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Article Review
Article: Song, Michael, Roger J. Calantone, and C. Anthony di Benedetto. "Competitive Forces And Strategic Choice Decisions: An Experimental Investigation In The United States And Japan." Strategic Management Journal 23.10 (2002): 969-978. Business Source Complete. Web. 2 May 2014.
Introduction
Competitive forces model can be defined as a model that is used by managers to illustrate the interaction of some outside influences of an organization. These may include threats and opportunities that may affect an organization’s strategy and its ability to compete with other organizations. In simple terms, competitive forces model is a type of model that is used to describe some of the factors that may influence the competitive position of a company in a market. These may include the bargaining power of buyers, threats posed by new entrants and competition among the existing companies in the industry. This essay will present an article that relates to Competitive forces model.
Summary of the article
The article discuses some of the ways in which managers uses competitive model while addressing external influences in an organization. The key decisions made by managers include leadership and focus towards achieving set goals and objectives. Managers therefore form simple business models as a way of coping with the competitive business environment. In this article, companies in Japan and United States are used to show how strategic decisions are made in order to run the companies successfully. There are a number of competitive forces which include the power of consumers, threats by given substitutes, threats by entry of new firms in the market and the degree of rivalry in the business environment the companies face. Cost leadership strategies are more preferred by Japanese managers unlike American managers. The managers in Japan and America are seen to interact well which promotes sharing of business ideas thus promoting success. There are effects of using competitive forces which are different based on the strategy a manager uses. Cost leadership strategy is preferred in a situation where high buyer and threats of the substitutes are seen to associate in preference for cost leadership which Japanese managers prefer unlike US managers. The article discusses effects of using competitive forces and the decisions strategies made by different managers.
How it related to one of topics above
This article is related to competitive forces model due to the fact that it emphasizes on the reason that makes managers to develop model. It asserts that due to the competitive environment that a company operates in, managers tend to create a model that helps them to cope with environment factors. Additionally, it helps them to make some competitive strategic decisions. This relates to competitive forces model as this model describes some of the factors that may influence the competitive position of a company in a market (Song, et al 669). These may include threats posed by new entrants and rivalry among the existing companies in the industry (Song, et al 669). Thus, the article is related to the topic, as they both tend to talk about same thing.
Why article or topic was chosen
The article was chosen since it shows how competitive forces are used in different companies globally and the effects of managers using them. The strategic choice made by different managers cause effects to the success of the company. Competitive strategies are important in a company since they ensure that managers utilize resources and identify new entries in to the market. This creates a health competitive business environment.
Conclusion with at least two questions
- What is the role of Competitive forces model in an organization?
- How does managers use Competitive forces model to address some of the external influences?
Works Cited
Song, Michael, Roger J. Calantone, and C. Anthony di Benedetto. "Competitive Forces And Strategic Choice Decisions: An Experimental Investigation In The United States And Japan." Strategic Management Journal 23.10 (2002): 969-978. Business Source Complete. Web. 2 May 2014.
