Cash Connection Essay

Thompson, Arthur A. , Gamble, John E. , & Strickland, A. J. (2006). Strategy: w

Businesses are not only faced with competition within the industry they operate in. They also face competition from businesses in other industries.

Barney, J. (2004). Firm resources and Sustained Competitive Advantage. Strategy: Process Content Context: an international perspective, de Wit & Meyer , 285-292.

A competitive strategy, or business-level strategy, is the way a business used to successfully enter and penetrate into a market (Eastwood et al, 2006), and also, to succeed in this chosen market against its competitors (Johnson et al, 2014). A company needs to develop and apply appropriate strategy to help the company to generate distinctive competences (David, 2007). Compared with the strategies implemented in other levels of operation, competitive strategy is more focused on the competition against other competitors and strategic choices to better attain market share (Harrison and St. John, 2009). According to

Strategy formulation has been acknowledged as one of the most crucial factors of ensuring the long-term growth of the business. However, the manner in which strategy is formulated, and most importantly, the nature of the strategy chosen for the company determines its future position in the marketplace (Grant, 2005).

According to Porter (1985) a company can apply three generic types of strategies to protect itself while competitive force is a key issue of the management. To achieve this position a strategy based on competency must be accomplished

To attain competitive gain, organisations can differentiate their merchandise and services from their competitors they can also choose to lower their costs in order to compete with other contenders. By aiming their produces to a wide-ranging target, they are essentially covering most of the marketplace or if they choose, they can decide to concentrate on a narrower target within the market (Lynch 2003). While doing so may reduce their market range it essentially reduces their other competitors. Porter stated that there are three generic strategies that an organisation can follow to achieve competitive gain over other organisations. These are:

Strategy can be defined as being different from one’s competitors, finding the race to operate and accomplished it. According to Michael Porter (1996), while becoming better at what you do is desirable, it will not benefit you in the long run because it is something other competitors can also do. Strategies for organizations are originally developed by Michael E. Porter in 1979 by introducing the five forces model. A company can identify the industry profitability and attractiveness by analyzing the five forces of Porter (Johnson et al., 2008). And then a reasonable strategy can be set up in line with the strengths and the weakness of an organization is able to create a plan for a stronger position for the organization within its

Competitive strategy is the moves and methods that the firm has taken and is taking to appeal buyers, improve its market position, and to endure competitive pressures. The strategy is about what a firm’s capability to try to knock off competitors and attain competitive advantage, which can be offensive or defensive. There are three approaches to competitive strategy, which are low-cost leadership strategy where struggling to be the overall low-cost manufacturer in the in industry. Moreover, pursuing to distinguish one’s product offering from competitors (differentiation strategy), and the last one is focus or niche strategy where aiming on thin portion of the market rather than the whole market (Porter, 1998).

Chapter Five describes the five basic competitive strategy options – which of the five to employ is a company’s first and foremost choice in crafting overall strategy and beginning its quest for competitive advantage.

“Competitive strategy involves positioning a business to maximize the value of the capabilities that distinguish it from its competitor’s” (Porter 1980:47). A successful business plan requires first and foremost the formation of an appropriate strategy. Through the implementation of a suitable strategy, the company is able to obtain its own industry niche and gain an understanding of its customers (Porter 1985). Whichever strategy is adopted it must be adequately integrated within the firms goals and missions to achieve a competitive advantage (Parker and Helms 1992).

The management of cash is essential to the survival of any organization. Managing an organization’s financial operation requires knowledge of the economy and ways to maximize revenue. For any organization to operate on a daily basis adequate cash flow is required. Without cash management the organization will be unable to function because there is no cash readily available in case of inconsistencies in the market. Cash is also needed to keep the cycle of the company’s operations going.

1) Barney, J., (1991). Firm Resources and Sustained Competitive Advantage, Journal of Management, vol. 17 (1991), no. 1, pp. 99–120.

Porter’s generic strategies describe how a company attains competitive advantage across its chosen market scope. There are three generic strategies-cost leadership, differentiation and

Threat of substitutes: A substitute to the services of the industry would be that the customer organization employ & train the in house staff to come up with such services. The company may rely on the existing staff but market players provide advantage by releasing the core employees from doing non-administrative processes. In all there is a weak threat of substitutes in the industry (Datamonitor,2011).