How to Win in a World of Relentless Change - Case Study Example

? Strategic Leadership in a Changing World By Insert Presented to Location Due Introduction Michael Porter and Gary Hamel are notable scholars who contributed greatly in regard to the strategic management approaches. The approaches mainly dealt with the portfolio, growth resource. Their studies and the theories that they provided focused mainly on the impact of the marketing strategies mainly on the markets (Kelly 1998). The paradox of the market of the markets was that the high market share companies and the low market share companies were considered most profitable while those between the demarcations were not. This problem largely known as “hole in the middle” problem in the study and the theories provided by Garry Hamel and Michael Porter tries to explain this phenomena existing in the markets (Baker 2005). The approaches and perspective of the two strategic management strategy theorists enhanced the management diversifications in organizations. This mainly required the adoption of new techniques and new ways of thinking taking into consideration the changing marketing and the level of the competition in the various markets (Schindehutte 2008). Garry Hamel approach in regard to the paradox of markets is the adoption of the marketing management strategy that was more interactive and active. From this approach he asserts that in the management of competition in the markets as well as the maximum utilization of resources the aspect of strategic architecture and strategic intent must be introduced. This provided the importance of managers and organizational leaders in regard to competence (song Cho 2000). The two concepts also gave and hint on how it can perform better in terms of competitive advantage in contrast with other companies the market. Michael porter in regard to the paradox of the market was the introduction of the various concepts notably the five forces analysis and the generic strategies (Kelly 1998). The detailed interaction process underlying this was that there was need for the organizational management and leaders to enhance the following. First is to enhance minimization of costs, focus on the market strategies where a company or organization operates and finally enhance product differentiation strategies (McGivern 1997). Michael Porter Approach on Market Paradox Michael porter approach on the market paradox in regard to the markets and resources is based entirely on the organizations or the firm’s competitive nature. He asserts that the dynamism and the change in the markets is increasingly becoming a major area of concern to the economic theorist, practitioners and policy makers (Baker 2005). Therefore Michael porter gives and explanation regarding this on a re source based perspective and the market process economics (McGivern 1997). The two porter’s perspective gives explanation on the similarities and the relations which is important in the evaluation of the dynamics and the changes on the market behavior (Kelly 1998). Porters approach is considered popular in regard to this because of its clarity, feasibility and the complementarities of the resource based perspective and the market process economics. This approach is generally convenient in the explanation of the markets changes in its competitiveness as well as its strategies (Porter 2000). The question in this context is how firms and companies compete in the various markets and what the strategies that leaders and managers adopt. Porter asserts that there is need for the firms and management teams to understand the individual competitiveness as it this facilitates the formulation of policies concerning competition (Hamel 2012). These policies and the underlying strategies are essential in providing necessary support in developing markets and effective utilizing of resources (Schindehutte 2008). Therefore is addressing the issue of market paradox Porter focuses mainly on the identification of the most successful strategies that a firm in a market can adopt. Porter provides a number of generic strategies that firms needs to pursue in order to perform better than their competitors who have not adopted such strategies (Porter 2000). The strategies that Porter proposes include the cost leadership which involves minimization of costs, leadership characterized with focus and finally differentiation (Hax 2009). All of these strategies are integrated in the underlying resource based perspective and the market process economics (Michalet 1997) .this attribute has rendered Porters approach on market paradox becoming popular notably in regard to its aggregate level analysis (Baker 2005). Resource-Based Perspective Underlying this, porter provides that firms in various markets vary in terms of efficiency attributed by the competitive advantage considering the acquired and the endowment of resources. The concept of the market and the firm’s equilibrium is utilized for the definition and the understanding of the firms or organizational competitive advantage. Under this Porter provides the underlying strategies to include the following. First of all is that a firms resources has to be adequately heterogeneous so as to address the efficiency differences, the resources has to be ex ante economical which implies that the discounted value at the present should be lower than the current price. He also provides that firm’s resources have not to be perfectly mobile across the firms (Leibold 2007). Market Process Economics In regard to this Porter provides that the aspects of market perfect competition as well as the competitive behavior are incompatible. Explaining the firm’s competitive behavior he asserts competitive advantage is realized from the subjective perception of the profit opportunities. Other explanations include leadership coordination of the learning and knowledge and finally the exploitation of uncertainty (Kelly 1998). Taking this into consideration it becomes easy to evaluate the firm competitive advantage in a given market and the market behavior for the achievement of effective competitive advantage. In general this porters approach regarding resources and markets underlying a firm basically tries to explain the competitive behavior and the market dynamics. This forms the basis in which firms develop the various strategies and the way in which they make into use the competitive advantage. Garry Hamel Approach on Market Paradox Garry Hamel approach in regard to the market paradox is based on the management innovation strategies. Hamel asserts that it is only through management innovation that firms and companies can sustain themselves in the competitive markets. According to this approach the strategic management of firms should conform to the future considerations of the firm (Keen 2008). Hamel asserts that an organization needs to change their way of doing their operations. This approach further emphasize on managers to engage the management innovation in their business operations as well as addressing the market situations and dynamics, this implies that there was a need to redefine the roles of managers and their leadership skills. This strategy comprise of various concepts which includes emotion, analytical skills and business risk management (Teece 1994). Garry Hamel future management strategy In this approach focus is laid on the company or the business future which comprises of the individual business as well as the business world markets and dynamics. This perspective has become useful in the explanation of market paradox which is highly attributed to uncertainties (Lowson 2002). Hamel asserts that most of the firms and organizations have failed to define their future due to lack of “get ahead of the game thinking” which analyses what is to come in all the underlying avenues. The strategy provides the visualization of the existing and the potential new markets that the company or organization can exploit (Keen 2008). This is followed by the evaluation and determining the company ability to enter into the markets taking into accounts the level of competition and the competitive advantage of the company. There is also the need to take advantage of the existing and the new developments in the field of technology (Hax 2009). In general the Hamel’s perspective management of the organizational future depends on the management strategies as provided by the managers and the management teams (Teece 1994). It can be argued that Hamel perspective involves evaluations of the firm or organization, market behavior in addition to the notable trends. These strategies are the core pillars in the implementation and the development of a company or a firm that is able to make viable decisions for the successful future of the firm or an organization (Gibbert 2010). Factors Influencing Choice of strategic Management Approach Strategic leaders in the organization are basically the managers and the management teams. Therefore managers act as the leaders in any organization and they are responsible for the strategic planning and inventors. In regard to the above discussed strategic management approaches managers are required to make decisions in order to ensure that they adopt appropriate and suitable approach (Leibold 2007). Therefore managers need to take into consideration various factors in regard to this selection (Nijssen 2000). The chosen perspective needs needs to be a business strategy that in conformity with the nature of the business operations. Effective managers will ensure that they engage the underlying determining factors to ensure that the strategy is in conformity with the business or the firm’s goals and objectives. The factors which influence the selection between Michael Porter approach and Garry Hamel can be discussed as follows. Corporate Evolution Corporate evolution comprises of all the dynamics and changes in the organizational trends as well as the corporate world in general. It is notable that the ability of the organization to evolve its models of management is the major pillar towards the achievement of organizational success (Montgomery 1991). Strategic leaders need to adopt strategies that are likely to conform to the corporate evolution needs of the organization. Garry Hamel approach is suitable for a corporate evolution which is characterized with a management model aimed for innovation (Keen 2008). This approach will ensure that the organizations create efficiency and reliability. Organizations which needs to develop and build corporate evolutionary advantage will prefer to adopt Michael porter approach. This approach is essential for building competitive advantage which is essential in the adoption of new technologies, ways of communication and business preferences (Bosch 1997). Nature of the Organization Depending on the nature of the business operations strategic leaders needs to adopt management strategies that are inflexible to their assets. This calls for the adoption of flexible mental models which are aimed to provide a positive change in the organization (Hamel 2010). Taking into consideration the speed thus the strategic approach to be adopted by a strategic leader notably a manager should be a smart mover (Teece 1994). The strategic leader should ensure that the adopted approach can be implemented very fast as compared with the market competitors (Hamel 1996). Market and innovation Innovation and the nature of the market in which an organizations operates determines to a greater extent the management models and strategies adopted by the organizations. Strategic leaders should adopt the management models that have the power to change customer expectations, competition basis and the overall industry economics (Keen 2008). In regard the two underlying perspectives, strategic leaders should ensure that they determine how risky the model before they adopt. Conclusion In conclusion the strategic management models provided by the two strategic management theorists bear various similarities in the achievement of the company or the organizational goals and objectives. It is notable that Michael Porter model of strategic management is based on the competitive advantage and its sustainability. On the other hand Garry Hamel model focuses on the innovativeness and the future management strategies of an organization. Therefore it can be asserted that the adoption any of these strategies depend on the organizational managerial requirements. It is the role of the manager as a strategic leader to determine which strategic management model is suitable and appropriate for the success of the firm or the organization. References Baker, W. E, 2005, Market Orientation and the New Product Paradox, Journal of Product Innovation Management, 483–502. Bosch, F. A, 1997, Perspectives on Strategy: Contributions of Michael E. Porter, New York: Springer. Edwin J. Nijssen, R. T, 2000, Creating Customer Value Through Strategic Marketing Planning: A Management Approach, New York: Springer. Gary Hamel, P. P, 1996, Competing for the Future. Harvard: Harvard Business Press, Gibbert, M, 2010, Generalizing About Uniqueness An Essay on an Apparent Paradox in the Resource-Based View, Journal of Management Inquiry, 349-372. Hamel, G, 2010, Strategic Intent, Harvard: Harvard Business Press. Hamel, G, 2010,What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation, New York: John Wiley & Sons. Hamel, G, 2012, What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovatio, New York: John Wiley & Sons. Hax, A. C, 2009, The Delta Model: Reinventing Your Business Strategy, Boston: Springer. Joe Kelly, L. K, 1998, An Existential-Systems Approach to Managing Organizations, Chicago: Greenwood Publishing Group. Lowson, R, 2002, Strategic Operations Management: The New Competitive Advantage, London: Routledge. Marius Leibold, G. J, 2007,Strategic Management in the Knowledge Economy, New York: John Wiley & Sons. McGivern, M. H, 1997, Determinants of organizational performance, Management Decision, 417 - 435. Michalet, C. A, 1997, Strategies of Multinationals and Competition for Foreign Direct Investment: The Opening of Central and Eastern Europe, New York: World Bank Publications. Montgomery, C. A, 1991,Strategy: Seeking and Securing Competitive Advantage, Harvard: Harvard Business Press. Peter G. W. Keen, H. G, 2008, Decision Enhancement Services: Rehearsing the Future for Decisions That Matter, Amsterdam: IOS Press. Porter, M. E, 2000, Location, Competition, and Economic Development: Local Clusters in a Global Economy, Economic Development Quarterly, 15-34. Schindehutte, M, 2008, Understanding Market-Driving Behavior: The Role of Entrepreneurship, Journal of Small Business Management, 4–26. Teece, Dm ,1994, The Dynamic Capabilities of Firms: an Introduction, Oxford Journals of Industrial and Corporate Change, 537-556. Tong-song Cho, H.-C. M, 2000, From Adam Smith to Michael Porter: Evolution of Competitiveness Theory, London: World Scientific. Read More