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What is strategy and its origin
What is Strategy? Michael E. Porter
What is Strategy? Michael E. Porter
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Question 1: Hayes and Wheelright (1984) and Mintzberg (1987) spoke of strategy as a pattern of decisions. What do they mean by this? (5 Marks) Strategy is the pattern of decisions determining the organization’s objectives, purposes, or goals. It outlines the principal policies and plans for achieving those goals, and clearly defines the range of businesses the organization has to pursue. Strategy as a pattern of decisions also highlights the nature of human and economic organization it intends to be, and the nature of the economic and noneconomic contribution it intends to make towards its stakeholders, mainly, the shareholders, customers, employees, and communities[1]. Mintzberg (1987), characterizing ten ‘schools of thought’ in his consideration …show more content…
According to Johnson and Scholes (2002), core competences ‘create and sustain the ability to meet the critical success factors of particular customer groups better than the providers in ways that are difficult to imitate’. Unlike other physical assets that a company may possess, core competence is an asset that only improves and enhances with its application in the organization. Therefore, it should be continuously applied and shared, and at the same time, fostered and safeguarded. Diversification decisions of organizations, along with market entry conditions, may be directed by the core competence as well. A few or even one core competence can give rise to an immensely diversified portfolio for an organization. For example, 3M identified the link between its substrates, adhesives, and coatings, resulting in products ranging from pressure sensitive tapes, to coated abrasives, to even “post-it” sticky …show more content…
Prahalad and Gary Hamel highlights that core competencies form the basis for competitive advantage in an organization, enabling it to introduce a variety of new products and services. Core competencies lead to core product development. Core products are not end user products but the products that would be used in order to make a large number of end user products. For example, Honda realized that their core competency lies in internal combustion engines, and therefore, their core product is engines which they use in all their products (cars, motorcycles, agriculture equipment). Thus, engines are key to their process focus. When the focus is core competencies rather than the product itself, the organization is able to grow with change in technology. For example, for a typewriter company, having the focus as typewriter is an imprudent decision because typewriter as a technology has faced out. As a result, the organization would have gone out of business too as its focus is the outcome of the business and not the core competency of the business. However, had the organization recognised its core competency and focussed on that instead, it would have survived the tide of
23), a strategy is competing differently using a set of actions to perform better over rivals and achieve greater profitability. It is about choosing to be different and making the correct choices to provide direction and guidance to employees and the company on what to do and what not to do.
Business strategy is a long-term plan of actions intended by the business to attain its set of goals or objectives. The business strategy states ways business conduct to achieve its desired goals at a certain period. It can also be defined as a roadmap that guides business to achieve and meet its set goals a certain period (Barney, 2006)
Wit, BD & Meyer, R 2010, Strategy: process, content, context : an international perspective, Cengage Learning EMEA, London.
It tells a layman business person or a person interested in setting up a business soon that a strategy is about planning for the future. It is to plan the future in a way that makes it easy for the managers to set up objectives and for the employees to follow those objectives (McKeown, 2012). The book gives examples of successful business persons and how they made their business strategy when they came into the business field. There are examples of people, who found success instantly, and there are also examples of business persons who struggled at first, but then after reshaping the strategy they were able to effectively conduct their business. It is very helpful for new entrepreneurs to know about these strategies so that they could also learn and implement it in their
The scope of this essay is to address coherently with examples a number of key areas of strategy; strategy and its importance, challenges in relation to development and implementation of strategies, and a discussion of the relevance of strategy in the modern
Thompson, A. A., Strickland, A. J., & Gamble, J. E. (2008). Crafting & executing strategy: The quest for competitive advantage (16th ed.). New York: McGraw-Hill Irwin.
The first portion of the novel is centered on understanding the essence of strategy. The understanding strategy, according to the author, is derived from truly comprehending what strategy
Many theorists (Lynch, 2003, Mintzberg, 1990, Ansoff, 1991) will argue that the two main schools of strategic planning are the prescriptive, also known as intended, and emergent approaches. Both are debated widely about which is the better approach; recognised best by Idenburg (1993). Prescriptive strategies focus on planning; where predictions of the future are made, leading to long term decisions where the main elements of the strategy have been specially planned before being commenced and as stated by Mintzberg, 1990 "Strategy formation should be a controlled, conscious process of thought". The emergent approach relies on the fact that the outcome of the objective is not known; in contradiction to the prescriptive approach it is not a 'controlled, conscious process of thought' and has been described by Downs, et al (2003) as a trial and error process. The importance of strategy within organisations has been discussed as early as the 1950's with ...
Operations management strategies play an important role in any organization to achieve organizational goals. An organization uses these operations strategies to maintain and control all its operations...
Organizations can be configured in many different ways. Their overall classifications can be summarized by characteristics of complexity within the system, the level of formalization, and the centralization of decision-making power. The structure of each organization is influenced by many factors. Such factors include; the goods and services provided, the overall individuality of the staff providing the service and producing the products. The overall beliefs and values of the individuals performing the services that are being delivered, the technology that is utilized to help deliver the services and aid in product production, as well as the needs, desires, and generalized characteristics of the consumer population that requires or demand the product or service. (Yoder-Wise, 2007, p. 145) The organization will have different operating priorities based on its ownership. The main goal behind most business is to make money. The private owned institution strives to make its shareholders money, while a non-profit institution reinvests all of its revenue back into the orga...
John G. S., 2008: Strategically thinking about the subject of Strategy [e-journal] 9(4) p.2 Available through:
As it were, Strategy management is the procedure of indicating an association's goals, creating strategies and arrangements to accomplish these destinations, and apportioning assets in order to execute the arrangements. It is
There are different types of strategic planning that are currently in use, since this is a widely debated area of management. However, it is concluded that there are two main schools of thought, the prescriptive approach or the emergent approach (Lynch, 2012). As defined by Lynch, (2012) prescriptive strategic planning is the term given to a strategy whereby the objective of the strategy is defined in advance and the main elements are designed and develop...
A successful business strategy will identify changes in the external trends in the market place. Plan out what the company’s future direction is. Set out the goals for the management team. It will identify a vision of where the company wants to be in the future. Keep all employees informed of the direction of the company.
Strategy formulation is the process of establishing the firm's mission, goals, and choosing among alternative strategies or plans; it involves and implies that preparing the best approach to respond to the circumstances of a firm's environment, whether or not its conditions are known in advance; being strategic and tactical, then, means being clear about the management's aims; being aware of the company's resources, and incorporating both into being consciously responsive to a dynamic environment (SM, 2010). As nearly all businesses have limited resources, top leaders and management must determine which alternative plans or strategies will do well to the organization most; strategic management requires attention to the big picture and the motivation to adapt to circumstances, and consists of the following aspects: