What Is Strategy? Management Essay Example

Published: 2019-10-17
What Is Strategy? Management Essay Example
Categories: Strategy Strategic management
Pages: 5
Wordcount: 1210 words
11 min read

Some of the posts assertions can be agreed to while others can be refuted. I agree with the post as strategy entails meeting the needs of the market and fulfilling the expectations of the stakeholders via the configuration of resources, and this, as per the post, include the activities required to create, produce, sell and deliver their products or services, such as calling on customers, assembling final product, and training employees. These activities have to be harnessed together to achieve operational effectiveness thereby guaranteeing competitive advantage, which the post clearly articulates that the business has to perform similar activities better compared to the competitors to achieve an edge. I would add to the post that operational effectiveness increases the quality of products

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On the other hand, I do not agree that todays businesses have slowly embraced managerial techniques to achieve competitive advantage. In essence, most of the businesses have utilized both to achieve competitive advantage. For instance, big companies, for example, Walmart, Coca-Cola, and PepsiCo, have their senior management staff highly qualified on aspects of management, as well as the use of one or more strategies. For instance, Walmart capitalizes on a low-cost strategy to obtain world dominance in the retailing industry; its management is very strong, featuring solid policies, and values that are strongly encapsulated in a well-defined organizational structure and culture. These managerial aspects combined with strategy are what organizations call strategic management.

Also, I agree with the assertion that strategy comes from three main sources, needs-based positioning, variety-based positioning, and access-based positioning. In addition, as per the post, organizational strategy comes with a trade-off between one strategy and the other meaning that more of one thing necessitates less of another. I find this assertion false because companies have found ways of adopting a hybrid strategy where two strategies are harnessed together, particularly low-cost and differentiation strategy.

Five Forces Which Shape Strategy

I totally agree with the post because these five forces will shape a companys strategy based on the prevailing market conditions. In essence, a company, as the post points out, can capitalize on direct rivals, but also four other competitive forces as well: customers, suppliers, potential entrants and substitute products to shape its strategy. Essentially, the five forces analysis is vital for any business as it enables it to identify the forces that affect the level of competition within a specific industry and capitalize on these aspects to increase the profitability of the business.

The post did overlook various factors. For instance, the barriers of entry are numerous while the post mentioned just a few. As such, to add to the article, other barriers include the network effect where firms that are already established have a huge clientele network, switching costs, customer loyalty, access to distribution, economies of scale, as well as product differentiation. These aspects will bar new entrants in the market. Other factors that can be considered on threat of substitutes include quality depreciation, buyer switching costs and propensity to substitutes, as well as substandard products. Other aspects that can be considered as a threat of bargaining power of buyers include information availability, price sensitivity, buyer concentration to business concentration, as well as the degree of dependency of the existing distribution channels. In addition to the articulated factors pertaining to the bargaining power of suppliers, other factors worth consideration include employee labor unions, the strength of the distribution channel, and also, supplier concentration to firm concentration ratios. These aspects will determine the bargaining power of the business and the supplier; hence, determine the cost of raw materials. On aspects of industry rivalry, factors that were not pointed out in the post include the degree of transparency, as well as advertising and marketing input.

Building Your Companys Vision

I agree with the posts assertions that for a company to be successful, it needs to adopt core values and core purposes that are fixed in the long term while the business practices and strategies have to change to adapt to changing business environment. In essence, I agree, as per the post that the, core ideology and envisioned future together provide both the foundation and the direction for an organization. Pertaining to the core ideologies, they need to be timeless. For this reason, I agree with the assertion that the core ideology defines the enduring character of an organization--a consistent identity that transcends product or market life cycles, technological breakthroughs, management fads, and individual leaders.

Since the core ideology is timeless, it builds upon core purpose and values, which do not change over the long-term; they set upon the envisioned future of the company. However, since the envisioned future specifies where the company should be in about ten to thirty years, the article did not point out the need of setting the organizational mission and objectives to guide the firm to the future. This aspect is missed in the article, and thus, the post does not overlook aspects of the organization, such as goals and objectives required in meeting the long-term. Importantly, something which should be added include the fact that goals should be specific, measurable, achievable, realistic, and time-bound. Additionally, an aspect that should be incorporated in the article is that leaders should be visionary and have the skills to guide all the organizational members into achieving the 0-to-30 year Big Hairy Audacious Goal (BHAG) goals.

Bad Strategy

I agree with the post that four aspects characterize a bad strategy according to Richard Rumelt. These are fluff, failure to face the challenge, confusing goal setting with strategy, and having bad strategic objectives. Even though the post did not overlook aspects that lead to poor strategizing, it is important to point out that the post was limited. In essence, there are various aspects that can be added to what characterizes a bad strategy. For instance, bad strategy grows out of leadership dysfunctions and specific misconceptions. For instance, a poor board of directors will lead to poor strategizing, therefore leading to bad strategy and failure. However, a good and experienced board can still make bad strategies, via what I agreed in the post, specifically fluff, which as the article points out is the use of flowery statements that do not have any futuristic strategy for the company. Therefore, firms should hire competent boards, which calls for firing and avoiding boards that are incapable and immature. However, there should be an aspect of freedom of action at all times, which guarantees that the leaders will formulate the strategies that yield positive results in future.

In addition, the post did not overlook aspects of a good strategy which includes the inclusion of three elements. These are: diagnosing the situation, having a choice to determine and adopt a guiding policy, and designing coherent action. The post should have stated that these elements differentiate a good strategy from a bad one. Also, it is important that the post should have noted that the key difference between a good and a bad strategy is that a good strategy will always acknowledge the existence of challenges and how to overcome them. As such, despite pointing out what defines a bad strategy, the article could have been more helpful and insightful if it considered the parameters that need to be set in formulating good strategies.

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