The rake company faces four fears: declining sales, fierce competition, declining market share, and the fear that a large company will seize it. There are other fears that the government will impose barriers on the company or impose excessive taxes, but it is difficult to deal with. Government power is always greater than company power. Here is a discussion of how companies deal with the fears they face and the limitations of those steps.
Decentralization: The company empowers its managers to deal with such threats. The power to change the highly centralized management structure empowers supervisors and workers to make certain decisions. But the main danger in this is coordination. Decentralization of power fails due to lack of coordination. Decentralization is not an easy answer to the complex questions of what level and how much to fly.
Strategic planning: Companies have now abandoned the idea of long-term planning and adopted the idea of strategic planning instead. No one knows for sure. If strategic planning is done on a wrong guess, the company is bound to fail.
Diversification: Many companies enter different business sectors to increase their sales and profits. Many companies diversify into a business that has nothing to do with their core business. If a successful textile mill enters the jute or dyes and chemicals business, it has its ups and downs.
Experience Curve: You often fall if you are learning to cycle in the beginning. After a lot of experience, you can also cycle with both hands free. Almost every skill in the world develops more and more from experience. Every new company gets the benefit of experience but companies that do mass production and specialized marketing get more of this benefit. The limitation of this is that technology is changing so fast that in two, three or five years your technological skills become outdated and you are thrown into a new state of affairs.
Restructuring: You can sell a non-profit business unit or a business that does not fit into the company’s identity but it is difficult to know which business does not fit into the company’s identity or the company’s culture.
Core Competence: Critical Skills If the emphasis is on a single skill for the success of a company in strategic management, it is Core Competence. This skill gives you a competitive advantage. But these poignant skills do not last long. It becomes outdated. Once upon a time, Motorola companies had profound skills in the production and distribution of cellphones, which are now obsolete by Samsung and Apple.
Strategic alliances: Many companies have become global by forming a strategic government with other companies. But it is important to be careful. What if there is a war with the foreign companies with which you have strategic alliances? What to do if there is a sharp rise and fall in the exchange rate? Vali strategic alliances sometimes create a sense of illusory security in you. In English this is called False Sense of Security.
Dispersing: In order to protect the company from bureaucracy, the company reduces the layers of power, so the middle management is at a disadvantage. In some cases, middlemen are fired, but many skilled managers lose their jobs. The company may not be able to use this skill even if it is needed in the future.
Constant change: Management experts are proud to say a word to Prasannavad four times. The only thing that matters is change. But even management consultants do not know what the change is and what the company will have to do about it. Divination is an imperfect art. Companies talk about proactive change and reactive change. But all these things are very general and vague.