Strategic Management Theories : Designed Strategy And Emergent Strategy

‘Strategy is the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through it’

Strategy is a set of complicated tactics formulated by the executives of a company directed towards the achievement of company’s goal (Salmela, 2002). It is about all the path ways that a company would follow to reach its ultimate goal. It is a company’s strategy which helps to identify what it does better than the other companies in the industries, which may be different from what it does best. For successful strategy formulation and implementation, a company should know the needs of customers and should have knowledge of its competitors. Through a good strategy a company would identify that opportunity which makes it different from the others (Thompson, 2005).

According to Porter’s competitive forces model, exist five major forces, which managers should analyze, and strategies developed for the company to increase their competitive edge. They are the threat of entry of new competitors and of substitute products or services, the bargaining power of suppliers and customers (buyers), and the rivalry among existing firms in the industry.

Strategy is about which product or services should be produced and offered to which markets and which the customer needs and wants are met whilst achieving the objectives of the organization while making a profit – how each business aim to achieve its mission within its selected area of activity.

Harberber and Rieple (2008) define strategy as a set of intentional or inadvertent set of actions through which an organization develops the required set of resources, efficiently target valuable customers, meet financial targets and competes effectively. These strategic decisions drive the long-term direction of the organization, the scope of its activities, help gain advantage over competitors, and address changes in the business environment.

One of the world’s largest retailers operating in 12 different countries and with over 500,000 employees is Tesco PLC (Tesco, 2014). Tesco’s states their strategic priorities as to continue their investment in the strong UK businesses, establish a multichannel leadership and to pursue disciplined international growth (Tesco, 2014). In any company, strategy plays a key part in its success or failure and can be split into two types; intended and emergent. An intended approach is described as “a planned strategy designed at a senior level of management for the implementation at other organisational levels” (Witcher & Chau, 2014). Whereas the

Concept of strategy was first introduced in fifties in organisational literature by faculty of Harvard Business School (Snow & Hambrick, 1980). According to the definition given in Oxford dictionary, “Organizational Strategy are the plans of a large organization about development and dealing with changing markets. These plans must originate from company’s main objective which represents key feature about business of the company. For a strategy to work, it should be divided into smaller achievable targets (Johnson, 2016). One more definition of describes organizational strategy as an expression of how an organization needs to evolve over time to meet its objectives along with a

Porter (1980) created a model which considers five important forces (Porters five forces) which aims to establish a profitable and sustainable position against the forces that determine industry competition, therefore position themselves within it and differentiating themselves where necessary in order to strategically gain a competitive advantage - this model gives vision of: Threat of new entrants, Threat of substitute products or services, Bargaining power of customers , Bargaining power of suppliers and Intensity of competitive rivalry (Porter 1980). Using models and academic theory like this allows strategy to be formed through a rational and an analytical process. Chandlers (1962) cited in (Lomash 2003) suggests the analytical process is about the determination of long-term clear goals, adopting actions to achieve these goals and then building the resources within the organization around this strategy in order to ensure it succeeds. Johnson (2005), likewise, simply suggested a three step approach to strategy - analysis, choice and implementation which goes hand-in-hand with intended strategy.

An organisation’s strategy plays an important role of providing direction of where company wants to be and how best to allocate the company’s resources to meet its objectives. The formulation of business strategies has evolved over the years and has been made more difficult in recent by the uncertain operating environments and global financial crises.

Alfred Chandler(1963) defines strategy as ‘ the determination of the long-run goals and objectives of an enterprise and the adoption of courses of action of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals’. And Michael porter(1996) sees it as ‘Competitive strategy is about being different. It means deliberately choosing different set of activities to deliver a unique mix of value’.

Given the demands of today's competitive and dynamic environment, it is quite challenging to understand strategic issues facing organizations and develop the capability for long term organizational success. Introduction in today's dynamic and competitive business environment, survival, growth and profitability are the essence goals of all industries. Nowadays, Porter's Five Forces is currently being adopted as the powerful management tool of choice by many organizations. The essence of Porter's Five Forces is that it can help senior managers to make right decision and build and sustain competitive advantages in the organization

There is no exact definition for Strategy because it is defined in different ways as some people think that make a plan to get success in future is a strategy while others think that future is hard to predict. Exceptionally, some Japanese companies have no strategies though these companies have a good cost and continuous improvement. The definition for strategy is to explain the direction and scope of any company for the long term to achieve advantage for the company or to fulfill the needs and expectations. Strategy is different from Operational effectiveness and they work in different manner in the companies. Michael Porter, who is a professor at Harvard Business School and a strategy expert, says that it should determine how organizational resources and skills should create advantage. Accordingly, Strategy can also be defined as an organizational change during actions in the organizations for better and advantageous results or to determine how we win and get success in the future period. It is a needful developed plan with respect to market to compete the world. Organizations should be responsible for competitive changes according to the market. It is the main goal for any Organizations. Business/IT strategy is very important to know the success rate of your business. Apart from Business Strategy, the other two main types of strategy are Corporate Strategy and Team Strategy. These strategies give competitive advantage of cost leadership, differentiation and focus. The

Michael E. Porter, associate professor published the article titled “How Competitive Forces shape Strategy” in Harvard Business Review in 1979. This article is retitled as “The Five Competitive Forces That Shape Strategy” and published in Harvard Business Review in 2008. Michael E. Porter developed the model of Five Competitive Forces which is defined as “Competitive Strategy – Techniques for Analyzing Industries and Competitors”. It has become a main device for analyzing an organizations structure in strategic practices.

Strategy is all about planning the next moves, making decisions - how and where to move forward from the current position. In the past, strategy was associated mainly with the military sector, the top chiefs of command were making tactical choices in order to defeat their rivals and achieve victory. In the business sector the purpose of strategy is in principle the same, planning and building a road or path that will lead us to where ever it is we want to be in the future and to overcome all obstacles that might lay on the way. However, there is a difference between those two sectors, soldiers need only to follow orders without seeing or understanding the big picture, while in the

Johnson, Wittington, Scholes, Angwin and Regnér (2014, p. 3) defines strategy as ‘the long-term direction of an organisation’.