CURRENT READINGS IN ADVANCE MANAGEMENT Assignment On

Summary puzzle

of

Strategy

as

situational

Course facilitator: ALAM.M SHAHEER Submitted By: JALAL AHMAD Class: (3s) Section:
1

MBA

Class id:

19

HOW THE FIRMS SEARCH THEIR STRATEGIC COMPONOENTS?

There is a lot of research work regarding the strategic components of the firm. I am going to explore some of them by explaining the components. 1. FIRMS RESOURCES All the assets, capabilities, firm features, the knowhow etc which is in the control of the firm & allows the firm to make strategies. This resource based strategies enhance the performance of firm effectively & efficiently. The resources are sort out into three categories as: Physical capital Human capital Organizational capital

2. THE CONCEPT OF HAVING & DOING

This concept is based on having (what the firm owns) & Doing (what the firm do). Having means the assets of the firm i.e. plant, building, machinery etc & doing mean the skills of the firm like smart assembly of cars than a competitor.

3. THE RESOURCES & THE CAPABILITIES

The package of available attributes which are in ownership & control of the firm is called resources. The firm uses these resources as an input in their production process.

Capabilities are different from firm to firm. How firms use the resources in their processes are actually their capabilities. Simply, the firm uses these resources to produce an effective desired end. Capabilities may be manufacturing flexibility, highly reliable service etc.

4. The Invisible & Intangible ones

Invisible assets are information based resources or capabilities which are difficult to gather & they are multiply used in input & output business activities i.e. consumer trust, brand image etc. They are the long term fuel for long term success. Intangible assets include intellectual property rights, trade secrets etc.

5. STRATEGIC ASSETS
Strategic should be something which provides the ground base for giving the competitive advantage to the firm i.e. brand name, retail location etc so firm strategic assets should have power of strategic competitive advantage. Strategic assets can be defined through these four things. a) They are valuable in a sense that they can utilize opportunities & negate threats. b) They are uncommon among firm competitors. c) They cant be imitated. d) There substitute dont exist.

ALL PURPOSE STRATEGIC ASSETS

All those capabilities which a firm use / deploy in different situations like firm culture, firm reputation, financial resources etc.

SITUATION BOUND ASSETS

These assets can be used in specific situations. It may be like efficient personal relationship with some authoritative body, specific technical knowledge etc.

THE INTERNAL FIT OF STRATEGIC ASSETS

Internal fit is the degree of interdependence or mutual convenience between strategic assets. If all the assets are working together than this synergy can provide the superiority in performance. Along with the action of this synergy, operating variables should be kept in mind. As profit potential depends upon both the availability of strategic assets along with daily operating variables i.e. product availability, advertising campaigns etc.

THE SITUATIONAL FIT OF STRATEGIC ASSETS

The link of strategic assets with external elements is termed as situational fit. It is classified into strategic field & the fit with time factor. THE FIT OF ASSETS WITH A STRATEGIC FIELD If firm is able to identify its underlying capabilities & they can utilize all those abilities in processes & actions than firm like that can grow because they are the Capabilities predator. The capabilities predator can compete in various regions, products & businesses. In short, they are fit for all sorts of situations. Strategic field of a firm is the boundary in which the firm can serve & strategy is the response of the firm to some sensed existing or expected strategic field. Strategy can be made after knowing the strategic field then the firm will think about their own capabilities so the field may help us to improve our operations. The initiation of strategic reflections will be based on the perception of individual managers not necessarily in the mind of the top management. In case of large corporations, high variation in the strategic actions is based on positions of individual initiating managers. Sometime the need of a central strategy arise because of diverse actions taken against different situations, this strategy may be called the mission statement of the organization. it include aim of the corporation & the field in which this aim is to be achieved. These mission statements are not supporting the firm because they are not clear & for long period of time. Simply speaking, mission statement can motivate some personnel, employees etc but it cant direct the firm to respond like that. Lower level mangers can find out the opportunities if they are willing & have competence in the field. The top management may utilize the expertise of lower managers in finding fields & core competencies. In searching competencies, if we go specific then we cant build new competencies & if we go general then we are damaging our competitive position. In nutshell, a firm strategy should be based on the fit between strategic assets & perceived strategic situations. The strategic assets will generate value if they are suitable for the external situation.

THE FIT OF STRATEGIC ASSETS WITH TIME

Strategy move constant because of the turbulent strategic field so strategic assets cant be utilized before knowing the exact situation in the strategic field. Strategy processes may be fragmented,

evolutionary & largely sensitive so according to this an organization strategy cant be for long term objectives & it misfit the organization mission. Strategic assets are both situation & time bound & they are appropriate for situation & time when they are used. The formation of proximate objectives is a central phenomenon in the strategy process. Strategy is to be considered as a dynamic short term oriented situational assembly. Strategy is used for short term because in long term there is higher probability of variations i.e. increased uncertainty & level of ignorance can result in failure. Firms can be successful if they identify, support, rearrange & use strategic assets in response to opportunities.

STRATEGY AS A SITUATIONAL PUZZLE

All sort of situations are brought together by the strategic actors based on their perceptions so their perception may be true or false. That is why we call strategy formulation a puzzle game. It means the fit of strategic assets to some situation is essentially a function of the perception of committed actors of the organization. The success in this puzzle game is based upon the experience of those actors. Using the puzzle concept, we say that puzzle patterns constantly change with changing situations so flexibility should be there.