What I Didn't Learn in Business School: How Strategy Works in the Real World - Book Report/Review Example

How Strategy Works in the Real World Affiliation How Strategy Works in the Real World Human interactions and office politics are some of the factors that interfere with decision-making processes yet many strategies and concept taught in schools do not emphasize on them. There are various lessons learned from Justins experience as noted in the novel because of the many assumptions in the classrooms (Barney, & Clifford, 2010). In the real world, the outcomes are different especially for various projects and owners need to ask a number of questions such as whether the strategy is valuable or not. The other question is whether the product is rare, the strategy can be imitated, or whether the firm can organize and implement the strategy. To answer the questions, a number of lessons can be learned, which involves understanding of the Porter’s five forces, value chain analysis, and the Resource Based view. The Porter’s five forces define the external factors that affect businesses, which business managers and consultants like Justin should put into consideration (Porter, 2008). Justin experienced many challenges since he thought that whatever he learned in class was enough for running a big organization. Some of the issues Justin should bear in his mind before making any decisions are the supplier power on the products such as differentiation and the volume of the inputs required for the manufacture of the plastics shirts. The presence of other substitute’s inputs and the total cost of the purchases are important in rating the profitability of the business. The other force of concern is the threat of new entrants into the market that can bring competition especially in the supply of inputs, and access to the distribution of the inputs as asserted by Porter (2008). Others are the government policies concerning the venture and the capital required to start the plastic business. Justin and his team must also have in mind the benefits from the investments in terms of economies of scale. The threat of substitutes for the plastics is another issue that should be of concern to consultants such as Justin and his team. The team should ask questions such as whether there are substitutes for the bulletproof vests or building materials resistant to earthquakes. Buyer power and their bargaining power should be an issue of concern especially the buyer volume that can determine their sales and profit margins (Porter, 2008). The other issues that were not handled in class and are important are the brand identity and product differentiation in the real sense. The degree of rivalries such as exit barriers, industry concentration, industry growth switching costs, and value added costs are important considerations for the team as they make real decisions as consultants. Justin faced challenges of determining whether the plastic wear invention was valuable as some members such as Tucker thinks that it will lead to losses amounting to billions. If the team uses the Porters five forces, they will finally determine the profitability and viability of their business idea. Another lesson learned from the novel is the importance of value chain analysis that helps to identify ways of creating value of products for the customers (Rabelo, Eskandari, Shaalan & Helal, 2007). The value analysis will improve the teams spirit especially if the idea or the venture is profitable. Justin and his team face a big challenge in analyzing the profitability of the plastic clothing business especially noting that the uniform will be the white color. They hold very many meetings to discuss the alternative use of plastiwear to increase profits. The Resource Based Vew analysis is a thorough approach to assess a company’s strengths by examining the available assets (Newbert, 2007). The other analysis is on the sources of financial capital, physical capital and any resource that can support a business venture. The lessons from the novel in which Justin and his team are concerned with the venture involving the plastic clothing and construction materials is that some ventures require a lot of resources to start and run. In the real world, there will be many challenges especially acquiring enough materials and equipment for any project. The organizational and human level factors that are obstacles to some strategy frameworks are individual motives, personal interests, stakeholder interests, and political behavior (Amit, & Schoemaker, 2012). The individual motive may hinder the implementation of certain projects as some of the members mandated to implement the project may have negative motives such as diverting the business idea for their benefit. Some may also have the motive of failing the project out of jealousy or other perceptions such as thinking that the project is not viable. In Justin’s case, Albright had the idea of expanding the use of plastics but did not want the innovation to leak out. The stakeholders’ interests can also be obstacles to establishing a new venture especially if they fear that the venture might lead to losses. In the case involving Justin and his team, the stakeholders have some interest in the plastiwear although they agree that a rigorous analysis is necessary especially through collaborating with manufacturers. The company executive of the HGS is not decided what to do with the idea of the new product, but they later accepted all the recommendations (Barney, & Clifford, 2010). They must also establish where plastiwear fits within HGS and create a new plastiwear division for the project. Finally, the political behavior in the country where the project is to be set can be an obstacle to innovators and investors. Politics determines the nature of investments by setting laws and regulations governing new businesses. Navigating through three challenges as noted in the novel can be difficult but I will ensure that I incorporate the principles of Porter’s five forces to analyze the viability of the venture. Investigating any existing competitors especially the ones interested with a similar idea will be one priority as it will enable me to draw concrete conclusions on the matter. Analyzing the available resources for the company would give some light on the practicability of the business project, as it requires huge capital to start. Discouragement from a team member is one the worst experience and to navigate through them one needs courage and patience (Barney, & Clifford, 2010). I would, therefore, discard any form of discouragement and concentrate on the analysis of the project to come up with the best results concerning the project. From the novel strategy in the plan was chosen to bring the desired results for the future of an organization such as the plastiwear project for the HGS Company. The strategy enables one to come up with a solution to a problem by using resources effectively. The company selected a team to do a thorough investigation on the viability of the new project and give recommendations on the way forward. The strategy involves a lot of work by the team with many challenges before coming up with the concrete conclusion on the workability of the projects according to Harris and Rae (2010). The challenges faced by a team while strategizing on a particular project include discouragement by some members, lack of cooperation from some executives and stakeholders, and inadequate knowledge and experience on the project. Classroom lessons are very different from the real live experiences in the business world as demonstrated in the novel. Justin had a lot of classroom knowledge but realized that it was different with the real world. The theories learned in the classroom cannot address the challenges faced in business organizations and requires a lot of commitment and brainstorming to apply in the real life situation. In real life, the process may not be an easy task as there may be very many obstacles in analyzing the practicability of the ideas. Some obstacles such as lack of cooperation by the consulting tea, the organization stakeholders, and other people with their personal interests are common. The team working on a new idea can take several days to accomplish a task on establishing and investing on an idea. References Amit, R., & Schoemaker, P. J. (2012). Strategic assets and organizational rent. Strategische Managementtheorie, 14, 325. Barney, J., & Clifford, T. (2010). What I didnt learn in business school. Boston: Harvard Business Review Press. Harris, L., & Rae, A. (2010). The online connection: transforming marketing strategy for small businesses. Journal Of Business Strategy, 31(2), 4-12. doi:10.1108/02756661011025017 Newbert, S. L. (2007). Empirical research on the resource‐based view of the firm: an assessment and suggestions for future research. Strategic management journal, 28(2), 121-146. Porter, M. E. (2008). The five competitive forces that shape strategy. Porter, M. E. (2008). Competitive strategy: Techniques for analyzing industries and competitors. Simon and Schuster. Rabelo, L., Eskandari, H., Shaalan, T., & Helal, M. (2007). Value chain analysis using hybrid simulation and AHP. International Journal of Production Economics, 105(2), 536-547. Read More