In everything we do, and I mean everything, there are pros and cons; like in Physics “For every action, there is an equal and opposite reaction”. For example: You get mad at your bestfriend and you punch him in the face. You feel good after but your knuckles will freakin’ hurt so you put an ice pack on it. It’ll feel better but it’ll turn violet. The pain and color will fade after a few days but your bestfriend will forever remember what you did not to mention having a bad record. So it’s either you won’t feel any guilt, or live with the guilt for the rest of your life. But you can always forgive and ask for forgiveness. The question is if your bestfriend is willing to forgive you, which if not, will lead you back to the drawing board and think of another solution for reconciliation.
Most of us, before doing a specific action required by a specific event, think about the consequences first. If the consequences are bearable, they go for it. But if not, they’ll think of another action with a more bearable consequence or will think of a solution for the consequence. The events here are the forces that usually require actions called strategies. This does not just apply on individuals, but in organizations as well. Business is business and business as usual.
As much as possible organizations always want to be above others; they want to be the best. There is always the phrase “healthy competition”. Can it still be called healthy when they are doing everything not to keep themselves up but to keep others down? I don’t think so. But it cannot also be called healthy if there is no competitor. How will you know if your organization is doing well if there is nothing to compare it to? How will you know the things you need to improve? How will the organization grow? Every industry needs competition. It helps it grow and improve by constantly comparing themselves to each other therefore requiring them to strategize in order to be equal if not above others.
According to Michael E. Porter (1979) there are 5 (Five) possible events called Forces that will lead to formulating strategies. These are the following:
1. The threat of the entry of new competitors
2. The intensity of competitive rivalry
3. The threat of substitute products or services
4. The bargaining power of customers
5. The bargaining power of suppliers
An organization is confident without competitors. They feel that they are the best. But, with the entry of a new competitor, they will start to have second thoughts about being the best and will react accordingly. Our university is the biggest and the only university in town and in the province. It stands tall and proud at the age of 59.
For the past 59 years, there were other schools put up in the province but the university was unshaken probably because of the high barriers to entry mainly capital requirements and government policies plus the expected retaliation. Therefore, the risk for new entrants is low. But despite not having new competitors, the university continues to grow by competing with other universities outside the province. But then, whether the school is best or not, it is always the students and their parents who will decide where to enroll.
A better example of this is a suitor. An only suitor is pretty much confident of himself in winning a girl’s heart. The suitor will analyze where he stands. If he is good looking, rich with a clean reputation and he can see that the girl and her parents like him, the risk of the girl having another suitor and him having a competitor is low. So, he definitely has a high chance of being chosen. But if not, the risk of the girl having another suitor is high. When that happens the first suitor gets threatened by the new suitor or suitors creating a rivalry. In effect, the suitors will try to impress the girl more. They will think of different strategies to do better than the other (pabonggahan ug pasosyalay ug gifts etc. Naa pay magpasipsip sa parents ug barkada). When that happens, each of the suitors will have to analyze the expected retaliation of their rivals so that they can think of a more effective retaliation strategy. But, at the end of the day, it is always the girl who will decide who will win.
The intensity of the rivalry depends on the risk level, the number of competitors and the expected retaliation plus other added factors like substitute products and services and the bargaining power of the customer and the supplier.
Most parents or students will enroll their children or themselves in universities with lower tuition fees than those with high tuition fees proximity wise; the nearer the better. They may consider enrolling in far universities with high tuition fees if they see that the quality of education is more than what they pay for. Parents and students will consider universities that accept and offer a lot of scholarships, a lot of free services and those that will allow them to pay partial. The will consider a university where they can bargain (hangyuon ang tuition pati ang grades). Of course the university can always bargain back. They will agree with the bargain of the customers by giving fair conditions.
Relating back to the suitors, the intensity of the rivalry depends how many suitors will enter the scene. The more the merrier so they say. The girl now has power over all of them. She can now demand anything she wants but not to the extent that her suitors will give up on her and find someone new to woo instead. She will not be so pakipot because she is also threatened by the pretty girl that one of her suitors (the one she really likes) is starting to like. They also have bargaining power over each other. The suitor asks “Kelan mo ba ako sasagutin?” the girl answers “Pwede pag-isipan ko pa muna mabuti? Give me more time.” then the suitor says “Okay. Sana wag mo lang maxado tagalan baka mapagod ako maghintay.” (parang telenovela lang eh noh). The girl bargains for more time and the boy agrees but bargains for her not to take too long. That is what we call strategy. But then again, one strategy is not enough. What if the strategy failed? What if the strategy for the consequence failed as well? This is the time; the perfect time to realize that at the beginning of formulating strategies, there should be… a Backup Plan.
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