Business environment and strategic management - Essay Example

The period between 1990 and 2008 saw a series of activities which were steeped in several factors which include amongst other things; strategic drift, failure to adapt to dominant changes in the external environment, excessive focus on profit maximisation and the desire to hold on to corporate traditions rather than innovate to meet the changes. This paper examines the case of Kodak in relation to strategic management, change management, innovation and strategic responsiveness. It will use six theories to examine the case of Kodak and how it led to the eventual downward spiral of the company.

The paper will assess the shortfalls of Kodak in relation to Scenario Analysis, Cultural Web, Strategic Drift, Pascale's Excess Theory, Schumpeter's conception of Innovation and Marconi's model. Scenario Analysis “Scenario analysis involves a system of envisioning the movements in the markets by examining a series of possibilities in order to draw alternative plans to meet them.” (McKeown, 2006 p68). . In hat case, another business in the industry that got the variables right in its planning is likely to succeed in the industry ahead of the industry that failed to draw several plans and alter its operations.

Cooper cites the example of IBM (2005). In 1980, IBM was on top of the technology game. IBM was a leader in the manufacture and development of computer software and hardware. IBM envisioned in 1980 that by 1990, there would be a total of 275,000 computer users. And since IBM was the market leader, they believed that their estimation was absolute and precise. As such, the top level management which had a centralised system of management and control ensured that there were no deviations from the primary plan.

As such, IBM outsourced significant components of the manufacture of personal computers to Intel and Microsoft. IBM did this on the basis that there would be only 275,000 computer users in the coming decade. Due to that, they focused on other ventures and other manufacturing contracts in the technological industry that they thought was going to be more profitable. However, the number of computer users increased exponentially. By 1990, there were as many as 60 million personal computer users around the world.

This was enormously different from the figure they estimated in 1980. One may ask why IBM did not review their plans about the computer industry because the change was highly significant and if the management had their ears to the ground, they would have realized that things were changing and they would have made changes. Cooper identifies some key pointers that led to the downfall of IBM and they are all steeped in the failure to undertake