Your Business – Part 1: Assignment #3

LaPrincess D. Allen

The roots of strategy are in competition. The word “strategic” comes from the Greek “strategos,” which means “a general set of maneuvers carried out to overcome an enemy during combat” (Nutt & Backoff, 1992, p. 56). The heritage of “overcoming an enemy” is alive and well in business strategy today. Gaining market share, differentiating products and services from competitors, and—certainly—“gathering marketing intelligence,” all can trace their roots to the competitive, military-based concept of strategy. In Porter’s words: “developing a competitive strategy is developing a broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals.” (Porter, 1980, p. xvi).
The business I chose is a non-profit business, named Time To Go (TTG) that focus on natural energy that can also use chemicals and natural resources. Some non-profit organizations may also be a charity or service organization; they may be organized as a not-for-profit corporation or as a trust, a cooperative, or they exist informally. A very similar type of organization termed a supporting organization operates like a foundation, but they are more complicated to administer, hold more favorable tax status and are restricted in the public charities they support.
Nonprofits have benefited from the development of strategy concepts in the for-profit world, and have applied many of them (Stone & Crittenden, 1993). For example, Bryson (1994), as well as Nutt & Backoff (1992), utilize SWOT analysis and environmental analysis in their widely used texts on public and nonprofit strategy. Two recent texts (Kearns, 2000; La Piana & Hayes, 2005) even draw directly on the competitive legacy of strategy. The La Piana & Hayes book is entitled “Play to Win: The Nonprofit Guide to Competitive Strategy.”
After collectively considering the products and services demanded by customers, strengths and weaknesses of competitors, the environment, and the firm's own strengths, weaknesses, cultures, and resources, proficient firms can formulate their vision as expressed through the mission statement. This statement expresses the organization's values and aspirations; basically its reason or purpose for existence. Based on this mission statement the firm will formulate its business strategy. This business strategy is a long-term plan for accomplishing the mission set forth in the mission statement. Each function within the business can then derive its own strategy in support of the firm's overall business strategy (financial strategy, marketing strategy, and operations strategy).
Operations strategy is the collective concrete actions chosen, mandated, or stimulated by corporate strategy. It is, of course, implemented within the operations function. This operations strategy binds the various operations decisions and actions into a cohesive consistent response to competitive forces by linking firm policies, programs, systems, and actions into a systematic response to the competitive priorities chosen and communicated by the corporate or business strategy. In simpler terms, the operations strategy specifies how the firm will employ its operations capabilities to support the business strategy.
Operations strategy has a long-term concern for how to best determine and develop the firm's major operations resources so that there is a high degree of compatibility between these resources and the business strategy. Very broad questions are addressed regarding how major resources should be configured in order to achieve the firm's corporate objectives. Some of the issues of relevance include long-term decisions regarding capacity, location, processes, technology, and timing.
The achievement of world-class status through operations requires that operations be integrated with the other functions at the corporate level. In broad terms, an operation has two important roles it can play in strengthening the firm's overall strategy. One option is to provide processes that give the firm a distinct advantage in the marketplace. Operations will provide a marketing edge through distinct, unique technology developments in processes that competitors cannot match.
The second role that operations can play is to provide coordinated support for the essential ways in which the firm's products win orders over their competitors, also known as distinctive competencies. The firm's operations strategy must be conducive to developing a set of policies in both process choice and infrastructure design (controls, procedures, systems, etc.) that are consistent with the firm's distinctive competency. Most firms share access to the same processes and technology, so they usually differ little in these areas. What is different is the degree to which operations matches its processes and infrastructure to its distinctive competencies.
Applying ideas about strategy to the not-for-profit world, which were created in the for-profit world, needs to be done carefully. Clear differences in these types of organizations exist. One significant difference between for-profit and not-for-profit entities is how they each determine their effectiveness. While a wide variety of perspectives exist on nonprofit effectiveness, and it has been well argued that effectiveness is “socially constructed” (Herman & Renz, 1997, 1998, 1999), nonprofit effectiveness is often thought of in terms of mission (Sheehan, 1996) while for-profit effectiveness often focuses on “profit” and/or shareholder value (Smith, 1999 & 2004). So, while for-profits may be mostly focused on ways to “outperform rivals” (Porter, 1996, p. 62), not-for-profits can be thought of as focused on “mission accomplishment” (Sheehan, 1996).
While there may be exceptions when a competitive mind-set is appropriate for a nonprofit to consider in developing strategy, most do not take this approach. In utilizing strategy concepts in nonprofit organizations, most practitioners, consultants, and authors use various strategy tools – while purging the ideas of “outperforming rivals,” growing shareholder value, and competition – from the process. But if, those competitive drivers are purged, what is used as a replacement?
Quality improvement, in particular Total Quality Management (TQM), has had a major influence on U.S. management philosophy (Ross, 1993). While not a modern idea, quality improvement has gained interest in recent years. For most of the 20th century, productivity was the primary emphasis for most profit and non- profit organizations; the emphasis, however, is now changing to quality. The reason is simple; neither price, technology, nor quantity is sufficient to differentiate products or services from the competition. One thing that attracts and keeps customers is the "extra value" of quality--as defined by the customer (Cannie, 1991).
With my non-profit, I would take time in deciding where to locate both regional headquarters and an international operation in Singapore. The non-profit operates on a just in time process. The non-profit receives raw materials only as they need it and send out supplies to the main manufacturing plants to be used in the products only as they need it. By being along the coast it is easy to have the ships and trucks pick up and deliver the products in as short of time as possible.
The regional headquarters is located in the large business area of downtown. This is a good location because it locates them around local government and other businesses that may make rules and policies that could affect TTG. It also allows them to have the most resources and contacts from the local economy to use in the region.
Relationships have been in place with two main groups in Singapore long before TTG ever decided to build a plant. The Economic Development Board and A*Star’s Institute for Materials Research and Engineering are the two main groups they have been involved with. Since TTG built these relationships before building a plant in Singapore they have thus established a strategic alliance with Singapore. The Economic Development Board and A*Star’s Institute for Materials Research and Engineering have come together with TTG to share resources and complete a project. Time To Go benefit from setting up a strategic alliance with A*Star by getting the privilege of looking at IMRE’s innovative research (Moneycontrol.com, 2008). In return for this preferential treatment, TTG shares its new innovations with A*Star’s IMRE (Moneycontrol.com, 2008).
TTG also entered into the Singapore manufacturing industry through a Greenfield venture. The 6,500-sq.-meter-fragrance manufacturing plant was built within a seven month period and it was a multi-million dollar project for P&G. This wholly owned subsidiary allows the company to have control over their intellectual property concerning how to manufacture perfumes for their cleaning products and bathing products. Singapore was a natural choice to build a chemical plant, since the country focuses on creating an innovative business-friendly environment that is supported with a strong infrastructure. In regards to the TTG Singapore chemical plant, this endorsement has brought us one step closer to realizing our vision for Singapore as Asia’s Lifestyle Lab.”
Our Singapore has become the third largest competitor in chemical care in Singapore through acquiring four main Singapore chemical brands. This acquisition deal has benefited TTG Singapore in terms of higher profits and increased their market share in the chemical care Singapore market. By acquiring these four key chemical brands, the TTG Singapore is able to enter into the Singapore chemical market with ease and it provides the company with brand loyal customers. This acquisition saves the company money and time in areas of marketing research, marketing campaigns, and acquiring the needed distribution and store outlets for new products.
TTG practices a transnational strategy, which is a combination of a multi-domestic strategy and a global strategy. Evidence of this strategy can be buttressed by its approach to business, “Think globally and act locally”. In respect to the global strategy, TTG sees the entire world as its market, but tries as much as possible to locate operations in areas where costs can be minimized, and where they can be very efficient in whatever contributions the unit makes to the organization as a whole. It has about 125 manufacturing plants, spread all over the world. The recent addition was a plant in Tuas, Singapore, which produces chemical energy.

REFERENCES
Bryson, J. M. (1994). Strategic Planning and Action Planning for Nonprofit Organizations. In R. D. Herman (ed.), The Jossey-Bass Handbook of Nonprofit Leadership and Management. San Francisco: Jossey-Bass.
Cannie, J. K. (1991). Keeping customers for life. New York: American Management Association.
Herman, R. D., & Renz, D. O. (1997). Multiple constituencies and the social construction of nonprofit organization effectiveness. Nonprofit and Voluntary Sector Quarterly, 26, 185-206.

Herman, R. D., & Renz, D. O. (1998). Nonprofit Organizational Effectiveness: Contrasts between especially effective and less effective organizations. Nonprofit Management & Leadership, 9 (1), 23-38.
Herman, R. D., & Renz, D. O. (1999). Theses on Nonprofit Organizational Effectiveness. Nonprofit and Voluntary Sector Quarterly, 28, 107 - 126.
Kearns, K. (2000). Private Sector Strategies for Social Sector Success. San Francisco: Jossey-Bass.
Moneycontrol.com. (2008, March 7). P & G selects Singapore for its perfume plant. Retrieved November 14, 2012, from http://www.moneycontrol.com/india/news/news/
Nutt, P.C., and Backoff, R. W. (1992). Strategic Management of Public and Third Sector Organizations. San Francisco: Jossey-Bass.
Porter, M. E. (1980). Competitive Strategy. New York: The Free Press.

Ross, J. E. (1993). Total quality management: Text, cases and readings. St. Lucie Press.

Sheehan, R. M., Jr. (1996). Mission Accomplishment as Philanthropic Organization Effectiveness. Nonprofit and Voluntary Sector Quarterly, vol. 25, no. 1, 110-123.

Smith, D. K. (1999). Make Success Measurable. New York: John Wiley & Sons.

Smith, D. K. (2004). On Value and Values. New York: Prentice-Hall.

Stone, M. M., & Crittenden, W. (1993). Articles on Strategic Management in Nonprofit Organizations. Nonprofit Management & Leadership, 4(2), 193-213.