Essay on The Concept of Strategy and Strategic Management

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THE CONCEPT OF STRATEGY AND STRATEGIC MANAGEMENT
G. Tyge Payne, PhD

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Strategic Management
Strategy: The unifying theme that gives coherence and direction to the decisions of an organization Strategic Management: Consisting of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages. Or, the Strategic Management Process is: The full set of commitments, decisions, and actions required for a firm to create value and earn aboveaverage returns. (Hitt, Hoskinson, & Ireland, 2004, p. 4)
Strategic Management basically seeks to answer the question:

How and why do some firms outperform others?
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Other Definitions of Strategy
Oxford Dictionary: The art of war, especially …show more content…
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BCG’s Growth-Share Matrix
High Share High Growth Star Low Share Question Mark

?

Slow Growth

Cash Cow

Bark!!

Dog

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In St tend ra ed teg y

Forms of Strategy
Mintzberg’s Critique of Formal Strategic Planning: Mintzberg’s Critique of Formal Strategic Planning: •The fallacy of prediction ––the future is •The fallacy of prediction the future is unknown unknown •The fallacy of detachment -- impossible to •The fallacy of detachment -- impossible to divorce formulation from implementation divorce formulation from implementation •The fallacy of formalization --inhibits flexibility, •The fallacy of formalization --inhibits flexibility, spontaneity, intuition and learning. spontaneity, intuition and learning.

De lib era te S

tra teg y

Unrealized Strategy

Realized Strategy

Emergent Strategy

**Normally emergent strategy comes from learning and dissemination within the organization.
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Porter’s Generic Strategies
Competitive Advantage Lower Cost Differentiation
Strategy 1 Strategy 22 Strategy

Broad Target Competitive Scope Narrow Target

Cost Leadership
Strategy 3A Strategy 3A

Differentiation Differentiation

Strategy 3B Strategy 3B

Cost Focus Cost Focus

Differentiation Differentiation Focus Focus

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Why is SM, as a field of study, necessary? Why are all these theories/tools needed ?
• • • • • • • •

Provides a framework for thinking about the “business”
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