Elevating Repositioning Costs For Strategy Dynamics

Value chain of Lazard

Discuss about the Elevating Repositioning Costs for Strategy Dynamics.

Strategic management refers to the most appropriate method in which one can apply to the running of an organization. It plays an integral role in the expansion of the company since it forms basis through which one can establish positive or negative returns from the association.

The managerial body should encompass people who are ready to dig deeper into different research platform so as to be exposed to the best measures and approaches to utilize so as to make the most appropriate decision concerning the company. The businesses that their management is inefficient concerning exercising their roles do not withstand the challenges which arise as a result of the existence of competition in the trading world (Baumgartner & Rauter, 2017). Therefore, it is prudent for them to apply different phenomena which have been proven to work in the best way possible for various traders such has the value chain theory by Michael Porter. The theory is rich in fundamental studies on how one can be successful in the administration of an enterprise in this cutthroat business scenario being experienced on earth. Furthermore, the company can be managed in an overt way if at all the planning body has the knowledge concerning the micro and the macro environment affecting the business. This study will enable one to make prudent choices while dealing with various matters related to the administration of the corporation.

Lazada Company applies the Michael Porter’s theory of conceptualization which outlines that the company should ensure their production go in line with the needs of the consumers. According to Michael, the company should make sure that both inbound and outbound logistics of the firm is well organized. For instance, Brenes, Ciravegna & Woodside, (2017) outlines that, Lazada online shop ensures that the products in which they sell are readily available in their stores by the time the consumers make orders. This dynamism eases the manner at which the business is done in their association. Besides, Lazada has very qualified suppliers who are taken into vigorous exercise during the interviews after doing tenders for the providers for the various types of goods in which the company deals with in the industry. They are given a time span in which they can deliver their products with the view of ensuring that the commodities reach the firm as well they should be readily available for the buyers. The value chain of the company is much developed because their advertisement is done in different sites, notably, the Facebook and the various Google sites (Chen, Pan & Ouyang, 2014). It is estimated that this corporation has more than thirteen million followers on Facebook. These numbers of people have developed their way of making purchases by only making a request on the Facebook sites. Therefore, this helps in increasing the revenue for the Lazada. This strategy made by the key stakeholders to the company was withstanding since for one to make good sales on an internet platform (Cui & Pan, 2015). One has to have at least a social media account through which one can interact with their customers.  More so, Porter’s value chain theory which has been applied extensively in this form of endeavor is seen in the manner in which deliveries are made to the buyers.  The business runs twenty-four hours every day and thus the consumers upon making request receive their goods at the time scheduled as per the deal drawn between the parties. The products reach the customers at the right quality, quantity, and shape. Such dimensions have led to an increase in the profits as a result of consumers retained as well as new ones who join the corporation on a daily basis. Likewise, the goods produced by Lazada are branded in such a way that it is appealing to the consumers. Nonetheless, those which are received from the different suppliers are renowned in such as manner that uniformity is obtained.

Lazada key competencies

Business competence, especially in this century where different kinds of activities are being invented as a result of harsh economic times, is very pivotal for one to remain in the market for an extended period. Nevertheless, Lazada has been realized to being quite competent in their endeavors. One of the main features is that; they have a booming business model in which they use in running the activities across the Southeast Asia. Their central point is the unwavering convince in which they provide for their consumers. According to the statistics carried out by Hennart & Slangen, (2015), Lazada is focusing on improving the percentage of the clients in which they make their purchases online to rise 1% to at least 5 % annually. This target has been apprehended after they counter Amazon through minimizing their processing times whereas ensuring maximization of the customer expediency.  The creation of the leverage as improved their strengths to extend of creating eight hundred thousand diverse products in their online souk podium (Johnson, 2014). The increased number of goods and services in the company has led to a massive number of customers who are always interested in making of all their needs from different demands ranging from that of house ware to the fashion under one roof. The perplexing increment in the figure of buyers has led to the development of new energy of providing more products in the industry as per the taste and preference of the consumers.  Consequently, making them gain the ability to be in the market in which they pioneer since the users no longer prefer the competing companies. Likewise, the company provides goods which suites both medium and small income individuals. The consumers are people who have different capabilities in commercial standards. It is important for the business fraternity to provide goods in which the buyers from all social classes can afford. This important aspect of commerce is what is thriving Lazada. According to David, (2016), different people prefer them unlike their rivals since they have a variety of products meant for all levels of individuals in the society such has the children aged and the middle-age people. The matter has enabled it to run with a large number of consumers and thus generating enough revenue to sustain it in the industry as well aiding in the expansion to other countries in the world. Additionally, the company is supported by BOI which is an online promotion investment in Asia. This firm provides non-taxable incentives which operate by providing the skilled labor force and also enables the company to get accessibility to the total foreign ownership in the enterprise (Durand, Grant & Madsen, 2017). This initiative as enabled Lazada to provide quality products as a result of the presence of the skilled personnel unlike their rival corporation like Amazon. Such practices thus have made it to continuously prosper in the market with manageable competition from other firms.

Macro-environmental scan of the new of the company

Macro business environment refers to the forces which affect the company externally, and they have the inability to control. They include economic, Legal, Political, social and technological aspects. These factors have the ability to affect the operations of the business both negatively and positively. The new market in which Lazada should undertake is Indian online sector. The political stability of this country is justifiable, and thus the operations of the Lazada would be harmonious (Menon & Yao, 2017). The government of India has a well laid down security measures, and thus any foreigner with the intention of doing business in the country is guaranteed of their safety. Additionally, the economic system of India is defined. The Lazada Company can make double sales as compared to one in which it used to sell in Southeast Asian countries. The reason is that India is very populated country and thus there is the availability of a large market for the goods and services offered by the group (Rothaermel, 2016). Nevertheless, this population is made up of people who love fashion as one can justify that Indians are fond of wearing beautiful clothes with ornaments of all types. Moreover, the social matter is also an important aspect of the macro-environment. The Indian people in spite of being so religious, they can purchase a broad range of commodities such as mobile phones and kitchen ware and house decors. Therefore, the Lazada group of companies will still work within its rationale in this given country. The legal matters concerning the online business platform are not that strict as compared to the people doing businesses in the shops (Sila, 2015). In fact, the Indian government is encouraging ecommerce businesses, and thus rules and regulations involving carrying out of venture are favorable. This justifies that the Lazada companies can operate at peace in the new location without problems. The technological knowhow is the central point in this form of trade. The country in which one should serve should have a good network connectivity as well people who have mobile phones which are internet accessible. This is not a challenge to India since they are classified as being among the fast growing industrial countries with new technology. For that matter, Lazada should not hesitate in doing commerce in this state.

India is made up of various enterprises that deal with online products. One of these firms is the Amazon whose headquarters is in the United States. It deals with a range of products such as beauty products, house ware, and home decors products. It has been the dominating business in the world as far as online business activities are concerned. Currently, it is struggling to make India its second biggest market in the world apart from the United States. However, its high prices and failure to provide goods and services which cut across people of all economic stands as proved futile since this has become an advantage for the Lazada group of companies and thus offering the best platform in which Lazada can compete and make significant sales as compared to Amazon (Gregory, Ngo & Karavdic, 2017). FleAffair is also another ecommerce based in India. It has been in the operations for more than a decade dealing with electronics and men and women clothing. This company has been experiencing some challenges related to poor management and incompetent workforce. These issues have consistently made it fail and at the moment have proven it cannot manage its operations. The company’s managerial team has been forced to consider the probability of takeover and thus giving an opportunity for the Lazada to enjoy the fruits of their failure (Laufs & Schwens, 2014). To add on that, Ebay is also among the companies controling the Indian ecommerce sector. Like the Amazon, it has been on the market for an extended period, and thus they have a large number of consumers. It is the biggest company though the entry of Lazada may lead to decrease in its number of customers. This company deals with a broad range of products such as mobile phones and tablets, house ware, clothing and medical and pharmaceutical facilities. They sell their products at a relatively higher price, and most do not make prompt deliveries as expected. This problem has slowly led to its slow growth, and thus the chance of being overturned by the entry of Lazada is inevitable. Therefore, Lazada as the opportunity of making itself a giant by competing with such a company since its ability to make prompt deliveries to the consumers is admirable (Trigeorgis & Reuer, 2017). Maintaining of the spirit of ensuring the products reaches the consumers as per the agreed period as was in the Southeast Asia will give this enterprise a chance to secure a place in which it can enjoy a competitive advantage in this hosting nation.

Methods of entry are the various ways in which a company can apply in the event where it wants to extend its operations to another country in the world. There are many methods involved; however, one will delve upon the common ones and more so which applies to our course of study in the case of Lazada Company. These models include; franchising, licensing, joint venture and export mechanisms which are used by various companies in trading in foreign destinations (Elshaer et al., 2016). Franchising is a method through which a company with a little capability of running its business pays a royalty to another company so as to gain the ability of recognition with the trade mark of the purchasing company. The company purchasing trademark will be seen as the mother company since their products are similar in all dimensions. It is an excellent form of doing business; however, it inhibits one from developing into an independent business in the market. On the other hand, Grant, (2016) outlines, licensing is an entry mode in which one undergoes through the rules and regulations of the country in which one desires to operate by conforming to their paper work and so forth. One is entitled to pay taxes and licenses which allow one to carry on with the business (Li, Guo & Xu, 2017).  This type of entry mode is very common.  The joint venture type of entrance manner is also applauded with most of the business organizations (Morris et al., 2015). They consider it very easy only because they enter into a ready market for their goods. The companies dealing with same type business activities mutually make an agreement of becoming one business unit. The law requires the merging companies to sign documents of incorporation to show that they are partners in the given corporation. Lastly, the export form of an entry in another country commercial sector is also pivotal. One receives this kind of acceptability by selling their products to another country and vice versa. It is a common form of business in the world. According to the scrutiny by Leih & Teece, (2014), one can comprehend that the best way in which Lazada can enter into the Indian market is a joint venture. It is prudent for them to approach FleAffair online which is interested in partnering with other company in running the online business due to a massive failure in which it has been experiencing over an extended period. By doing so, they will be assured of the most suitable process for obtaining the consent of trading in India (Martin, 2013). Additionally, the company will only reignite itself by the offering of services in which the FleAffair company had failed and thus an easy way of countering the rivals in Indian online podium as well increasing their sales as a company.

Conclusion

Strategic planning is vital to the success of the enterprise. The Lazada group of companies has proven to be led by the most competent workforce which results from their output and the input in the business. The competitive advantage in which they exhibit in the Asian market is a promising indication that they can succeed elsewhere. The availability of large market in the Southeast Asia has advanced its skills in trade because most the products in which they sale have the designated group of people in the society. For achievement of any online platform, the companies should take the example of the Lazada in the manner in which they reach their clients and so forth.

Online business is one f the flourishing industries in the world today. It is important for the government to allow the amendment of the school curriculum to pave room for the online course so as to increase the number of people entering into this sector. The economic issues affecting the entire world needs extensive research in this field since it has proven to be culpable in the offering of employment to a large number of unemployed youth worldwide (Pereira-Moliner et al.,  2016). Likewise, the state should ensure their countries are well supplied with electricity and network facilities. All the online work uses the presence of handy interface gadgets which cannot be sustained without the use of electricity. Therefore, such measures should be in place. Moreover, the security involving the cybercrime should be peeved up by the different safety agencies so as to avoid fraudulent cases while one carries out their trading activities. Additionally, enterprises should be encouraged to incorporate their existing businesses into online type (Goerzen, Asmussen & Nielsen, 2014). This will lead to an increment in their sales since most of the people are too committed and thus taking up responsibilities of making purchases from the different business outlets is a problem. Such measures will allow for expansion of various companies as well growth in employment opportunities in various fields.

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