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1. Discuss how your SSM company strategy guides your company in Resource Allocation
The SSM company strategy assists the company in the successful resource allocation in the following way. Firstly, the company tries to determine the most profitable spheres of operations according to the performed market analysis. It presupposes the ability to generate the maximum possible consumer value and high operations’ outcomes in the future. Secondly, the management considers different options of resource allocation that will contribute to achieving the formulated objectives (Maritan & Lee, 2017). For example, in some cases, additional advertising or brand promotion efforts may be required from the company. In other cases, substantial investments are needed for designing a new model and promoting it in the target market. However, the most important aspect is not the absolute amount of funds invested but rather their ability to generate the maximum possible profitability.
Thirdly, the company also adopts a broader view on its resources recognizing the critical role of its workforce and immaterial resources for reaching strategic advantages. It means that all available resources should be assessed from the perspective of generating comparative advantage and positive long-term outcomes. Fourthly, in the modern dynamic business world, there are no predetermined solutions equally applicable to all cases without any exception (Carpenter & Sanders, 2008). Thus, the company tries to closely consider all emerging automobile market trends including the changes in consumer preferences, prices of resources, and technological innovations. All of them impact the regular adjustments made to make the ultimate implementation of the company’s plans more effective and rational. The basic principle is that resources should be allocated to those fields where they can generate the maximum possible financial returns and competitive advantage for the company. If the balance between marginal revenues and costs is achieved, than the total profitability can be effectively maximized. In general, the systematic application of the designed strategy to resource allocation is central for reducing risks to the acceptable level.
2. Discuss the need for your Communicating with Key Stakeholders
It is necessary to establish the effective communication with key stakeholders. It presupposes clarifying their major interests and concerns. As the company has different internal and external stakeholders, their needs are non-identical. However, it is still possible to balance them properly through utilizing the latest technologies and business solutions to the identified issues (Carpenter & Sanders, 2008). In particular, all stakeholders may be interested in achieving the maximum quality of automobiles with complementary services delivered at reasonable prices. It also presupposes the rational organization of the production process with the close control over the average and total costs of production.
Communication with stakeholders allows identifying potential problems at earlier stages. For example, the negative reaction to the new model will indicate the urgent need for making adjustments or reorienting to the new target audience. Moreover, timely adjustments and communication-related expenses are typically much lower compared to the ultimate losses associated with incorrect investments and low sales (Pang et al., 2018). It is reasonable to utilize a variety of communication channels including direct one and social media. The latter is especially popular among the younger generation, and it allows generating the high revenues due to the constant monitoring of people’s responses.
Communication with stakeholders is also important for promoting the company’s brand and reputation. It is evident that customers orient not only to the physical qualities of products provided but also the general climate and values demonstrated by the company. Therefore, those companies that can establish the successful and mutually respectful communication with their customers can generate much higher revenues in the long run (Pang et al., 2018). It is especially important while entering the new market in different regions of the world. Although communication patterns may differ, the need for appreciating the dominant consumer interests and preferences is always highly important.
References
Carpenter, M.A., & Sanders, W.G., (2008). Strategic management: A dynamic perspective. Upper Saddle River, NJ: Pearson Prentice Hall.
Maritan, C. A., & Lee, G. K. (2017). Resource allocation and strategy. Journal of Management, 43(8), 2411-2420.
Pang, A., Shin, W., Lew, Z., & Walther, J. B. (2018). Building relationships through dialogic communication: Organizations, stakeholders, and computer-mediated communication. Journal of Marketing Communications, 24(1), 68-75.
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