Unit 4 Week 4 Discussion 2 Peer Response MBA695

Response Comments - After posting your initial response to the question, begin making comments to your peers. A minimum of two comments made on two different days must be posted in the discussion for a passing grade.  The comments must be early enough before the end of the week to allow for replies. 

John Cone (Student 1)

Class,

For this week's discussion posting, I found an example of an organization using multiple strategies successfully to keep a competitive advantage--AirBnB.  AirBnB offers a differentiation advantage of superior product features over its competition, as well as convenience of use.  We can say the company offers a superior products because it performs a unique job that no others in the accommodation and lodging industry do  (Dyer, Godfrey, Jensen, & Bryce, 2019) by opening up the housing market as a means of temporary lodging solution.  This come with the benefits of tailored quality for user expectations and convenience--users can stay in mansions or choose a more frugal, affordable option often at lower costs than a hotel would offer.  it is also convenient for property owners who get to set their own rules and profits without much intervention (Bashir & Verma, 2016).  One strategy AirBnB lacks is the reputation that the hotel industry has, especially large chain like the Marriott or Hilton.  Prospective customers know that AirBnb apartments lack sufficient license to operate as accommodation activities and the use of the local housing market drives up housing costs, which causes issues with natives to those communities (Aznar, Josep, Segarra, & Claveria, 2018).  In relation to Hales & McIarney course reading, AirBnB has many comparable strategies that have made both companies successful, including a low-cost structure advocating for a "be your own boss" style.  Both companies also take advantage of reduced capital expenditures by not having central administrative tasks like taxi and hotel companies do, as well as not needing to provide insurance for their independent employees (Gareth & McIarney, 2017).

-John Cone

References Aznar, P., Josep, S., Segarra, G., & Claveria, J. (2018). AirBnB Competition and Hotels’ Response:. Athens Journal of Tourism, 7-19. Bashir, M., & Verma, R. (2016). AIRBNB DISRUPTIVE BUSINESS MODEL INNOVATION:. Retrieved from Research Gate: https://www.researchgate.net/profile/Makhmoor-Bashir/publication/306193997_Airbnb_disruptive_business_model_innovation_Assessing_the_impact_on_hotel_industry/links/5b06460ca6fdcc8c2522ac1e/Airbnb-disruptive-business-model-innovation-Assessing-the-impact-o Dyer, J., Godfrey, P., Jensen, R., & Bryce, D. (2019). What is Business Strategy. Retrieved from Strategic Management: Concepts and Cases: https://mbsdirect.vitalsource.com/books/9781119563143 Gareth, H., & McIarney, C. (2017). Uber's Competitive Advantage vis-à-vis Porter's Generic Strategies. IUP Journal of Management Research, 7-22.

Humberto Viramontes (Student 2)

Using an example of a specific organization (not Uber), identify multiple strategies (using terms from the course) that are being used successfully. 

The specific organization I will discuss is the general contractor I use for projects around the house.  El Mercado (the market) is the name of the business in El Paso, TX.  He is very successful and I believe it is because he has combined cost leadership and differentiation.  We found him on Facebook, his reviews and comments from previous customers along with pictures of his work made up our mind to use him.

In the Hales & Mclarney article, they wrote that cost leadership and differentiation are incompatible but that other experts contend that low costs and differentiation could be successfully combined to create synergies to defeat any downsides of the combination (Hales & Mclarney, p.9).  Later in the article, they write that ‘Achieving a strong position in one generic strategy can also lead to improvements in the position of another generic strategy’ (Hales & Mclarney, p.12).  

My contractor’s one generic strategy is that he is really good at general projects.   For projects that are outside of his specialty or are too big, he has specialized contractors that he can join up and still keep the price reasonable.  This is cost leadership.  The differentiation is that he is able to accommodate other requests without a high price and keep the quality.  

What other strategies might that organization use if they need to change or find a “turnaround” strategy to maintain their competitive advantage (consider product or industry diversification, mergers and acquisitions, joint ventures/strategic alliances, and/or a strong differentiation strategy).  

This contractor has successfully allied himself and joined ventures when the need arises.  This provides him with agility and flexibility not afforded to a single contractor.  The strategic alliance is that he promotes other contractors not competing with his specialty, and those contractors in turn are doing the same for his business.  The joint venture happens when both contractors realize they need each other’s expertise/help.  

96% of construction companies fail before being in business for 10 years (Clayson, 2019).  A turnaround strategy would be to develop a social media advertising plan.  Americans using social media for entertainment, news, and to share information is very high, seven in ten (“Social media fact sheet,” 2021), and every platform would need a different approach.  He would need to hire a marketing staff that could manipulate every platform (Facebook, YouTube, Instagram, TikTok, etc…).  For Facebook, the target demographic would be older adults and they can be reached with traditional advertising such as posting pictures of finished projects.  TikTok shows you short videos which depending on your viewing history, will keep the same content flowing.  One can also pick what topics to keep seeing using their algorithm (Newberry, 2022).

Facebook is used by 77% of those aged 30 - 49 and 73% of those 50 to 64 which would be the target demographic for home repairs and remodels (Auxier & Anderson, 2021).  TikTok which is a newer app but more popular with younger Americans can be used to target already wanting to see videos about home repairs and remodeling.  

References

Auxier, B., Anderson, M. (2021). Social media use in 2021. Pew Research Center.org. Retrieved from https://www.pewresearch.org/internet/2021/04/07/social-media-use-in-2021/ (Links to an external site.)

Clayson, K. (2019). Eight reasons why construction companies fail. Projul.com. Retrieved from https://projul.com/blog/8-reasons-why-construction-companies-fail/ (Links to an external site.)

Hales, G., McLarney, C. (2017). Uber’s competitive advantage vis-a-vis Porter’s generic strategies. The IUP Journal of Management Research, Vol XVI, No. 4. 

Newberry, C. (2022). How the TikTok algorithm works in 2022 (and how to work with it). Hoot Suite.com. Retrieved from https://blog.hootsuite.com/tiktok-algorithm/ (Links to an external site.)

Social media fact sheet. (2021). Pew Research Center.org. Retrieved from https://www.pewresearch.org/internet/fact-sheet/social-media/