Essay on Suitability of Integrated Cost and Differentiation Competitive Strategy

The adoption of an integrated cost and differentiation strategy has raised important concerns in the present business environment. Some believe that it can lead firms to realize increased competitive advantages while others argue that it might result in devastating effects on a company. Experts argue that it is essential to pursue the earlier generic strategies separately and in a mutually exclusive manner. Any organization type that aims at realizing effective cost leadership portrays distinct traits while emphasizing on unique capabilities. Trying to undertake the two tasks leads a group incapable of achieving the two since it ends up being stuck in the middle (Ireland, et al., 2012). Concerning the general strategies by Porter, they serve as specialized strategic alternatives that demand absolute focus to support in their realization. Failure to lay emphasis on the issue leads other rivals to take advantage. Nevertheless, and mostly because of the growing sophistication in the ways that clients demand differentiated goods at reduced prices, firms seem to be adopting a more complex generic response that aims to realize benefits from merging the two general approaches (Hitt, et al., 2016). As such, a need for an additional strategy, the integrative cost-leadership, as well as differentiation tactic becomes apparent.

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Concerning the new strategy, it might adopt two primary forms. Firstly, the integrated approach would provide customers with the opportunity for attaining a differentiated product given as reduced prices emphasizing on sustaining low costs. For instance, the activities by T.K. Maxx, which operates as a discount retail establishment, regularly stocks various designers labels, although it manages to sell them at low prices. It manages this because it manages its costs efficiently, hence a low-cost differentiation (Unit1, n.d). By contrast, the option becomes available for firms to focus on differentiating products that result from low-cost processes. For example, in the case of McDonalds, it follows this integrated approach type (Unit1, n.d). The products by the company, including fast-food meals, follow a low price that characterizes the entire cost-leadership tactic. However, the company's products are considerably differentiated from the products that rivals offer through developing various methods, including image licensing practices, branding, and other tactics. Such kind of an option is referred to as "differentiated low cost (Baroto, et al., 2012).

The interpretations in this sense reveal that if a highly competitive setting does not exist, T.K. Maxx will target a differentiation strategy whereas McDonald's would follow a cost-leadership tactic. The rivalry that prevails in the marketplace forces the firms to follow an integrated path, while to a particular degree compromising the purity' of the techniques they develop. In doing so, the companies end up undermining the foundation that characterizes their competitive advantage. However, questions arise as to whether the interpretation is right. It has gained acceptance because it allows individuals to lay emphasis on additional explanation concerning the integrated strategic mechanism (Unit1, n.d).

From this perspective, it becomes apparent that the growing sophistication of the diverse, competitive settings has led to the emergence of business approaches that focus on differentiating services or products simultaneously in the same manner as low costs. In ensuring that the strategy emerges successful, the contemporary approach that targets both cost advantages and differentiation should be managed in a stable manner (Hitt, et al., 2016). The reason for this is that the approach hinders organization from realizing the benefits of emerging as either a powerful differentiator or a low-cost firm. Rather a company aims at implementing the two methods, although the process is challenging. Adopting the two mechanisms targets the capacity of an organization to institute capabilities in the diverse activities it undertakes. However, it should be characterized by a stable, supportive, as well as multifaceted culture to realize the objective (Ireland, et al., 2012).

Concerning the case of Southwest Airlines, which serves as a low-fare carrier within the U.S., it is regarded as one of the major firms that follow an integrated approach. The company is an example of that it has developed a low-fare business model within the industry, which many companies duplicate in different parts of the world. The firm also follows a cost-leadership tactic. Regarding the cost leadership by Southwest Airlines, it revolves around several approaches. Firstly, the organization provides limited services to passengers, such as no seat assignments and lack of onboard food service Secondly, the company gate, ground, and check-in crew is highly productive and trained to multi-task. Thirdly, the company utilizes its aircraft highly while its turnaround times are rapid. Fourthly, it uses secondary as well as cheaper airports. Fifthly, the organization employs similar aircraft to reduce costs of maintenance and training (Unit1, n.d).

Concerning the case of Southwest Airlines, however, questions arise as to how the organization manages to differentiate its operations. For instance, Southwest Airlines does not apply most of the real differentiation tactics. The firm manages to separate itself from the organizational culture area, such as in the low-fare and full-service sectors. The reputation of the company is to lay emphasis on the needs of its clients as well as develop an attractive and fun environment for its customers. The flight attendants usually sing to the customers during flights, an act that motivates the staff while amusing the passengers, hence leading the company to be distinct. Since the company manages to combine low fares with high levels of service, it manages to develop a unique competitive advantage basis (Unit1, n.d).

Supporting the capacity to integrate the two major generic competitive strategy forces reflects an abandonment of the generic competitive strategy that Porter portrays in the original analysis. It supported the notion that companies should utilize a single approach strongly. Otherwise, they would remain stuck in the middle. In the perspective of Porter, he argued that a firm that is stuck in the middle ends up realizing reduced profitability while it lacks adequate preparations to allow it to compete effectively with companies that adopt a single strategy (Ireland, et al., 2012). Porter stipulated that each plan needs different operational emphasis as well as supporting cultures. For instance, by pursuing a cost-leadership tactic, a company should feature a cost-driven culture. Regarding a differentiation mechanism, the culture of a company should be driven by marketing and quality (Hitt, et al., 2016). In the perspective of Porter, he perceived stuck in the middle as depicting weak culture within an organization, lack of direction, as well as poor leadership. For such kind of an organization, Porter stipulated that it would not succeed during the long run while it would be required to adopt actions that allow it follow the general strategies to survive the long term. Additionally, he cautioned that in the case of the companies that refrain from taking an overall differentiation to cost-leadership strategy, or vice versa, or those that target following several approaches, they would end up being stuck in the middle (Baroto, et al., 2012).

Adopting an integrated strategy is challenging as well as ambitious. Nevertheless, a considerable number of firms presently stipulate that the strength associated with the competition prevailing in the markets offer them minimal or little alternatives, hence encouraging them to try out other strategies (Unit1, n.d). They have failed to realize the benefits they anticipate just by adopting the simple generic strategies, thereby encouraging them to seem other tactics that would lead them to grow their competitive advantages and excel in the presently competitive business landscape (Baroto, et al., 2012).

Irrespective of the criticism raised by Porter, therefore, a considerable number of companies appear to be realizing competitive advantages by pursuing an integrated approach. In this sense, it seems that notion of pursuing an individual approach fails to dictate the benefits that an organization would realize. The process of adopting the different generic methods demands significant judgment, application, meticulous attention, and continual monitoring to succeed. They should also be ideal for the context as well as the environment that an organization is undertaking its operations. This case is truer in the event of an integrated approach as opposed to that of the simple generic strategies (Baroto, et al., 2012).

For example, individual firms appear to succeed when they pursue integrated strategies whereas others are driven by the simple generic strategies. In this perspective, therefore, it is ideal to note that although individual firms fail to realize benefits through the integrated approach, others witness increased benefits. Therefore, the success or failure of adopting an integrated cost and differentiation competitive leadership is dependent on the capacity of a firm to deploy it successfully (Ireland, et al., 2012). As such, organizations should try out clear strategies they deem appropriate for driving their successes rather than dwelling on the simple generic strategies, which might hinder their resourcefulness and creativity.

Part 2: Comparing and Contrasting Strengths and Weaknesses of two Strategic Decision Making Models

The rational and the political decision-making models serve as major strategic decision-making frameworks. Understanding their strengths and weaknesses would play a critical role in understanding which model is ideal for a given situation. To begin with, the rational strategic decision model revolves around the capacity of leaders in analyzing a particular situation is a disproportionate manner. The major area of emphasis revolves around the principle whereby a rational decision is practical as opposed to failing to meet the standard. Sound decisions are better, desirable, and more efficient as opposed to wrong ones (Unit2, n.d). Irrationality entails the decisions individuals make instantaneously mostly out of emotions as opposed to sober judgment. As such, the notion appears appealing, since rational decision results to well-considered and well-reasoned choices, which people perceive as ideal in the decision-making process. It becomes perfect in cases where the outcomes of the decisions might be immense, such as it is the case with an acquisition or a merger (Eisenhardt, 1999). However, questions arise as to whether the decisions that people make is the ideal one. Many opt for making decisions guided by individual elements of rationality, although they might follow other motivations, such as instinct and emotion. Rationality might become apparent in the case of the decisions that strategists make rather the ones that individuals make. However, this might not always be the case. As such, it is essential to emphasize on whether a rational model would be ideal in describing a strategic decision accurately (Papadakis & Barwise, 2012). Also, individuals should consider whether it is essential to find the irrationality element' during the decision-making process (Sykianakis, 2012).

Concerning the classical strategy model, the adherents support the notion that rational decisions are usually made in the perspective of economic logic. This view still has a significant influence on the practicing and teaching the strategy. However, managers ne...