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Business Plan Is Critical For Business Plan

Since the definition of ethics is always in the eye of the beholder, it is essential that the business frame the issue of ethics in a proprietary manner. Each firm will choose a slightly different version of ethics to which it will adhere, but that choice must reflect the ethical standards of potential investors and potential customers so as to continue to attract both groups. A business with a clearly thought-out, well-defined code of ethics is more likely to have those ethics permeate throughout the organization. If nothing else, the ethical principles will be consistent throughout the organization, such that management and other stakeholders know what to expect from their employees. That, at least, will provide insurance against the likelihood of an Enron-type situation where nobody knew what the ethical standards where and therefore ended up acting in an entirely unethical manner.

4. Sustainable competitive advantage comes from firm-specific characteristics that provide a competitive advantage that other firms in the industry cannot replicate, best or match. In the resource-based view of strategy, there are a handful of ways in which a firm can generate sustainable competitive advantage -- patents and trademarks, proprietary know-how, installed customer base, reputation of the firm and brand equity (Quick MBA, 2007). Of these, the latter two can be developed through marketing strategy.

Marketing strategy can be built around promoting the reputation of the firm. The firm's reputation can be trumpeted in order to gain broader acceptance in the marketplace. Alternatively, the firm's reputation can be detailed with a marketing strategy that emphasizes awards and customer satisfaction surveys. In either case, the marketing strategy would need to be consistent in its message, and would need to reach potential customers not reachable through the conventional channels.

Marketing strategy can also be built around building brand equity. Brand equity comes from recognition, reputation and recall. The more people are aware of a brand, can recall slogans, understand the products associated with that brand and recognize the reputation that the brand managers have sought to build.

By building a strong reputation and brand equity, a firm can establish...

For example, no matter how good superior another adhesive bandage might be, consumers will always consider Band-Aid to be the best, giving that brand a sustainable competitive advantage by virtue of reputation and brand equity.
Organizational structure can also be used to create sustainable competitive advantage. This is done by structuring the organization in such a manner as to leverage the organization's proprietary know-how. No matter which organizational structure is chosen, the linkages it creates give the company a specific hierarchy and flow of information than can be used in order to help the company excel in areas where other firms are weak. For example, the centralized command structure of firms like Wal-Mart and FedEx have allowed them to develop consistent excellence of performance that in turn make them very difficult competitors. This has resulted in both company's meteoric rise from obscurity in the past thirty years.

The organization can also use organizational structure to derive sustainable competitive advantage through its value chain. If the structure allows for the firm to push products and services through the different stages of development more quickly or more efficiently than can competitors, this advantage can be sustained. The aforementioned Wal-Mart and FedEx derive considerable value through their logistics, which by virtue of having a centralized structure can be tightly managed across a range of geographies and business units. This allows both firms to control costs, one of the most important elements in deriving a sustainable competitive cost advantage, which can be used to either compete based on price, or to derive higher than average margins.

Works Cited:

Concord Business Development. (2001). Importance. Concord Business Development. Retrieved December 14, 2009 from http://www.concordbusiness.com/services/business_plans/importance.html

Cox, H. (2007). The importance of a business plan. EZine. Retrieved December 14, 2009 from http://ezinearticles.com/?The-Importance-of-a-Business-Plan&id=834882

No author. (2007). Competitive Advantage. QuickMBA. Retrieved December 14, 2009 from http://www.quickmba.com/strategy/competitive-advantage/

Sources used in this document:
Works Cited:

Concord Business Development. (2001). Importance. Concord Business Development. Retrieved December 14, 2009 from http://www.concordbusiness.com/services/business_plans/importance.html

Cox, H. (2007). The importance of a business plan. EZine. Retrieved December 14, 2009 from http://ezinearticles.com/?The-Importance-of-a-Business-Plan&id=834882

No author. (2007). Competitive Advantage. QuickMBA. Retrieved December 14, 2009 from http://www.quickmba.com/strategy/competitive-advantage/
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