Financial Strategy Essay Example | Topics and Well Written Essays - 1500 words

Financial Strategy - Essay Example Thus, a risk-conscious enterprise already has strategic plans in hand to handle any sort of crises prior to its happening and furthermore, it would inculcate such strategies in its daily working environment which would minimize any foreseen risks so as to avoid danger. To begin with a theoretical point of view a firm that does not prioritize and foresee danger points in the ongoing business lacks the power to cope up with any kind of transformation that a potential risk may bring in the long run. It might overrate its focus upon other profit-making strategies than making alternative strategically workable plans to overcome those risks (Ackermann, pp.5-6, 2008). As a matter of fact, potential risks that big firms and organizations may face are divided into three categories which include hazard risks, operating risks and financial risks (Slywotzky, 2007). The case of Toyota is quite obvious in this regards. In the 90s, though the company enjoyed a very good position and had a well know n repute in the eyes of its consumers with leverage over other competitors, they worried about what future could bring to them since; a period of maturity never lives very long. The foreseeing ability of potential threats of the company made the executives plan for the first ever car of the 21st century by Toyota even a decade ago. They penned down unique characteristics of any comfortable car ever and assigned an engineer, who had never worked for a whole new developmental project, to transform the ideas into concrete proposal. The Japanese automaker lived up to its promises when it launched its breakthrough car Prius in the 90s. The strategy was to lend three years to the task force of the new car to analyze each aspect of the internal working of Toyota and to have the company’s first hand knowledge to produce the new generation of the model. This move worked a lot and the assigned engineer made his team from the most talented engineers whose ages reflected maturity yet eag erness in adaptability. The idea was to introduce hybrid engine in the newly-designed car. Nevertheless, the potential risk was that the competitors were experimenting the same sort of experiments. Assessing the risks, Toyota decided to make their breakthrough as fast as possible so as to be ahead of all (Slywotzky, 2007). One crucial move that Toyota took was to bring the Resident Engineers (REs) during the phase of design development who usually work at the manufacturing plants to take care of the problems that arise in the production stage. This move was taken so as to avoid any possible fault that is probable to happen in a stage where everything is in blueprint. One more strategy that it employed was to create alternative options with regards to engine design and the overall car design so that they may end up choosing one which proves to be the best among all. During the whole process, cross-referencing of the experts continued to be taking place to implement the best given ide a in the making (Slywotzky, 2007). Consequently, the world knows how Prius took over the market in a few period of time. In theory, the Competitive Strategy Theory by Michael Porter talks about certain focus points to be made and implemented by any firm to achieve a sustainable ground in any market in the absence of which the company is prone to serious losses. A firm’s risk consciousness is quite visible if it emphasizes upon planning for ‘differentiation, overall cost leadership and focus’