Introduction

In strategic management, corporate level strategy is defined as the strategy that exists at the top most level of organizational hierarchy  (Feldman, 2020). With the presence of a proper corporate level strategy, an organization can explore its corporate goals and directions to determine the pathways of achieving success. This assignment focuses on developing the corporate level strategy of Nippn for the next 10 years of the time period. The report will focus on incorporating different theoretical models and framework to develop the corporate strategy of Nippn. The major focus of the assignment will be given to analyze the existing business situation of Nippn. The theoretical models like resource based view, porter’s value chain analysis, and VRIO analysis will be performed.

Critical assessment of competitive advantage of Nippn

In order to explore the available resources in the business of Nippn, the study will consider the resource based view. It is a strategic framework that helps in analyzing the available resources of a company. With the determination of strategic resources, a company can exploit the options for sustainable competitive advantage. The resource based view framework has two major dimensions which are tangible and intangible resources. These two dimensions of the model are also considered for two major characteristics which include immobile and heterogeneous. Applying the resource based view on Nippn, it is understood that the manufacturing units, as well as equipment available in the company, are examples of tangible resources (Bromiley & Rau, 2016). In simpler words, the infrastructure of Nippn is the representation of tangible resources. On the other hand, the research and development department of the company, as well as employees, are considerable as intangible resources. The brand reputation or the company’s business operation for more than 125 years is also the representation of intangible resources. Considering the tangible resources, it can be said that the resources are immobile as those cannot be moved as the company holds ownership of the tangible resources. Whereas, the presence of both tangible and intangible resources in the company represents the heterogeneous characteristics of the organization’s resources.

Figure 1: Porter’s Value Chain Analysis Source:  (Flanagan, et al., 2017)

Following the analysis of resources, it is important to analyze the capabilities of the company. Porter’s value chain analysis is a model that can be considered for the analysis of organizational capabilities. The framework has two major dimensions which are primary and support activities  (Koc & Bozdag, 2017). The primary activities in organizations are supported by the support activities. The first element of the model is inbound logistics which is strongly present in the company. Nippn controls its inbound logistics with the help of Nippon Express that is a subsidiary business of Nippn  (Nipponexpress, 2021). Not only inbound logistics, but the outbound logistics of the company is also controlled by Nippon Express. It helps the company to procure raw materials and supply the products to reach the end customers. Along with procurement, storage of products also becomes easier for the company as they have a present internal logistics network. Considering operation dimension, it can be said that the company’s strong capabilities of manufacturing unit help in producing products at the large number and good quality. The marketing and sales of the company are dependent on the use of both traditional and digital tools. The organization has the presence of a separate department that controls and manages marketing and sales. The service of Nippn involves the solutions to the problems faced by the customers. The organization is directly not involved in providing services to the customers rather it solves the issues through the mediators. On the other hand, the manufacturing units of the company including the flour mills represent the firm infrastructure  (Nippn, 2021). The human resource management of the company is also considered as superior as the company focuses on fulfilling the needs of employees as well as recruitment of efficient staff. The company has also rebranded itself in recent years with the investment and focus on technology. The R&D department of the company is an example of technological impact on the organization  (Nippn, 2021). The procurement of raw materials by Nippn is also considered as strong capability. This is because the company procures products by assessing and collaborating with the stakeholders.

Figure 2: VRIO Analysis Source:  (Das, 2016)

For assessing the level of sustainable competitive advantage, the VRIO analysis can be used. VRIO stands for valuable, rare, inimitable, and organized. The manufacturing units and R&D activities of the company are considered valuable resources. Whereas, the organization has the presence of Nippon Express as its own logistics partner that is a rare resource. The brand value of Nippn is quite high as the company is operating the business for more than 125 years. It is an example of inimitable resources in Nippn (Das, 2016). Following the rebranding, Nippn is following proper and systematic procedures to produce products and sell to the customers which shows the organized resources and capabilities of the company. These factors explored through the VRIO analysis represent the existence of a sustainable competitive advantage in the business. The reason for sustainable competitive advantage for the company is the presence of unique resources and capabilities, systematic business activities, and brand reputation of operating for more than 125 years (Nippn, 2021). The analysis also explores the issues that exist in the business of Nippn. The major issues in the business of Nippn involve the lack of proper quality assessment of products and lack of intention to introduce new products. Based on the issues and available resources and capabilities, it can be said that Nippn has the scope of developing the business by focusing on the introduction of new products in different categories and assessment of product quality. Further, the organization needs to focus on marketing activities for improving the reachability of the business.

Prioritization of the issues

The analysis of resources and capabilities, as well as the competitive advantage of the company, have shown the areas where the organization requires to focus on the development of business. The identified issues in the business are a lack of quality assessment of products and a limited amount of food products. In order to focus on the area and develop the business, Nippn requires to capture its strengths and use the available resources. Based on the two major issues and considering the opportunities, the corporate level strategy of the company is to be developed  (Rugman & Verbeke, 2017). The three options to consider under the corporate level strategy of the company includes proper assessment of products quality, improvement of marketing strategies, and development of new products. The strategic options are needed to consider by the organization in its upper level of hierarchy. The employees and stakeholders of the business are also required to be involved in the organization’s strategic development. The first option to consider in the business of Nippn is the quality assessment. It needs to be executed by the company through the development of a proper procedure for the evaluation of quality. For example, the company needs to evaluate the raw materials as well as final products as a part of product quality assessment. With the assessment of product quality, Nippn will be able to eliminate the products which have a fault. Further, the company will be able to ensure the sales of good quality products to the customers which can help in improving the level of customer satisfaction for the organization. In the process of quality assessment, the organization also needs to evaluate the suppliers and the process they followed to procure and supply the raw materials. With such an option, Nippn can select the suppliers with better quality of raw materials and operate the business by contracting with them.

The introduction of new products is also a strategic option that Nippn requires to consider in its business. The organization is operating in the market of Japan for a long time period. Over the years, the variety of products was limited in the company. This is why the company requires to innovate and introduce new products in the market which can help the company to increase the market share of food businesses. Although, the organization tends to diversify its products for selling into different countries. However, the organization requires to focus on the availability of products at a large scale in every country where it operates. In simpler words, Nippn needs to increase the availability of the type of products in every market. The R&D department of the company empowers to introduce new products (Nippn, 2021). With the help of R&D, the organization can conduct tests to introduce new products and fulfill the demand of customers. It will help the company to increase its sales and profit. Another proposed option in the business of Nippn is to focus on marketing activities. Currently, the organization mainly depends on the use of traditional marketing on large scale. The organization uses traditional platforms like newspapers, food magazines and television for the promotion of its products. Although, the organization has a very minimal presence in the digital platform. Thus, the organization requires to focus on major uses of social media platforms which can help it to reach customers at a large scale. The reachability of customers on social media platforms is quite high. This is the reason to consider the platform for marketing activities that can help Nippn to increase its sales volume. Along with this, social media platform is also considerable for their cost effectiveness which can help the company to save financial investment for marketing purposes.

The developed strategic options in Nippn can be evaluated by using the RACES framework of corporate strategy. Resources, acceptable, consistent, effective, and sustainable are the abbreviation of RACES (Feldman, 2020). Considering the first element of the RACES framework, it can be said that the company has a presence and stronghold over the required resources to execute the strategic options. For example, the R&D department of the company can help in the development of new products to enter the market. Further, the availability of various suppliers also empowers the company to assess their quality and select or eliminate. The brand value and presence of the business for more than 125 years also influence the company in using the brand value as an intangible resource to execute the strategies. The strategic option for quality assessment, development of new marketing strategies, and introduction of new products will also be accepted by the stakeholders. This is because the options will help the company in improving profit and customer satisfaction. The mission of the company is aligned and focused on the fulfilment of customer satisfaction which is also the factor behind acceptance of the strategic options. The strategic options are also considered as consistent as all the three strategic options will help the company in improving its profit and customer satisfaction. In simpler words, the strategic options are aligned towards the financial benefit and improvement of customer satisfaction. These are the factors that also support the effectiveness of the business from the planned strategic options. The strategic options will also improve the state of sustainable competitive advantage in the organization. This is because the company can able to increase its market share by increasing the rate of sales and profit.

Defending the proposal and preferred strategic direction

This diagram shows the procedures or steps followed in the development of a strategic proposal for Nippn. The basic process followed in the steps involves the analysis of resources and capabilities of the company and based on the analysis strategic options have been developed  (Ansoff, et al., 2018). The basic of strategic management is to analyze the existing internal business environment of a company. This has been followed by using the resource base view, Porter’s value chain analysis, and VRIO analysis model. With the use of a resource based view, the available resources of the company have been explored. By using the model, both the tangible and intangible resources of the company have been identified. Following this, the capabilities of Nippn have been analyzed by using porter’s value chain analysis model. The capabilities of an organization show the ability of the business to transform the raw materials into products and sell those to the customers. Porter’s value chain analysis includes both the primary and support activities existing in organizations. Using the model, it has become easier to assess the logistics, operation, and marketing activities of the company. These are the major pillars of organizational capabilities which are supported by the activities like infrastructure, human resource management, technological development and procurement. By using the model, the capabilities of Nippn have been easier to explore in the study.

Following the analysis of resources and capabilities, the VRIO analysis model has been applied to assess the level of sustainable competitive advantage in the company. In simpler words, VRIO analysis has helped in understanding the extent to which resources and capabilities support the sustainable competitive advantage of the business  (Lasserre, 2017). Based on the overall analysis, the issues in business have been identified. The issues which are required to be prioritized and solved by the organization have been identified. Based on the analysis, the opportunities in the business of Nippn have also been determined. With the consideration of both issues and opportunities, the strategic options for the company have been developed in the strategic proposal. Based on the analysis, the assessment of product quality, the introduction of new products and the development of new marketing strategies have been identified. These have been considered and proposed for the business of Nippn. The strategies have been developed for the company as they can help them in improving customer satisfaction and increase the sales volume of its products. With the introduction of new products and a major focus on marketing using the digital platform, the organization will be able to operate the business for the next 10 years of the time period.

Major basis of the strategy is to focus on the development of the organization for the next 10 years period. The suggested strategic options for the organization require to incorporate in the production, R&D, marketing department of the company. A collaborated approach is needed in the organization for implementing the strategic options. The theoretical base of the developed strategic options can be considered under the approach of increasing the production of goods in the same part of supply chain. Nippn’s suggested strategic options are also considered under the horizontal integration as the company requires to focus on the development of business with the consideration of increasing production quantity and quality in same part of supply chain. In consideration to horizontal integration, it can be said that internal expansion or merger and acquisition are the base of the strategy. With horizontal integration, a company can increase own market share in the market. Nippn requires to focus on increasing its internal capabilities by contracting with suppliers of raw material. The company needs to focus on acquiring or contract with most of the suppliers. It would help the company to operate business with most of the suppliers in market and increase own capabilities in the market.

Conclusion

Based on the analysis of Nippn, the main focus has been given to developing a strategic proposal for the company. The organization’s major resources and capabilities existed in terms of the brand value, R&D activities, and manufacturing units. Presence of Nippn in the market for more than 125 years and availability of technology has empowered the organization to become well capable of resources and capabilities. However, the organization’s business lacks due to the availability of certain specific products and lack of quality assessment of products. Although, the resources and capabilities of Nippn empower the company to focus on the improvement of the business. Considering the factor, the organization requires to focus on the introduction of new products, quality assessment of products, and development of marketing strategies.

References

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