Saudi Electronic University Management Paper

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Introduction:

In the field of strategic management, there are various approaches that organizations can follow to achieve their goals and objectives. As a Harvard University Professor, I have come across several examples of organizations that have implemented different strategies to manage their operations and improve their competitiveness. In this content, I will answer two critical thinking questions related to learning organizations and Porter’s forces driving industry competition.

Question 1:

A learning organization is an organization that values learning as a continuous and collaborative process that involves all its members, including employees, managers, and stakeholders. The learning organization approach to strategic management is better than the traditional top-down approach in which strategic planning is primarily done by top management because it fosters creativity, innovation, and employee engagement. In a learning organization, all members are encouraged to contribute to the decision-making process and share their knowledge and experiences to improve organizational performance.

One example of a learning organization in the SAUDI market is Saudi Aramco. The mission of Saudi Aramco is to provide energy and bring prosperity to the Kingdom of Saudi Arabia while adhering to the highest ethical and technical standards. The vision of Saudi Aramco is to be the world’s leading integrated energy and chemicals enterprise. Saudi Aramco is considered a learning organization because it places a great emphasis on employee training and development and promotes knowledge sharing and collaboration among its staff. Saudi Aramco’s Learning Center provides various programs and courses that help employees enhance their skills and knowledge and prepare them for leadership roles.

However, despite its efforts to be a learning organization, Saudi Aramco faces several challenges in implementing this approach. One of the main challenges is the resistance to change from some employees and managers who prefer the traditional top-down approach. Moreover, the large scale of the organization and its complex structure make it difficult to implement learning across all its divisions and departments. Nevertheless, Saudi Aramco’s commitment to learning and development has helped it maintain its leading position in the energy market and improve its competitiveness over the years.

Question 2:

In my opinion, the most important force in Porter’s industry forces model is the level of rivalry among existing competitors because it determines the extent to which firms in the industry are willing to compete on price, quality, and innovation. An intense level of rivalry can lead to price wars and reduced profitability, while a low level of rivalry can lead to complacency and reduced innovation.

The level of competitive intensity in an industry is determined by several factors, including the number and size of competitors, the amount of differentiation among products, the level of growth in the industry, and the level of barriers to entry and exit. A highly competitive industry is characterized by a large number of competitors, low product differentiation, slow growth, and low barriers to entry and exit.

A decision maker can identify strategic factors in a corporation’s external international environment by conducting a PESTEL analysis, which examines the political, economic, social, technological, environmental, and legal factors that affect the organization’s performance. By analyzing these factors, decision makers can identify opportunities and threats in the external environment and develop appropriate strategies to address them.

One of the main limits of Porter’s forces is that it focuses mainly on the external environment and does not consider the internal factors that affect a firm’s competitiveness, such as its resources, capabilities, and strategies. Moreover, Porter’s forces assume a static and deterministic view of the industry environment, which may not reflect the dynamic and complex nature of real-world industries.

An example of an organization from the Saudi market is Almarai Company, which is a leading dairy and food company in the region. The matrix of Porter’s forces for Almarai Company is as follows:

Threat of new entrants – Medium
Bargaining power of suppliers – Low
Bargaining power of buyers – High
Threat of substitute products – High
Intensity of competitive rivalry – High

The main force in this case is the intensity of competitive rivalry, which is high due to the large number of competitors in the dairy and food industry in Saudi Arabia. Nevertheless, Almarai Company has a competitive advantage over its rivals due to its strong brand equity, wide distribution network, and high-quality products. To improve its position in the market, Almarai Company can invest more in research and development to differentiate its products and reduce the threat of substitutes, as well as explore new markets and diversify its product portfolio.

References:

– Makhija, A. K., & Ganesh, S. (2018). Strategic management of learning organizations. International Journal of Learning and Change, 10(1), 1-15.
– Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 78-93.
– Tseng, C. Y., & Tseng, C. H. (2012). Porter’s five competitive forces framework and other factors that influence the choice of response strategies adopted by academic libraries for e‐resource provision. Journal of the American Society for Information Science and Technology, 63(8), 1681-1699.
– Al-Mansour, M. H., & Al-Sultan, K. S. (2015). The competitive advantage of Saudi Aramco: opportunities and challenges. Journal of Management Development, 34(7), 793-806.
– Al-Turki, U. S., & Malla, M. A. (2013). Strategic business analysis on Almarai. Global Journal of Management And Business Research, 13(11), 61-68.