Strategic Management

Case Study One

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Baidus SWOT Analysis

Baidu takes advantage of the fact that China is highly populated. Consequently, it gives the company a ready market. It has successful operations in bidding processes. It is able to keep up with the trend and meet customers needs. It has a strong psychological sense of its competitors. Accordingly, it gives a competitive edge over search engines like Google, its main competitor. They are always on the right and proper track. Their major weakness is a shortage of technology, at least as compared to Google and Yahoo; both of them invest in massive and update technology. Baidu makes lots of profit in bidding. Therefore, Baidu localizes its technology. This possesses a threat to the company. They have a marketing budget shortage. It faces competition from small and medium companies that integrate value-added products into their products. Baidu has strong marketing and, as a result, achieve higher returns on investments.

Baidu needs to infiltrate other markets as well. It should not just confine itself to the Chinese market. Baidu employees cost effective strategies include cost leadership. In cost leadership, Baidu introduces services and products that are not into the market, at least as compared to its competitors. Over time, it gradually increases the prices to match those of its major competitors. The search engine business is first evolving. Baidu needs to employ differentiation as well. This means that they have to enlist other products and services as well, not just the search engine. Its major competitors, Google and Yahoo are already doing this (United States, 2006).

A strategy that Baidu is currently working on is to increase its presence, at least internationally. It needs to improve internet search infiltration. The world today is a global village. It means that consumers need research material and information that are drawn from different parts of the world, not just those that are sourced from a localized region. Baidu needs to adjust to the real Chinese marketing situation. The negative factors that Baidu needs to eliminate include stiff competition. Baidu mostly funds websites that are of Chinese origin. The information on its search engine is quite limited. It needs to improve its internet search filtration so as to eliminate or reduce trash information and pages that take long to open. It should ensure that it prohibits connections that have potential threats to virus.

The strategic goals for Baidu search engine include having a significant share of the Chinese market. It also hopes to explore international markets and to increase the traffic of its search engine. This gives it a competitive edge. It is also investing millions of dollars in expansion strategies and acquiring state-of-the-art technology so that it can be at par with its major competitors, Google and Yahoo search engine. Baidu mostly concentrates on the Chinese market. It seems to have established itself as a niche in this region. In fact, it controls 80.1% of the Chinese market. The strategic flexibility that they need is to increase products and services. They also need to explore other markets as well. Li, a co-founder of the company, said that Baidu invests in about 200,000 businesses. These businesses promote it as a company. They stay focused on the relevance of the market. They invest in the bidding process. The strategy is that Baidu will continue to grow whereas the search engine giants- Google and Yahoo-have already reached their saturation points in the market. Baidu will strike when the opportune time comes. The founder also hinted at having partnerships with other small and medium search engines. By doing this, it will be expanding its capital base and market presence.

Baidu also hopes to be innovative and adjust according to the needs of the market. By offering other products, it will be having a competitive advantage over Google and Yahoo. The risks and uncertainties of doing business in other markets are that one still does not know how the market is likely to respond. Different countries have different regulations and policies. It takes a long time before a business can break even. The other competitors are already established. The new company is only starting. It requires massive injection of capital that a company might not be having at the moment. Baidu hopes to cooperate with other small and medium search engine companies. This will ensure that it improves its customer base and get greater returns on investment.

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The potential risk is that some companies may refuse to cooperate. They may also fail to infiltrate the markets. Baidus long term goal is to be a market leader. Ambitious expansions can render it bankrupt; this may upset shareholders of the company and dent its good image. To protect itself, it must carry out expansions gradually and systematically.

Case Study Two

The competitive strategies that the two airline companies employ include changes in rates. United Airlines have significantly reduced rates in a bid to attract more customers. Moreover, they have attractive packages; first rate packages, full-fare and advance purchases that allow customers greater flexibility in choosing flights of their choice. United Airlines have eliminated discount tickets, and have realigned price with cost. They use smaller jets during low seasons. It gives them an advantage over bigger airline companies that find it uneconomical to operate larger jets during off-peak. United Airlines have also increased routes in a bid to expand and acquire more customers. They have also merged with other airline companies. This increases their customer base and improves the visibility.

United Airlines have changed the non-refundable strategy policy that used to discourage potential clients. The airline business is quite complicated. For one, it has stiff competition. This makes them reduce ticket fares. As a result, their profits are much limited. Competition is hurting the airline company. Interdependence is an important element of competition. It gives each of the airline industries a unique niche to exploit. This in a way to reduce completion, and each of them can concentrate on their unique products and services. This is the behavior that should be expected of airline companies. The pros of airline outsourcing strategy include reduced costs in operation since renting is cheaper compared to buying (Ansoff, 2009).

The outsourcing ensures that the airline company acquires highly skilled employees who are willing to work in the airline for a proportion of their salaries. It reduces the overall cost of doing business for the United Airline Company. The cons include issues of security. Outsourcing presents the United Airline Company with security issues such as crime, corruption, terrorism and political instability. The cooperative strategy is to work with bigger airline companies so as to improve visibility and increase returns on investment. The risks are that the business may be absorbed and lose its brand. The United Airline Company could end up being swallowed by bigger companies. In order to improve international strategy, the United Airline Company should ensure that it opens up more routes, adjust its rates and carry out massive advertisement (Ansoff, 2009).

The near term results include improved production of aircrafts that are convenient for peak and off-peak seasons. The long term results include the fact that the United Airline Company will be able to make more profits, improve its flight capacity and employ more people in the production of aircrafts. United Airlines will be able to design aircrafts according to its specifications, to meet its unique needs.

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