Paper Example on Global Strategies for Medifast Ado: Key Considerations

Introduction

The corporate-level strategy is the various activities that the management of an organization undertakes to ensure that the firm gains a competitive advantage over its competitors by identifying the key features that will help the facility gain the upper hand (Furrer, 2016). For an organization to operate globally, there are key decisions that the supervisors must consider to enable the firm to penetrate the international market and sustain the command it has on the market.

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Medifast adopts an expansion strategy, where the firm strives to grow in size continually. The firm believes that diversification of its products will ensure that it increases its capacity because the various products and services provided by the firm will attract many customers with different needs. With diversification being the main approach taken by the firm, it is also open to various plans such as acquisition. The strategy involves purchasing other companies assets or shares to enable the firm to have control over the activities of the acquired institution. This move will enable Medifast to control the flow of goods by operating as a monopoly, where the company will increase their market share to the extent that the firm produces most of the products available for purchase. However, they may stick with the company name to help retain the trust of customers who had been using the product.

The company also plans on merging and forming strategic alliances, where combining with other firms to form a single company will help the company broaden its customer base. Strategic alliances are vital in ensuring the company improves its competitive positioning while sharing the risk and costs that accrue when developing major projects.

Incentive for Using This International Strategy

The strategy of acquisition enables the firm to reduce the barriers available when entering new markets. This strategy is effective, especially to companies with brands that are already recognized and have an established customer base. Medifast will then avoid the trouble of penetrating the market but will improve on the key areas they feel needs to be corrected to increase the quality of products and sales. The acquisition helps in increasing the market share of the company. This move enables Medifast to provide goods to both the customer base of the new company and the ones they usually have. It will ensure they gain a competitive advantage over their competitors because of the wider customer base and achieve market synergy.

By acquiring another company, Medifast will have access to resources they previously did not have. The move to acquire another business is usually strategic and happens when the significance of the activity is great. When the firm has access to resources, the revenues of the firm increase, therefore, stabilizing the financial status of the firm. The stability of the firm will enable it to cope with changes in the economy hence ensure the long-term existence of the organization.

Acquisition will help Medifast have employees with diverse expertise. The various abilities are key and may prove helpful when an employee in the acquired firm can solve problems that they have been experiencing. The different employees can share ideas on how to develop both firms, which will ensure the company strives to achieve its objectives. The move will enable the company to get exposed to new ideas which can be adopted to facilitate the company’s efforts towards success. Acquisition is an important strategy that when correctly done, helps a firm grow globally and increase its customer base and revenue

Overview of the Strategic Management Plan

The growth strategy is an effective strategy to be used by the organization as it helps expand the size of the firm. If well-executed, a company will enjoy the benefits of expanding, which include an increase in the revenue, having a broad customer base among others. The plan also allows the firm to diversify where it can deal in the same product or a different one. It helps in sharing of ideas between the staff of the two companies who are under the same management.This plan aims at increasing the size of the organization by purchasing other organization that may not be doing well or those that are its competitors. The organization intends to broaden its customer base to command the market. By doing so, the firm will realize an increase in the profit margins while gaining advantages such as access to resources they did not have and belong to the company they acquired. There are several strategies I will recommend to firms in this position and including: a retrenchment strategy where a firm decreases the activity it does if the product it is dealing with is costly and has little or no profit (Rico & Puig, 2019). This strategy will ensure the firm can still produce goods that generate revenue and reduce investment on the products that do not. Another strategy the facility can take is the stability approach, where the organization aims to maintain the current method of operation where they keep the production constant (Bryson et al. 2018). They also retain the customer base to ensure that the firm survives and continues to generate revenue steadily.

A firm can also decide to combine the retrenchment strategy and the stability approach where they reduce the production of goods that realize less profit and increase effort to the production of the good or service that is more profitable (Santana et al. 2017). This strategy will ensure the organization is sustainable and survives for a long time.

References

Bryson, M., Edwards, H., & Van Slyke, M. (2018). Getting Strategic About Strategic Planning Research. Public Management Review.

Furrer, O. (2016). Corporate Level Strategy: Theory and Applications. Routledge.

Rico, M., & Puig, F. (2019). Successful Turnarounds in Bankrupt Firms? Assessing Retrenchment in the Most Severe Form of Crisis. BRQ Business Research Quarterly.

Santana, M., Valle, R., & Galan, J. L. (2017). Turnaround Strategies for Companies in Crisis: Watch out the Causes of Decline Before Firing People. BRQ Business Research Quarterly, 20(3), 206-211.