« Previous | Contents | Next »
Listen
INTRODUCTION, BACKGROUND AND METHODOLOGY
Introduction
This research seeks to obtain a better understanding of the factors which can influence a firm's product market strategy and how product market and competitive strategies influence the ways in which employers use the skills of their workforce. It also seeks to explore how these factors which stem from the business strategy relate to others such as technology and labour supply issues in affecting the utilisation of skills. The term 'product market strategy' is used to refer to the ways in which firms position their products or services in the market in relation to their competitors. 'Competitive strategy' refers to the ways in which employers chose to combine their resources, including the skills of their employees, to secure a competitive advantage in the market.
The report is based on 32 detailed case studies with employers in five key sectors. This approach provides the necessary level of investigative detail. But it does mean that the scope for generalisation of results is limited as there is no basis for drawing conclusions about all employers or all sectors.
The case study research was completed towards the end of 2008. At the time of completion of the fieldwork, the impact of the economic downturn was only just beginning to be felt.
Background and Methodology
The approach adopted is based on a theory (Ashton & Sung, 2006) 1 which highlighted two separate but related strands of analysis, the first of which concerns the nature of product market structures and how these impact on the product market and competitive strategies of companies. This strand suggested starting the research with those agencies which could help identify the nature of product markets and the competitive strategies adopted by firms within them. For this information representatives of professional bodies, trade associations and the Sector Skills Councils, government industry specialists and literature sources were consulted. This provided the quickest method by which to identify current issues and trends within each sector. Additionally, this provided insights into the potential conditions and constraints that would impact on employers' product market strategies. It was this part of the research that provided an insight into the way that government and its agencies, as well as market forces, might influence the firm's product market strategy.
The second strand of the theory concerned the ways in which a firm's competitive strategy impacts on the use of skills and how other factors also influence the ways in which the firm uses the skills of its labour force, the type of technology they use, the institutions which structure the supply of skills (colleges, universities etc) as well as regulations which affect the ways in which skills are determined and used in the workplace. Here again government has influence over some of these factors, e.g. the supply of skills, the structuring of skills through the use of certification schemes and so on. However, this government influence was found to be variable between firms and especially between sectors.
For the second strand of the research a case study approach was adopted as the most appropriate method by which to gather sufficient detail around individual firms' product market strategies and the links to their skill needs. While it is recognised that such an approach precludes generalisations about all companies and all sectors it does provide fresh insights into the overall debate about the links between product market structures and skills utilisation by companies.
The sectors chosen were closely related to five of the Scottish Government's key sectors. There were:
- Creative, Performing Arts and Heritage;
- Energy and Utilities;
- Financial Services;
- Food & Drink; and
- Hotels.
The companies used in the case studies were identified through a combination of sources, including the strand one interviews with those who had expert knowledge of product markets, participants in previous research sponsored by Futureskills Scotland and searches undertaken as part of this research. The employers approached included those who had recently changed their product market strategies as well as those who had not. While some employers that were approached declined, in general, the level of co-operation and willingness to participate shown by employers was encouraging.
Interviews typically lasted from one to two hours. There were follow-up and repeat interviews where necessary. Most interviews were conducted on a face-to-face basis, although some smaller firms in remote areas were interviewed by telephone.
The purpose of the interviews was to identify the factors which were shaping each organisation's competitive strategy and the utilisation of its workforce's skills. For this reason interviews were semi-structured to allow interviewees to identify the issues they felt to be important.
Outputs
This report summarises the main findings. The full report is also available from www.futureskillsscotland.org.uk
The Presentation of Findings
The theory also informs the presentation of this summary. For each sector an overview of the industry, its product market, and the structure of the labour force is presented. Following this the areas where government action may influence product market relationships and, through that, the strategies of individual firms are highlighted. These are presented in summary form under the sub-heading 'Scope for Influence'. The findings from the case studies, which are concerned with the ways in which employers utilisation of skills is affected by their competitive strategies and other factors, are presented in summary form under the heading 'Issues Relating to the Supply and Utilisation of Skills'.
The report then explores the importance of sector differences in structuring employers' product market strategies and in constraining employers' market behaviour. These sector differences are also evident in the ways in which employers utilise the skills of their work force. However, there are no invariant relationships within the sectors between their product market strategies and utilisation of skills. Rather, this relationship is mediated by employers' competitive strategies which they control.
« Previous | Contents | Next »