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Strategic Planning Process of Buzzi

Strategic and Marketing Analysis: Economic Environment for Buzzi
In the present business environment, just like any other organization, Buzzi is
tasked with the need to compete extensively. This is due to the globalization affect on
the business context that has made the business environment become so challenging
and complex to business enterprises (Kotabe & Murray, 2004: 7). That is, this
environment has become so uncertain and the increasing use of technological
applications that are also rapidly changing (Folmer & Tietenberg, 2005: 97). Just as
Pride & Ferrel (2008) explain about sustainability of a competitive advantage by an
organization, that a firm should have a form of advantage that is not easily imitated by
other competitors and should have a life (64), this effort is strived by Buzzi. In this
company, gaining a competitive advantage is a major evident of outdoing the
competitors, guarantees survival in the challenging business landscape and prominently
positions the firm in the market (Doole & Lowe, 2012: 4). The question is how effective
is the present business strategy for the organization in the economic environment to
realize its stated organizational objectives? And what are the significant capabilities and
resources that should be identified as the foundational sources of attaining a
competitive advantage for this firm?
Evaluation of Buzzis Current Competitive Advantage
Barksdale & Lund (2006) inform that when a firm consistently experiences
shortfalls to realize its set objectives and low performance levels relative to its
competitors are good signals that indicate that the strategy developed is poor. Signals
like: sales and income growth trends, trends in stock prices, general financial strength of
the firm, rate at which customers are retained and new customers acquired and sound
internal operations of the company that reduce production of defects, workforce
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productivity, customer satisfaction, and others. Thus, in an economic environment, a

firm needs to develop a business strategy that matches its capabilities and resources at
hand. That is, a firm is positioned to succeed when it is has sufficient resources at hand
to create a value for its customers (5-7). For Buzzi, just like most firms today, has
learned to embrace resource-based strategies that enable adequate resource
exploitation in ways that rivals cannot be able to imitate. Such strategies include, (a)
incorporating highly efficient centers for distribution that contribute to reducing costs to
levels that are much lower than those of the competitors (b) establishing strong
relationships with suppliers that are key to the production processes that ensure that the
firm gets consistent supplies throughout even during hard-times. This is in addition to
the other unmatched capabilities that are offered by suppliers like sharing of significant
information that is aimed at improving product value and creating product differentiation
in the market, and maintaining low levels of inventory since the suppliers have constant
information about the production schedules of Buzzi among others (Love, Louis &
Ellison, 2008: 90).
According to Cassidy (2005), popular types of competitive capacities and
valuable resources considered by organizations are listed to include: (a) specialized
expertise (b) suitable locations and use of advanced technological applications (c)
valuable workforce (d) valuable organizational processes and assets (e) organizational
alliances and ventures (67). When employing each of these factors to evaluate the
competitive advantage for Buzzi, the following is realized respectively: (a) The company
has considered to incorporate a specialized expertise that gives the firm an ability to: (i)
conduct business activities in low-cost operations (ii) produce innovative goods and
services (iii) easily and quickly get products newly created to the market (iv) have
unmatched supply chain management initiatives and (v) consistently offer good
customer support services. (b) Buzzi is equipped with highly advanced technological
applications which imply that internal processes are improved following changing
demands occasioned by external forces. However, the firm is not suitably located to
allow easy access to the plant by customers it is rather located near the sources of its
raw materials (c) Buzzi is well equipped with a proficient workforce that is talented in the
key areas of all the companys business activities. This workforce is well managed by a
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managerial team that is adequately knowledgeable of the technical business processes

and also has a sound training on how to run the organization successfully to meet its
stated business objectives. (d) The operations of this company are strongly supported
by sound management standards that such as quality control, distribution networks,
retail dealership processes and others. Also, the company has been in the business
long enough and has managed to earn a good business reputation through its social
responsibility initiatives, also, through the production of quality products and market
segmentation, the company has managed to create and maintain a powerful brand
name that has a strong customer loyalty in the market today. (e) Joint ventures with
foreign companies like Shanshui and Sinoma have supported the operations of this
company by giving it access to advanced technologies that match the changing
demands of the external forces while satisfying organizational needs internally, provided
more specialized training that has improved key areas of the business operations, and
gaining access to markets that are located in different parts of the world (Doole & Lowe,
2008: 34-35).
Strategic Direction and Strategic Formulation for Buzzis Business to Sustain its
Competitive Position over the Next Three Years
Overview
The evaluation of the competitive abilities and resources of Buzzi informs of how
strong it is in the highly competitive business environment. However, according to
Mintzberg (1994), the value of a resource is said to be determined when it passes
through four different types of tests. Which are: (1) is the value created by the resource
competitive enough. In that, some have the potential of enabling a company gain a
competitive advantage and others dont (2) are the resources considered rare to find
which can be equated or made better by rivals? (3) Are the resources used easily
imitated by others? That is, others can afford to copy it. This makes these resources
lose a competitive advantage (4) can the resources considered by surpassed by rivals
substitute resources? Applying these tests to determine the power of Buzzis key
resources, it is found out that attributes like companys reputation, patent protection and
brand royalty are very expensive for rivalry companies to afford and thus are resources
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that are hard to imitate. However, these resources stand a chance of losing their
competitive advantage if there exist competitors substitute resources that are
equivalent to them. This aspect can be understood more when competitors have better
production technologies than Buzzi, in that technologies used can be imitated and even
made better by the rivals. Being unable to match technological inputs and even having
better applications is said to easily lead to business failure in the economic environment
(159-162). This again leads to the question: how can the company sustain its
competitive position over the next three years?
Strategic Direction
The strategic direction for Buzzi is to ultimately lead in performing highly in the
business environment it operates in while its efforts are founded on a sustained
competitive advantage. This ideology is also supported by Hills and Jones (2008) who
argues that market leadership is ensured when organizations have the capacity to
remain ahead of their competitors who are presently existing and those who are about
to be rivals as well. To attain this competitive advantage, a firm needs to have a
business model that perfectly matches its internal capacities and these capacities are
fully exploited to produce a customer value that is hard to imitate and to be outdone by
the rivals substitute products or services (77-78). To achieve this, Buzzi endeavors to
study critically the operations of all its competitors, which include those existing and the
potential ones too. This it achieves by determining their strengths and weaknesses and
crafting what opportunities could be realized from the gaps identified that another
company could find solutions to these gaps. Moreover, the firm also attempts to
evaluate strategies that are incorporated by other established firms performing well in
their markets, so as to find ideas that it can borrow to develop its competitive
advantage. Another way is to be familiar with significant factors that exist in the external
environment that can act as suitable sources of gaining a competitive advantage.
Importantly also, the firm strives to determine what sources of competitive advantages
that the competitors have as well as their business strategies. This it manages by
studying the reports publicized annually, networking, and others Grunig, Clark & Kuhn,
2010-25-30).
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Strategic Formulation: Strategic Choice

Decisions made always produce actions that give results and thus performance
results of any organizations are based on the decisions that the business leaders make
(Abraham, 2012: 45). Triantis (2013) argues that organizational decisions are made
following a strategic framework that offers guidance and focus. Hence the strategic
framework that places a company in a competitive position is said to be referred to as a
competitive strategy whose main goal is to create a sustainable competitive advantage
in the highly competitive business environment (345). For Buzzi, the strategic choice
that it goes for is one that creates a sustainable competitive advantage that answers the
over aching questions like: (a) how can the business be defined today and tomorrow?
(b) What kind of markets and industries does the company compete in and how intense
is the competition that influences the profit margins of the firm as well as its competitive
attractiveness? (c) How the firm responses to the external competitive forces that exists
in the industries and markets chosen? (d) What are the approaches that are
fundamental towards gaining a competitive advantage for the firm? (e) What position in
the market does the firm strive to attain? And (f) what methods of growth are best for the
company? Thus in general, the strategic choice that a firm opts for is one that: (i)
effectively enables it to balance organizational needs today and its opportunities in
future (ii) consistently leads in organizational performance in terms of profit margins,
revenue growth, and shareholders total returns and (iii) sustains the competitive
superiority position over a long period of time throughout business cycles, management
changes and industrial disruptions (Lowitt & Grimsley, 2009: 1; Doole & Lowe, 2006:
70).
Recommendations on What Buzzi needs to consider to sustain its Competitive
Advantage over a Period of 3years
Integrating together all the facts discussed in the previous sections, it is
appreciated that it is crucial to understand the competitive strengths of key resources
identified in a firm, which enables it to determine which resources are to be developed
further so as to support the organization in realizing its future business strategies. Also,
other resources can also be measured by the tests to determine their potentials. This
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can be achieved by assessing what sources of competitive advantages competitors

have and other firms that have remained successful in the market to gain ideas. This
can also be done alongside changes in customer demands and preferences. For Buzzi,
these business strategies that are resource based are compelled to weaken the
competitive efforts of rivalries both existing and upcoming ones in future. This is
especially realized by identifying competitive weaknesses of competitors key resources
and coming up with substitute resources that play the same role and even more better
before other rivals can. This for example can be continuous employment of
technological advancement, getting closer to understand customer behaviors that are
covered in demand forecasting and demand management systems and others. Thus,
one strategic formulation can be said to include careful and consistent development of
competitive resources that have proven to effectively substitute competitors key
resources (Fogg, 1994: 35-40; Capon, Farley & Hoenig, 1996: 9). This development
also covers furthering development of internal resources that have the potential of
enabling the firm meet its stated business objectives. These are especially those that
can be easily imitated by others like technological applications.
As Lussier (2008) argues, the strategic formulation discussed previously cannot
be accomplished effectively without placing an emphasis on companys core
competency in performing all its business activities. This organizational competency is
said to vary accordingly throughout a business operation. Competency is expounded to
imply doing something proficiently. Thus certain business operations demand expertise
skills like controlling inventories, selecting locations and others. Other competencies
that are multidisciplinary like those involved in product development are made up of
efforts bundled up from different groups of people. These people are said to be
equipped with adequate knowledge of the market, engineering, low-cost production
processes and others. Such different forms of competencies collectively form a
companys core competency that develops its capacity to operate successfully in a
highly competitive marketplace. This competency model forms the foundation of a
sustainable competitive advantage (145-150).
Carlock & Ward (2001) & Bohm (2009) also mention about capitalizing on the
strengths of the company to capture reasonable business opportunities available in the
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economic environment and also to protect the organization against possible threats that
hinder its potential successes. This conveys the importance of determining strengths
and weaknesses of a companys key competitive resources. A weak competitive
resource puts an organization at a disadvantaged position in the market place. This
ultimately is evaluated to mean that a business strategy can heavily place demands on
weak points of the company. This is explained to mean that resources that have not
been tested should be avoided and they can include: untested expertise or skills in
business activities that are highly competitive, organizational assets that have a
deficiency or have low capabilities in performing in major activities of the business and
others. Thus, it can be said that when identifying the strength of companys key
resources, potential areas to consider are: (a) very strong intangible assets of the
company; (b) very strong financial position that easily grows the business; (c) good and
sound product innovation capacities; (d) and a strong ability to ensure a wider coverage
of suitable geographical locations for a strong product distribution around the world.
Others include (e) corporate ventures and alliance for the purposes of maintaining
superior technological skills and patent protection; (f) better quality management
systems than those of the rivals; and (g) organizational capacities that have proved to
make improvements in production processes and others. These extreme abilities of the
companys key resources are found to enable an organization to capture business
opportunities such as: (a) expanding the market share by covering more markets
geographically and furthering efforts to cover more needs of the market; (b) utilizing
knowledge and skills to enter in new forms of businesses and product lines; and (c)
acquisition of competitor firms that have sound technological capabilities and expertise
and others. This can be explained to mean that without proper tests of the capabilities of
the companys key competitive resources, a firm would fall into risks. These may
include: (a) having weak intangible assets of the company, narrow product lines in
comparison to those of the competitors, falling in too much debts that burden effective
operations of the firm, having weak core organizational competency, and ultimately
losing a clear direction of the business strategy. This point recommends that Buzzi
should critically evaluate the strengths of its key competitive resources so as to realize

its 3year business goals more successfully than to fall into such potential business
threats (149-150).

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