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Turbulence Enviroment - Essay Example

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Marketing 2 September 2011 Turbulence Environment for Five Cities H. Igor Ansoff is regarded as the father of strategic management. He propounded the theory of turbulence environment to help firms remain competitive and profitable in the long-term in varying environments, from stable to highly volatile…
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Turbulence Enviroment
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He put his concept into practice when he was a planning expert in the late 1950s at Lockheed Aircraft Corp., in the United States. He wrote several books, including Corporate Strategies, through which he spread his theory across the academia and the business world. In his last book, Strategic Management, he expanded the concept of turbulence environment to organizations outside business. 2. Concept Ansoff suggested, “for a firm to optimize its competitiveness and profitability, it has to match its strategy and supporting capability with the environment” (as quoted in Pun, n.pag.) He believed that if a company becomes purely self-serving, it soon loses track of its direction and dies; so a firm should commit it to understand the political and social fabric of a community for long-term profitability (Williams, n. pag.). Ansoff classified the environment into five categories: Repetitive, Expanding, Changing, Discontinuous and Surpriseful. These environments require stable, reactive, anticipatory, entrepreneurial and creative strategic response respectively (Pun, n. pag.). Organizational measures also differ in each environment. The higher the turbulence, the greater would be the need for innovation. In the repetitive environment, for instance, firms do not change their products and services, and hierarchical and highly structured. At the other end of the continuum, in the surpriseful environment, firms must develop new products and services using cutting-edge innovation in technology and methods and be flexible in their structure to remain competitive and profitable. The other environments fall in-between, requiring progressively improved products and services and flexible organization. 3. Turbulence Environment Scale for Cities The concept of turbulence environment can be used in a variety of settings. Ansoff had first used it for business firms. Later he elaborated it to be applicable to individuals, groups, political processes, etc. The Asian Development Bank has used it to help Asian cities develop transportation management to address the need of growing population and reduce congestion, accidents, greenhouse gas emission, and transportation cost with varying success (8). The turbulence environment scale can be devised in different ways. Ansoff himself has used a scale having one four environments -- stable, reactive, anticipatory and exploring environments -- in respect to budget, predictability, frequency, response time, novelty, turbulence level, and applicable forecasting technology (69). Pun has used it with all five turbulence environments and strategic and institutional response to them (n. pag.). Here we look at the following five cities in the United States having more than 100,000 population in 2007 (Boston.com, n. pag.) and their housing requirements. The population increase of these cities varies creating different levels of turbulence. We have taken only one product for the sake of simplicity to illustrate different levels of turbulence and strategies to address them. Population Increase and Housing Strategy (2000-2007) (Note: Figures for population increase taken from www.boston.com) The figure shows five cities from one having a stable population (Garden Grove) to one whose population increased by 83.6 percent (North Los Vegas) in seven years. The higher the increase in population, the larger the need for creative solutions to house the additional people. Garden Grove can handle its Read More
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