Strategies for Competitive Advantage - Case Study Example

1 Introduction It is well established that companies devise strategies for competitive advantage (Porter M.E. 1985). Strategies are made by Leadersand may or may not involve others in their formulation depending on the type and size of business. Implementation however encompasses all employees. As a thumb rule the smaller the firm size and the least competitive environment calls for higher dictatorial policies by the owner or leader. Current complex social, business and political environments need more deft handling and indeed the old Machiavellian theories of the state are as relevant to modern industry as they were 500 years ago. Whereas the earlier playing field was politics, government and fiefdom, the current stage is one of business and industry. The new science of management is no different from the old art of governance Mintzberg (1998) has described that rational process of analysis and planning takes a backseat and hard bargaining is the ploy used by corporate elites for obtaining strategic and tactical advantages. It is exercise of raw power that moves and prevails on decisions. Indeed the icons of industry are becoming cult figures and are aggrandized as the new architects of strategy. These leaders and managers who engage in strategy are closely involved in directing resources towards organizational goals that they have set. They use innovative technologies and make impact on society and its norms. Strategies In an earlier article Mintzberg and Winters (1985) have described five kinds of strategies deployed by leaders. They have named their models as, emergent, intended, deliberate, realized and unrealized. It is logically explained that the emergent strategy is a response to an opportunity and is a highly localized event. The intended one is more rationalized and a result of specific situations that require specific planning. The deliberate strategy is an extension of intended ones but more broadly conceived as a process that will result in either creating new strategies or will be able to face new challenges. The realized strategy is the culmination of the final deliberate strategy and the unrealized is the one that emerges as a different strategy when meeting new challenges. In fact these five strategies as the spectrum that demonstrates the two extremes and what lies between them when strategies are planned and are useful to the extent that they show the intensity of the strategy evolution process. However the authors say that there are still several types of strategies that lie between these extremes. 1. The Planned Strategy – The environment that allows the development of such a strategy is usually well defined and unlikely to be disturbed. Under such stable conditions it is possible to plan ahead for longer periods and the plans themselves can be elaborate. There is no real fear of sudden or unforeseen changes hence the Leaders are very dictatorial and do not seek collaborative efforts from their team or subordinates. Such can be the case of monopolistic companies or those that are controlled by the State. 2. Entrepreneurial Strategy – Where the organization is smaller and is envisioned by an individual, the strategy becomes entrepreneurial. Here too the Leader formulates the strategy and expects others to follow it but there is flexibility in his approach and he is willing to accept environmental changes and the advice of his colleagues. 3. Ideological Strategy – When a vision is shared by many and a collective decision is made this strategy seems to be the most appropriate. This can be attributed to State controlled organizations where the political will of the leaders set the policy. This is very much like the Planned strategy except that this envisages and reacts to the environmental changes. 4. Umbrella Strategy – This is really the strategy where the Leader recognizes that the components or divisions of the organization need to be independent of each other and still be in a collaborative mode to work towards a common objective. A large organization like the railroad company is a good example. It had divisions that design and manufacture the system that has to work in an entrepreneurial way; a marketing division that has to think of the competition; a Human resources division that has to meet the diversified requirements of different divisions; a finance division that has to manage colossal requirements and devise revenue models for each of them. Each division needs to formulate its own strategies to contribute to the organizational efficiency and yet the objective for all is the strategy devised by the Leader for both profit and service. This is the most perfect case for the intended as well as emergent strategy described earlier by Mintzberg and Winters (1985). 5. Process Strategy – This too is a mixture of both intended and emergent strategies and continuing with the above example of a railroad the similarities are obvious. Here the divisions are following process of their own while targeting their resources and capabilities to achieve the vision of the organization. 6. Unconnected Strategy – As the name suggest these are strategies suggested by members of the organization from time to time when they feel that they can contribute to the organization’s welfare. These are emergent strategies that are a product of the perspective of individuals. This has been very well exploited by Whirlpool who has created an Innovations division that invites employees to suggest improvements in products. 7. Consensus Strategy – As opposed to the earlier case these are strategies thought out and proposed by large sections of the organization and deserve a more careful review by the Leader as they represent a deliberate and emergent strategy that cannot be easily ignored. This strategy has been used very successfully at Semco (Brazil) where the entire management is by consensus and the business has been democratized by its chairman Ricardo Semler. 8. Imposed Strategy – This is extreme kind of deliberate and emergent strategy that comes out of regulatory control. Most recent examples are that of regulations imposed by regulatory authorities in all nations by mobile regulators about their rates, performance and services. The mobile companies have to adjust themselves to such rules and devise their marketing strategies in conformance. Conclusion Strategies by nature have to be a product of circumstances. That they differ in a variety of ways has been examined by the authors in a variety of ways. However the literature is awash with several variations depending on the perception of the authors. It may be useful to examine the strategies of various organizations, both for profit and non-profit ones. However this is mostly historical, an after fact review, that at best can be an example for some others to follow, avoid or adapt with variations. Yet the same strategy may not work out in exactly the same way for any two organizations in the same sphere or field of work. There will undoubtedly be different environments, external as well as internal, to contend with. The human element has enough diversity that leaders at the helm of two competitive organizations will not think alike. It is therefore dangerous to label the strategies in the manner that has been suggested by Mintzberg and Winters and impose them on organizations. Their usefulness lies in the understanding of the nature of strategies and what causes their evolution. There is no doubting the fact that in future even more strategies will be evolved as the human mind scales new heights and, much like innovations, new types of strategies will be evolved to tackle new situations. Bibliography Porter, M. E. (1985). Competitive Strategy. New York: The Free Press. Mintzberg, H. (1998). The Rise and Fall of Strategic Planning. New York: Free Press Read More