The science of business is to develop a strategy that affords a firm the best possible outcome with respect to the return on investment (ROI). Where abnormal returns are recognized the competitive landscape of an industry grows. The prevailing thought is competition drives consumer benefit. The consumer benefits because competition will lower pricing and improve offerings. As firm’s attempt to climb the mountain of market leadership they often discover the ability to remain on top can be short lived. In this age of hyper competitive markets a firm’s ability to sustain a competitive advantage is reliant on executing a strategy that creates a series of advantages over time (Wiggins & Ruefli, 2005).
Advantages over time can be accomplished using strategies that attack a market or competitor on multiple fronts. One of those fronts consists of a business’s operational structure. Structuring a business’s integration-response framework will assist with meeting business objectives. Different frameworks better facilitate certain objectives. Determining the optimal framework requires a business to understand their strategic objectives. As businesses grow and evolved so must their structural framework. This requires a business to continuously evaluate and refine their strategy. During the process of refining the strategy a business may recognize the need to change their structure in order to facilitate better more effective outcomes.
Bayer MaterialScience (BMS) North America (NA) strategic motto is “taking aim at new markets”. This motto is further translated into their goal of long term profitable growth ("Bayer materialscience corporate," 2014). This goal of long term profitable growth was put to the test in 2007 when Bayer was determined to dismantle BMS NA operations for cost reduction purposes. Their reasoning, the regional structure was too bloated (Peng, 2014). In an effort to course correct, Greg Babe the head of BMS NA developed a value proposition aimed at maintaining the NA operations. This strategy called for Bayer to invest $70 million into an operation originally slated for closure. Greg Babe and his team developed a strategy where a $70 million investment would provide returns in the form of growth (1% to 2% above gross domestic product) and a cost savings (25% on selling, general and administrative expenses).
This analysis will discuss how Bayer’s use of the geographic area and matrix structures helped drive their revitalization initiate in NA. It will conclude by evaluating the potential ethical dilemma company’s face when determining motives underlying decisions to protect one’s business. This discussion will determine how a company can distinguish between genuine and self-serving proposals.
The phrase “timing is everything” holds true in sports, military action, and business. In football the quarterback (QB) is anticipating how to successfully navigate the defense through...