The Importance of Developing Business Strategy

The first importance is for business to always be responsive and to efficiently us the
resources to adapt to the changes in the environment. Responding toithe trends or changes
that areigoing to affectithe business and continuously using its resources to produceirapid
productiinnovation can help the organisation to achieve significanticompetitive advantage
and to surviveiin the competitive market (Teece, Pisano and Shuen, 1997; Thompson,
Strickland and Gamble, 2007).

Starbucks hasimaintained its competitiveiadvantage by its continuousiproducts

innovation. In 1995, they launchediFrappuccino, a lowifat creamy icedicoffee to caterito the
need forithe diet consciousiyoungipeople and since then their storeitraffic has increasediby 6
percent to 8 percent per year (Dutta and Subhadra, 2006). They noticed the changes of
lifestyle and realized that they can make profit out of this change and came out with their
Frappuccino. They found high-quality sources and trained their baristas on how to perfectly
make the new drink. Not only they respond to the changes, but they also used their supplier

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and human resource to adapt to it effectively and soon the Frappuccino became one of the all-
time favorite drinks in Starbucks.

Another importance of developing strategy for business is to defenditheir position

againsticompetitors in competitiveimarket place (Porter, 1980). In 1999, Starbucksiopened
its first store iniChina, despite knowing well the Chineseicultureiis closelyiassociated with
teaidrinking. Since then, they’ve opened 3000 stores in China (Dwyer, 2017), proving how
successful they were. Four yearsilater, Starbucks hadiregistered all itsimajor trademarksiin
China, such as the Frappuccino, because many Chineseibusinesses had oversteppedilegal
boundsito imitateior followitheir products (Dutta and Subhadra, 2006). The existenceiof
competition has forced Starbucks to thinkistrategically to defenditheir position (Henderson,
1989). Starbucks used the strategiciconflict approach (Shapiro, 1989) whereby organisations
eliminateitheir rivals, one of it is byistrategiciinvestment in intangibleiassets. Starbucks has
registered all its trademark to each country they’re expanding in, as a way to best-defendi
itselfifromithe competitors. Starbucks filledia lawsuitiagainst Café De Manila foriusingithe
term “FRAP” becauseiit is theiprefix and theidominantielement of itsiregistereditrademark
“FRAPPUCINNO”iand Starbucks won the case (Federis &Associates Intellectual Property
Firm, 2014). They didn’t only protect their trademarkediproducts from beingimimicked but
also get rid of a competitor and gained competitiveioutcome.

Adapting to the environmental changes and defending the market position are
important objectives. Of developing a business strategy to ensure the company to survival in
the competitive market.

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The Importance of Reviewing Business Strategy

Before executing a strategy, it is very important to review or evaluate whether the

strategyicreated by the company can, in an efficientlyimanner, enable the company to gain
sustainableicompetitive advantage (Ohmae, 1982). Precisely, does the company really has all
the resources needed such as human resource,itechnological expertise, infrastructure, sales
and marketingiknowledge and financial ability, to achieveithe goalsiand sustainable
competitiveiadvantage addressed in the businessistrategy.

Godfrey Hounsfield, a researchiengineer of Electronic Musical Industries (EMI)

inventedithe Computer Axial Tomography (CAT) in 1970. EMI is the recording company of
the famous The Beatles. Soon it became the greatestiadvanceditechnology iniradiology and
gave EMI the competitiveiadvantage in diagnosticiimagining. Entering the newiandialready
fiercelyicompetitiveimedicaliequipmentimarket was airisky andidaunting decision with their
lack of the technological expertise to produce and market the CAT. Nonetheless, they
decided to dive into the new market and by June 1974, EMI has sold 35iscanners in U.S and
the total salesireached £5,076,000i(Bartlett, 1983).

Unfortunately, in early 1975inewicompetitors entered theiU.S market with more

complete and lessiexpensiveiscanners. EMI hadn’t foreseen howiquicklyitheitechnology
could beireplicated andiimprovedion. They were faced with greatidifficulty with keepingiup
with rapidiadvancement along with the lackiofiexpertise and technologicaliresources
compared to giantsiin theimedical electronicsisuch as General Electric (GE). EMI also failed
to graspihow toimarket itsiproducts to radiologistsiand keyiplayers in medicaliimagining
industry. EMI couldn’t handleithe fierce competition ofihigh-performanceimarketing
andisales combinediwith the immenseitechnological resourcesiand decided to exitithe
marketiin 1980 and focused on its core music business (Teece, 1986, Spender, 1995).

EMI should have reviewed its strategy before entering the new market to make sure
that they can keep up with the rapid changes in the market, even though they were the first-
entrant in that field. Having innovative products can give a short period competitive
advantage for EMI but they failed to make it into a dynamic competitive advantage. They
lacked of the other critical complementary assets such as marketing,icompetitive

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manufacturing,idistribution, andiafter sales support that are needed in their strategy (Teece,
1986). Foriinstance, GE was notionlyiable toiimitate the CT innovation from EMI, GE also
had the competitive advantage in the complementary assets, such as marketing. As a giantiin
medicalielectronics, GE has the knowledge on how to approachithe keyiplayers inimedical
industriesias compared to EMI. To to to

However, the strategy of adapting to rapid technological changes doesn’t apply to

every industry in the market. McDonald need technological innovations to make the cooking
and serving time faster. Whereas Apple that needs to adapt to the technological changes
happening in the market to creates its core competitive edge products to be the market leader.

Conclusion conclusion conclusion

To survive in a competitive market, company needs to develop a business strategy to

help them having a plan or how to be responsive and efficiently use its resources to adapt to
the changes in the environment to achieve sustainable competitive advantage. Having a
strategy also enables company to defend its market position and get rid of any competitive
forces. However, reviewing the strategy before executing it can help the firm to realize their
own ability and available resources to achieve their goals defined in the strategy and allowing
them to take necessary steps to ensure they are able to execute the strategy and achieve
competitive advantage. However however however

Word Count: 1,009

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