Strategy Intent - Essay Example

Topic:  Strategy Intent Hitt, Ireland, and Hoskisson (1995 developed a strategic leadership model which included six important parts, ly deciding strategic direction; leveraging from core competencies; developing human resource; developing an effective corporate culture; ethical practices; and strategic management (Hagen et al. 1998). Interestingly, Hamilton et al. (2002) have discussed the difference between strategic intent and core capability, the two concepts discussed by Prahalad and Hamel (1990) and Hamel and Prahalad (1989) by applying them on auto industry to show how the graphic depiction of an industry and competitor behavior impacts the strategic plans on the competition platform. The concept of “strategic intent” was propounded by Hamel and Prahalad in 1989, which produced rippled effect in the galleries of corporate and strategic management. The over ambition of companies to succeed in all departments of business made them obsessed with the concept of global leadership irrespective of their capabilities; Hamel and Prahalad had given a different name to this desire of corporations to lead worldwide as “strategic intent”. Different conglomerates phrased their strategic intent like Komatsu gave the title “Encircle Caterpillar”, Canon initiated “Beat Xerox”. All these titles show the strategic intent of the companies. Interesting thing perceived in the description of the term by Hamel and Prahalad is elaborating the concept through examples of such companies having a strategic intent. Another important element of the concept is that it is a continuous active management process by corporations with the intention and focus straight on the winning spirit by inspiring employees for attaining targets by communicating with them; it is creating the stimulus for emotional and intellectual exercise to prepare for the future. A comparison between the strategic architecture that Prahalad and Hamel (1990) have discussed in ‘The Core Competence of the Corporation’ with the strategic intent by Hamel and Prahalad (1989) becomes natural. The strategic architecture on the one hand adds new functionalities, new competencies, transformation in current competencies and restructuring of communication with customers while strategic intent is symbolic of the heart of the components of strategic management of corporations. It enlarges to meet the challenges within limited available resources and capabilities. For getting competitive advantage managers are trying different strategies and go to the extent of partnering with competitors even, if the other strategies don’t produce result. Managers imitate the strategies adopted by successful companies but don’t succeed in their quest to succeed by getting competitive advantage. Notions like “strategic fit”, “generic strategies” and “strategic hierarchy” have affected the process of competition. According to Hamel and Prahalad, the actual risk to a company is from its strategic orthodoxies than from its financially sound competitors. A company can get advantage from the marginal improvement brought through effective functioning (Hamel & Prahalad 1989). Prahalad and Hamel (1990) have substantiated the concept of strategic intent by quoting the example of NEC, which showed an inclination to leverage from the convergence of computing and communications, called “C&C”, through strategic intent. Focus of the managers was on gaining competencies, specifically in the business of semi-conductors. By following a suitable “strategic architecture”, the company exhibited its design to the outside world. By constructing coordination groups and committees, the C&C developed core competencies and core products in collaboration with other business partners. It opened varied doors of opportunities through attained competence for different segments of company businesses. The three features of strategic intent as described by Hamel and Prahalad (1989) are direction, discovery and destiny. The strategic intent provides a feeling of specific direction for a long term market or competitive role play a company aspires and strives for in the future. It creates a sense of discovery through differentiation for attaining new territories. Strategic intent provides an emotional aspect of carrying the workforce along to attain the goal of the company, which becomes crucial to achieve by the employees (Hamel & Prahalad 1989). The process of strategic intent takes a start with the three features of direction, discovery and destiny. Next in line is the zeroing on the challenges communicated to the employees to charge their batteries for achieving the strategic intent as happened in the case of Komatsu. The strategic intent for Komatsu was to “Encircle Caterpillar” and for Canon “Beat Xerox”. Next in the process of strategic intent comes empowerment. It means involving each and everyone in the accomplishment of the task by initiating an upward communication process to identify intelligence scattered throughout the organization structure (Hamel & Prahalad 1989). The Japanese corporations proved their mettle in strategic management by showing their strategic intent through ambitions, which were regarded unrealistic by their western counterparts for lack of resources and capabilities to lead globally. There was an obsession to defeat the competitors at all level, kept alive throughout the organisation to lead the world market in the future (Hamel & Prahalad 1989). Any strategic analysis is incomplete without analysing the competitors’ strategic intent, current strategy and competitors’ primary strengths and weaknesses. For example in the automobile market for understanding strategy there is the case of Toyota that has been leading in the United States market. The big question is whether Toyota would be in the leading position or not in the next 10 years and how would its competitors, the GM and Ford, perform; it depends on the strategic intent besides the strengths and weaknesses of the competitor companies (Ireland et al. 2008). Getting at the strategic intent requires leverage from resources and capabilities to create a vision. When a company reads through the strategic intent of its competitor, it can foretell the reaction of the rival company against a competitive action (Ireland et al. 2008). In the case of Komatsu’s encircling of Caterpillar, Komatsu run many medium term programmes to identify the weak areas of Caterpillar to develop specific advantages. Caterpillar showed aggression to Komatsu in the Japanese market where its hold was strong. Komatsu reacted first by improving on quality, then reduced costs, found new markets and worked on new product development (Hamel & Prahalad 1989). Companies with strategic intent don’t measure their success in terms of shareholders’ wealth; global leadership is supreme in the view of top management having a strategic intent. Employees high on achieving company mission would not leave any stone unturned in accepting big challenges like “Beat Benz”; it has the motivation because there is a strategic intent to achieve the goal of leaving the market and world leading company behind but there is no challenge in increasing shareholders’ wealth by middle management and other employees (Hamel & Prahalad 1989). Companies depending on markets for profits react aggressively to attacks on their market hold. Strategic intent of companies can be evaluated from such features as market hold as well. Taking the example of Boeing, not dependent on commercial aircraft business as it used to be earlier, it has diversified into other segments reducing its dependence on commercial aircraft manufacturing. It can help the competitor company Airbus to compete with Boeing in the commercial aircraft business successfully as it knows the strategic intent of Boeing is not on commercial aircraft manufacturing (Ireland et al. 2008). Companies focusing on strategic planning than on strategic intent need to be realistic in approach knowing their potential to become the leader. Further it is seen that the vision of the company does not remain the focus of its employees if nothing significant appears on the board. When a company’s vision gets blurred, strategic intent helps in polishing it and showing to all concerned the means of realising the vision through strategic intent in their routine business functions. Going ahead of all the competitors could be a first step to realise the vision. For that a company needs to focus on the needs of customers and the company to defeat competitors in all areas of performance. A strategic intent should inspire the workforce into energetic mode taking the whole organisation in its stride (Alagse 2010). The path to global leadership through strategic intent is not accidental and chaotic; it is a directional process of entrepreneurship. In stead of top management, innovation plays a lead role placing companies on a higher platform of leadership. In strategic intent, ends are sure but means could be different. It is involving the whole set of people of a company by top management for achieving competitive advantage (Hamel & Prahalad 1989). Certain conditions hold value for the realisation of strategic intent like creating a sense of emergency, maintaining continuous competitor focus via competitive intelligence, updating employees’ skills and breather time in between a line of challenges (Hamel & Prahalad 1989). Strategic intent fits the bill by helping planners and others in clarifying and realising the vision of a company. It runs the marathon in short races by beating the competitors at specific intervals keeping the long term vision in view. Competitive factors crucial for customers and the company should get priority for defeating the rival companies. It instills a feeling of inspiration by charging them emotionally to follow a strategic theme (Alagse 2010). Any concept if not implemented wisely by the top management can sieve out the benefits. Points of strength for the strategic intent need to be reinforced by the top management and weak areas should be supported continuously at all junctions of the long journey towards a future of sustaining leadership status in the long run. References Alagse, 2010. Strategic intent is about clarity, focus and inspiration’, Alagse, viewed 10 November 2010, . Hagen, Abdalla F., Hassan, Morsheda T. & Amin, Sammy G., 1998. ‘Critical strategic leadership components: an empirical investigation’, SAM Advanced Management Journal, vol. 63, viewed 10 November 2010, . Hamel, Gary and Prahalad, C.K. 1989 ‘Strategic intent’, Harvard Business Review. Hamilton, Robert D., Eskin, D. & Michaelsb, Max P., 1998. ‘Assessing competitors: the gap between strategic intent and core capability’. Long Range Planning, 31(3), pp. 406-417, viewed 10 November 2010, . Ireland, R. Duane., Hoskisson, Robert E. & Hitt, Michael A., 2008. Understanding business strategy: concepts and cases. Cengage Learnin,. 57, viewed 10 November 2010, . Prahalad, C.K. & Hamel, Gary 1990 The core competence of the corporation’, Harvard Business Review. Read More