What Business Strategy Is - Example

I. Introduction This section defines what business strategy is and how important it is to organizations. Business strategy serves as the tool that aids organizations in getting to their goals. As business processes become more complex, employing the most reliable and comprehensive business processes help organizations reach their goals and objectives. However, different situations call for different strategies and different strategies work on different companies. This paper evaluates the possible business strategies that General Electric can use in order to strengthen its position in the market and expand its profitability. II. Four Schools of Strategy All the existing business strategies can be categorized into four major classifications. Each major classification has its own advantage and disadvantage. Gaining deeper insights on the working principles of each strategy allows organizations to use them to their advantage. Understanding which combination of principles work best in every situation encountered is the key for successful A. Strategy as a Rational Thought Rational thought process is an important element for organizations particularly when it comes to handling data and information. Organizations create plans based on the previous and current data and information available to them. Then they perform careful steps that would ensure that their plans are carried out. The more accurate the data represents the concern of organizations, the more likely organizations would be able to draw conclusive evidences on the steps that must be taken. This strategic approach on planning and decision making is referred to as the approach of strategy as a rational thought. This section will discuss all the principles of strategy as a rational thought as well as provide examples of the common strategies under this school of thought. B. Strategy as Revolution This school of thought alienates itself from the rational thought approach on making strategic decisions. It does not conform to the rigidity of the strategic planning process based on the available information but rather introduced the idea that organizations must create their own paths and breakthroughs in order to succeed in their industries. In order to achieve this, this school of thought proposed that organizations must look for ways to outdo well-established industry leaders by creating and developing new processes that have not yet been implemented anywhere. For example, Dell was able to challenge huge companies like IBM and HP by offering made-to-order laptop which employs the just-in-time principle, lowering its inventory and increasing its profitability. This section will evaluate the view of strategy as a revolution by citing relevant materials and examples of the management practices involved in this school of strategy. C. Strategy as Resource Allocation and Accumulation in the Firm This approach on business strategy confronts the building blocks of decision making which is mainly about accumulating resources and allocating them in the organization. This view asserts that the economic exchanges taking place within the organization is central to its success more than the external environment where the organization exists. The concepts that are essential to resource-based view are resources (the input of the firm’s production process) and capabilities (the capacity of the firm to achieve results given the allocated resources) and the interplay of these two factors determine the viability of success for the organization. This part of the paper will discuss the importance of resource-based view in strategic management of organizations. D. Strategy as Technology Leadership With the boom of technological growth and development, companies are seriously considering investing into research and development on new technologies to be able to differentiate themselves from the competition. Those who were not able to create new technologies maneuver their businesses to align to the technologies others have created. More often than not, those who were able to produce and market new technologies reap the fruits of success. This segment will explore all the management strategies that employ leadership in technology to the firm’s advantage. III. Comparison and Contrast This section will focus on establishing the evidences of the key arguments presented in the introductory part of the paper. All the advantages and disadvantages of the four schools of strategy will be discussed thoroughly in this section. Various real-life examples will be cited and analyzed to establish conclusive evidences on the strengths and weaknesses and the applicability of the principles of each schools. This section will also devote an analysis on how these principles are applied in various operations and management practices of General Electric. An analysis of the effectiveness in applying the principles of these four schools of strategy to General Electric’s previous and present issues will be provided as well in order to assess the most effective strategy mix for the organization. IV. Conclusion and Recommendation This part of the paper reiterates the importance of each school of strategy (whenever applicable) on General Electric’s previous and current positions, as was established in the previous section. Conclusive data and information will be linked together to form summative conclusions on the subject under study. A recommendation of the future strategic steps based on the discussion will be provided as well. Annotated Bibliography Brown, D. & Meier, R. (2005). Industrial Technology Program Enhancement: The Importance of Strategic Planning. National Association of Industrial Technology. Volume 21, Number 4. Accessed on May 5, 2009 from  http://www.nait.org/jit/Articles/brown100405.pdf This article discusses in detail while organizations in the technology industry need to use strategic planning to move forward. It investigates how the Hoshin process is successfully applied in industrial setting and what are the elements of this management approach that can be used in real-world strategic plans. Chan-Kim, W., & Mauborgne, R. (1999). Creating New Market Space. Harvard Business Review. January to February 1999. Reprint 99105. Accessed on May 5, 2009 from http://www.pageout.net/user/www/t/h/thorne/creating%20new%20market%20space.pdf As the title suggests, this article focuses on the importance of innovation in creating new market leaders. It discussed how organizations suffer from stagnation when they conform to orthodox management processes and when they follow the lead of industry giants. At the same time, it pursues the notion that success in the industries dominated by well-established giants can only be achieved by revolutionary means. Duke, Jon, Jordan, Andy, & Powell, Bob. (2008). Integration of Technology into Institutional Strategy Studies. Joint Information Systems Committee. December 31, 208. Accessed on May 5, 2009 from http://www.jisc.ac.uk/publications/documents/strategicdevelopmentfinalreport.aspx This research study employs cross-section analysis on the perception of senior leaders when it comes to employing technology in business strategies. The paper explored how UK-based managers of companies and government offices create their strategic plans and attempt to explain why technology was not among the most primary elements that are factored in during strategic management processes. Hamel, Gary. (1996). Strategy as Revolution. Harvard Business Review. July to August 1996. Reprint 96045. Accessed on May 5, 2009 from http://my.execpc.com/~jpurtell/HBR-StrategyasRevolution.pdf This article provides a bird’s-eye view of the principles in strategy as revolution. It provides honest criticism on the principles employed in strategy as a rational thought by refuting the unrealistic approach made during strategic planning process. It describes the processes that must be employed by business organizations seriously considering taking the lead in their industries. Imai, Masaki. (n.d). Look at your Company from Outside-in as well as from Inside Out. Accessed on May 5, 2009 from http://www.1000ventures.com/business_guide/mgmt_stategic_resource-based.html This is a short online article that collates all the information about Resrouce-Based View (RBV) and gives serious (although brief) discussion on why companies must consider its resources to succeed. This article also provides various links on related concepts like SWOT, Economic Rent, and on the disadvantages of Porter’s Five Factor Analysis. Kotelnikov, V. (n.d). Developing a Technology Strategy. Accessed on May 5, 2009 from http://www.1000ventures.com/business_guide/im_tech_strategy.html This brief article discusses the importance of technology in making strategic decisions and actions. This article provides very basic discussions on technological drives of organizations and how organizations can actually profit from it. Links on various online articles about technology strategy are also provided. Lagase, Martha. (2006). What Really Drives Your Strategy? Q & A with Joseph L. Bower and Clark Gilbert. Harvard Business School. Accessed on May 5, 2009 from http://hbswk.hbs.edu/item/5157.html This article is an interview of the authors Joseph Bower and Clark Gilbert detailing how organizations move forward by appropriately allocating existing resources into the different functions of the organization and creating means to acquire new ones. Lockett, Andy. & Thompson,Steve. 2001. The Resource-Based View and Economics. Journal of Management. November 01, 2001. Accessed on May 5, 2009 from http://www.accessmylibrary.com/coms2/summary_0286-27278923_ITM This article provides technical discussion on the economics associated with the resource-based view of corporate strategies. Its technical treatment on the subject is essential in the discussion of resource-based view on corporate strategy. QuickMBA. (2007). The Strategic Planning Process. Strategic Management. Accessed on May 5, 2009 from http://www.quickmba.com/strategy/strategic-planning/ The basic steps in creating strategic plans are discussed in this brief article. Its discussion include the definition of mission and objectives, environmental scan, strategy formulation, strategy implementation, and evaluation and control. Rachlin, Howard. (2003).Rational Thought and Rational Behavior: A Review of Bounded Rationality. An Adaptive Toolbox. Journal of Experimental Analysis of Behavior. 79, 409-412 Accessed on May 5, 2009 from http://seab.envmed.rochester.edu/jeab/articles/2003/jeab-79-03-0409.pdf The author of this article critically reviews Herbert Simons’ psychological review about the heuristic rule of thumb in making rational decisions in bounded realities of the adaptive toolboxes. By comparing the long and tedious process rational decisions take with the usually fast and reliable requirements in making real-life decisions, Rachlin was able to The concepts and principles discussed in this brief article provide wealthy information about how organizations rationally decide on the issues they face considering that there are certain “rewards and punishments” associated with their decisions. References Buchanan, Brett. December 28, 2008. Strategy as Revolution: Competing by Breaking the Rules – A Case in the Beverage Industry. NMSI Forum. Accessed on May 5, 2009 from http://strategy.lefora.com/2008/12/30/strategy-as-revolution-competing-by-breaking-the-r/page1/ Child, J. (1972). Organisation Structure, Environment and Performance. Sociology, 6, 1-21 Gilligan, Ed. May 4, 2009. The Right Way to Manage Surprises. Conversation Starter. Harvard Business Publishing. Accessed on May 5, 2009 from http://blogs.harvardbusiness.org/cs/2009/05/how_to_deal_with_surprises.html?cm_re=homepage-041409-_-body-middle-tert-_-voices Hamel, Gary. January 1998. Strategy Innovation and the Quest for Value. Corporate Strategy. Accessed on May 5, 2009 from http://sloanreview.mit.edu/the-magazine/articles/1998/winter/3921/strategy-innovation-and-the-quest-for-value/ Johnson, G. & Scholes, K. 1998. Exploring Techniques of Analysis and Evaluation in Strategic Management. Prentice Hall. Meyer, Christopher. 1997. Relentless Growth: How Silicon Valley Innovation Strategies can Work in your Business. Free Press. Porter, Michael. 1997. How Competitive Forces Shape Strategy. Harvard Business Review. July to August 1997. Accessed on May 5, 2009 from http://my.execpc.com/~jpurtell/HBR-HowCompetitiveForcesShapeStrategy.pdf Preece, Stephen. 1995. Incorporating International Strategic Alliance into Overall Firm Strategy: A Typology of Six Managerial Objectives. John Wiley & Sons. Sirower, Mark. 2007. The Synergy Trap. Simon & Schuster Adult Publishing Group Spender, JC. 2007. Philosophy of Science and Strategic Organization. Academy of Management. Accessed on May 5, 2009 from http://www.jcspender.com/uploads/PHILOSOPHY_OF_SCIENCE_AND_STRATEGY_AoM_2007_v1.pdf Read More