Organizational Strategies and Change

Change in an organization can be and usually is difficult for various reasons. Much of the difficulty is in the approach used to initiate change and the willingness to stay engaged and stamina to sustain change through to the end. Organizations can choose to lead by recognizing and implementing change, follow in the shadow of organizations leading the market, or get out of the way by standing still and eventually going under. With this said; if change was easily done and successful for every organization there would be no need for change management specialists and years

Organizational change encompasses many challenges to both the individual, and the organization. An organization is a living system, as Flower (2002) states “living systems cannot survive without change, challenge, variety, and surprise” (Flower, 2002, p. 16). An organization requires the ability to adapt in to survive as Darwin states in The Origin of Man, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change” (Read Me First, 2013, p. 1). It must adapt to the changing market, global economic pressures, stakeholder demands, and the diverse needs

To make meaningful and long-term change in an organization, an organization needs to follow the guidelines of a change model, a diagnostic instrument, and change intervention. This paper will discuss two change models, two diagnostic instruments, and two change interventions.

The cost leadership strategy seeks to improve profit margins by bringing down the costs of producing while enabling the organization to still charge market prices. They also focus on increasing the market shares through lower pricing, enabling the organization to continue to reach profits because of reduced costs. As with any organization the goal is to minimize cost directly to the organization providing the delivery of products or services. According to Barney (2007) low cost leadership strategy takes pride in initiating its costs advantage abilities to charge lower prices while reaping the rewards of higher profits.

In cost leadership a firm will set out to become a low cost producer in its industry. A low cost producer must find and exploit all sources of cost advantage. If a firm can achieve and sustain overall cost leadership then it will become an above average performer within its industry. The sources of cost advantage are varied and depend upon the

Managing organizational change is the process of planning and implementing change in organizations with maximum effectiveness and minimum circumstances and resistance. Today 's business environment requires companies to undergo changes almost constantly if they are to remain competitive. In this project paper I am going to discuss organizational change in PepsiCo. I will take a closer look on management approach and forces for change. I will introduce the change, make diagnosis and discuss how the change can be implemented.

Cost leadership strategy is used by firms to surpass their competitors by reducing their cost from production of goods or services and is part of the business level strategy (Hills et al, 2007). There are four factors that influence a company’s ability to build and sustain a competitive advantage: efficiency, quality, innovation and responsiveness to customers. These factors allow a company to (1) differentiate its product offering to create greater perceived customer value and (2) lower its cost structure, which will then build a competitive

There are four main organisational change strategies used to implement change which are Rational-Empirical Strategy, Normative-Re-educative Strategy, Power-Coercive Strategy and Environmental-Adaptive. The environmental-adaptive strategy occurs in seven stages:

According to Pearce & Robinson (2011), “a successful differentiation strategy allows the business to provide a product or service of perceived higher value to buyers at a “differentiation cost” below the “value premium” to the buyers”.

In differentiation strategies, the emphasis is on creating value through sustainable uniqueness. This can be achieved through product innovations, superior quality, or superior service, which is then sustained and leveraged through creative advertising; brand-building and strong supply chain relationships. Another requirement for a successful differentiation strategy is that customers must be willing to pay more for the uniqueness of a product or service than the firm paid to create it. A differentiation strategy will lead to higher firm performance only if buyers value the attributes that make a product or service unique enough to pay a higher price for it or if they choose to buy from that firm preferentially. If

Differentiation can be achieved in a variety of ways: unusual features, responsive customer service, rapid product innovations, technological leadership, perceived prestige and status, appeal to different tastes, and engineering design and performance. Methods of controlling costs, however, may be limited. The ability to price differentiated products competitively will be important for reducing upward pressure on customer prices so that they do not exceed the level customers are willing to

Cost and price leadership was developed by Michael porter and it was to help companies make use of a strategy which would put them on top of their competitors known as a competitive advantage. The cost and price leadership aim at increasing the profits and market share of Tesco’s through charging their customers lower prices, while still being able to make a profit on every sale they make. This is beneficial to Tesco’s as it will attract customers to their store rather than them going to a store such as Morrisons to purchase products. An example of Cost and price leadership was when Tesco began competing against Asdas, Tesco’s decided to lower the cost of their prices which they cut 25% of the price on over 380 items. This method bears advantages such as Increase in profits, increased brand awareness, an expansion of there customer base. Disadvantages may include potential of a loss, it may also lead Tesco’s to making cheaper products

Cost Focus: The cost focus strategy is similar to the cost leadership strategy which sets out to become the low cost producer in its industry except that instead of focusing its product

A successful cost leadership strategy usually provides the entire firm with high efficiency, low overhead, limited perks, intolerance of waste, intensive screening of budget requests, and wide span of control efforts. However, some risks of pursuing this strategy are that competitors might imitate the strategy, thus, driving overall industry profits down; that technology breakthroughs in the industry may make the strategy ineffective; or that buyer’s interest may swing to other differentiating features besides price.

This strategy is usually associated with charging a premium price for the product - often to reflect the higher production costs and extra value-added features provided for the consumer. Differentiation is about charging a premium price that more than covers the additional production costs, and about giving customers clear reasons to prefer the product over other, less differentiated products.