Strategy and Transformation

maintain that value advantage over a long period of time it ensures longer economic benefits.1 A strategy also gives an organization a structure for allocating resources, no company has unlimited resources, to utilize them properly there has to be a clear understanding of what is more important so that even the smallest of investment in the right thing results in a gain to the company. A strategy, if clearly understood at every level in an organization, helps the people of that company to stay focused on the goals and helps them in making better decisions for the company. Today companies built various strategies to help them grow and gain an edge over their competitors. Many companies today transform their organizations, through proper strategies, to obtain huge benefits from small changes and efforts.2
Joint Ventures and Foreign Direct investments are two types of strategies that are widely being used in the world today. These have proved very fruitful for certain organizations. Especially consumer good industry and technology industry has used it a lot.
Joint Venture
A joint venture means that two or more organizations form a contract or an agreement to dedicate their resources to work together for a common goal.3This generally happens when both the organizations think they can compliment each other and together produce greater results for a common goal. The corporations have seen many joint ventures. A big joint venture of today is Sony Ericsson.
Sony Ericsson is a 50:50 joint venture formed between Sony, (a multinational conglomerate corporation) and Ericsson, (a provider of telecommunication and data communication) in October 2001 to work in the field of telecommunications.4 They joined hands to make mobile phones. Both were making mobile phones separately before…
Sony Ericsson and General Motors have chosen strategies very well to suit themselves. Both companies have established a good name for them self and earn profits accordingly. Sony Ericsson made a wise decision in 2001 to combine their strengths when Sony had a wafer thin share in the market of mobile phones and Ericsson was in trouble because its supplier had delayed indefinitely and it needed to do something about it. If this timely decision was not taken it may have forced both these companies to vanish from the mobile phone industry. Today this joint venture is a fierce competitor and is striving to be the best. It still is not definitely in the top three but if it stays positive it will definitely be able to be in the top 3.
General Motors uses Foreign Direct Investments very wisely. It tries to get a subsidiary wholly or partially in areas where its customer base is wide and it has a good market. This way it stays close to its market and learns about its demographics very well and gets to know the requirements of the market. It also makes sure that it advertises and promotes its products in line with the culture of its market. This helps them do a better job at selling their products to the local people and earn a better margin of profits.
It strategies are used properly profits can be maximized and companies can do better investments and decision making.