Strategy as a Planned Process Essay

1885 Words8 Pages
When talking about strategy, most people simply associate it with a long term direction and plan. In fact, the components and development of strategy are far more diversified and complicated than people normally imaged. In this essay, by an review and evaluation of different approaches to strategy, it critically discuss the current debates of different approaches and discuss whether the definition of Chandler(1962) is appropriate to apply to the organization today. Within 1960-1980,the planning approach from the business historian Chandler(1962), and the organizations like , consulting group Mc Kinsey and BCG has significantly reflected in the definition of Chandler (1962). Chandler (1962) formed a formal approach called Multi-divisional…show more content…
Within 1980-90s, The direction of the approaches has changed from corporative planning to strategic thinking with competitive advantage, a way to focus on the performance and profitability. The reason behind is that the unstable economic environment such as the growing influences of Asian markets and oil price rise issues force the need of the competitive advantage. In the view of Michael Porter(1980, 1985), it is essential to define the attractiveness of industries and sectors, their potential changes, successful strategic groups, valuable market segments, threats and opportunities in the marketplace. Through Porter Five Force analysis, it can reflect that how external factors including suppliers, customers, new entrants and threat of substitute affect company competitiveness in the long term, which can be seen as another form of external analysis and thus adopt to the course of action. On the other hand, another approach called Resources-based view ( Prahalad and Hamel , 1990,Grand 1991) ,which lay stress on the internal analysis of the firm to achieve competitive advantages rather than focusing on external environment. Resources-Based View takes the view that managers can completely understand the kinds of resources that can generate sustained strategic advantages through evaluating the full range of resources the firm may possess, and then
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