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Birmingham Business School

Student ID Number: 1971322

Programme of Study: Msc International Business management

Module: International Business Strategy

Assignment Title: A critique of Strategic management

Date and Time of Submission: 14/03/2109; 5.15 pm (SGT)

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INTRODUCTION
In the words of Alfred Chandler, strategy is defined as ‘The determination of the basic, long-
term goals and objectives of an enterprise, and the adoption of courses of action and the
allocation of resources necessary for those goals’ (Chandler, 1962).
Strategy helps the company to achieve its long term goals. It is the process in which the
opportunities are discerned and transformed into successful outcomes. The objectives should
be translatable and we should define an effective way to achieve those goals with the use of
available resources to which one can access.

LEVELS OF STARTEGY:
Strategy exists in three main levels corporate strategy, business strategy and operational
strategy. Corporate level strategy is concerned with the development of the whole
organization and how it benefits the organization as a whole. Business level strategy is how
an individual business makes itself unique in their particular markets. Operational level
strategy is concerned with how the element of an organization effectively delivers the
corporate and business level strategy in terms of availability of resources, process and people
(Johnson, et al., 2017).

STRATEGIC THINKING:
Strategy involves thinking in two different ways vertical thinking and lateral thinking. The
former is concerned with the convergent problems that are those with one solution and the
later is concerned with divergent problems that are those with many possible solutions.
Strategy requires creativity is r for lateral thinking and rationality for vertical thinking.
Strategy is a tool which connects vision and operational effectiveness in recognising that
vision. A good strategy leads to successful management (Colin, 2004).

STRATEGIC MANAGEMENT:
“The management or system that links strategic planning and decision making with the day to
day business of operational management” (Gluck, 1982).
It is a system of identifying the changes in the functional elements of an organization and
measuring the performance of the organization with respect to its vision. Strategic
management is the execution of the strategic plan, measurement of the performance of the
organization and evaluation of the results. The senior leadership of an organization is
completely responsible to execute and implement the strategic decisions of an organization.
The process strategy is persistent. It is not a sudden or a one- time event. The leader who is in
responsible for the decisions in the organization should be a strategic thinker and should
bring the changes in the company or organization whenever necessary. The knowledge that
an organisation gains while application of the strategy brings the organization even more
closer to the vision and goal of the organization. With each update of the strategic plan,
senior leaders will become better able to deploy the plan, implement changes, and measure
organizational performance (Wells, 2000).

EFFECTIVE STRATEGY:
An effective strategy should be deeply understood and shared by the organization. The
strategy can be effectively executed only when the employees of the organization understand
the strategic plan. The people in the organization should be capable of taking their own
decisions with respect to the strategic plan of the organization. The strategy should be
flexible enough to adapt any changes in the future. Whenever there is a variation in the
market place the organization will react to that change. Hence an effective strategy should be
flexible and adaptable to that change. The strategy will be more effective if it arises from a
group of diverse thinkers. Whenever there is a discussion or debate or argument between the
people with differing mindset the solution or strategy arises from this type of discussion will
be more effective. An effective strategy analyses both external and internal environment. The
strategy must understand the competitors, suppliers, demand which forms the external
environment and weakness strength of the organization which is the internal environment of
the organization. An effective strategy will identify its competitive advantage. The strategy
should make the organization unique from its competitors (Rhodes, 2010).

STRATEGIC MANAGEMENT PROCESS:

For an effective strategic management the organization should first deploy a strategic plan
based on which further process can be carried out .The process starts from first goal setting
then analysis of strategy formation followed by strategy formation which is then followed by
strategy implementation and strategy monitoring.
Goal setting:
In the first step goal setting the organization sets the vision, mission and objectives for the
organization. Only when the goal is set the managers will take the decisions according to the
goal and the target of the organization will be fixed according to the goal set by the
organization.
Analysis of strategy:
In the second step analysis of strategy the organization should carry out both internal and
external analysis. For any organization to be successful in the strategic management, it is
essential for an organization to examine its environment using Swot, Pestel analysis and
Porter’s five force model (Kiptoo, 2014).
Swot analysis means internal strength and weakness and external opportunities and threat of
an organization. “A systematic procedure for identifying a firm’s critical success factors: its
internal strength and weakness and its external opportunities and strengths” (Blocher, 2010).
The main aim of the organization is to identify the areas they are strong at. Their strength
may be in the products or services they produce or in their supply chain management or in
their effective management. The organization must identify their strengths which makes it
unique for the competitors. The second thing which an organization should consider is the
weakness of the organization. There may be some areas in which they are not strong at. It
becomes the competitive advantage for the other organization. Hence the organization must
know in which areas they weak at. These two are the internal analysis to be done in an
organization. Opportunities and threats for the organization are the external factors to be
examined. “An opportunity is an external element that is a combination of circumstances
times and places that, if accompanied by a certain course of action, is likely to result in
significant positive benefits” (DiSilets, 2008). Opportunities are the areas which an
organization uses to take competitive advantage over the other organization. Thus to gain
competitive advantage over the other organization opportunities in the environment should be
analysed properly. The second factor to be examined externally is threats. Threats can come
through suppliers, customers, economic, social factors and government pressure. Threats can
be easily identified by simply examining the industry and the competitive advantage of the
competitors (Blocher, 2010).
Pestel analysis includes six environmental factors which includes political, economical,
social, technological, ecological and legal. This shows that the organization should consider
not only the economic factors of the market but also the non economic factors also. The
political factor in the pestel contributes to the state and political factors in the macro
environment. The economical factor contributes to the currency, exchange rates, interest rates
and growing economy around the world. The social factor influences the nature of the
demand, supply and they can also change the effectiveness, power and innovativeness of the
organization. The technological factor contributes to the growing technology around the
world. Ecological factor contributes to the green environment such as pollution, climate
change and waste. Legal factor contributes to the regulations and laws. Thus pestel analysis is
carried out to examine the macro environment factors.
Porter’s five force model is introduced by porter to analyse the competition existing in the
market. The five components of the porter’s model are threats of new entrants, bargaining
power of suppliers, bargaining power of buyers, threats of substitutes, rivalry among the
existing competitors. Greater the threat of entry, worse it is for the new comer to enter the
market. If the market is attractive it is more barriers for a new comer to enter the market. The
five important entry barriers are scale and experience, access to supply or distribution
channels, expected retaliation, legislation, incumbency advantages. Bargaining power of
suppliers will be more if they are only limited suppliers for the particular market. They
dominate their customers. They fix the price of the product. The power of suppliers will be
high when they are concentrated suppliers, high switching costs, supplier competition threat
an differentiated products. Bargaining power of buyers will be more if they buy products in
bulk or if they have major share in utilizing the services in the industry. They dominate the
suppliers. They have the power to reduce or increase the price of the product. Substitutes are
the product or service that gives the same benefit as that of the industry’s products but it has
different nature. The buyer power is more when there is concentration of buyers, low
switching cost, buyer competition threat and low buyer profit and impact on quality. The
substitutes have the tendency to lower the demand for the product or services existing in the
market. Two important points to be considered here are price/performance ratio and extra
industry effects. The more the rivalry is it becomes difficult for the new entrants to enter the
market. The factors which tend to define the rivalry are competitor concentration and
balance, industry growth rate, high fixed costs, high exit barriers and low differentiation.
Hence to implement a strategy in an organization it should consider all these five components
to make the strategy successful.

Strategy formation:
The strategy formation oriented with the strategic action to be taken to achieve the goal of the
organization. The strategic formation is done with the information got from the analysis of
the organization. Depending upon that information which we get from the analysis the
organization prioritize the issues and takes action to achieve the goal of the organization.
Through strategy formation the organization seeks to increase the profitability and maintain
the competitive advantage.

Strategy implementation:
Implementation is nothing but executing the strategic plan in real. The resources, the budget
required for the strategic plan is gathered at this stage. The co-operation between the
management and the personnel is necessary for the successful implementation of the strategic
plan. The organization executes strategy by creating financial policies, human resources and
operation goals.
Strategy monitoring:
Once the strategy has been implemented it is necessary to monitor the strategy. Strategy
monitoring is done to check whether the strategy has obtained the desired result. It is
important to note that the applied strategy has satisfied the goal of the company. Through
monitoring, an organisation is able to understand when and how to adjust the plan to adapt to
changing trends.

CONCLUSION:
The introduction of the strategic management into global market place has changed the face
of the business industry. The strategic management helps the organization to improve its
management style and to be a part of the competition. The strategy analysis tools help the
organization to know the strength and weakness of the organization. The analysis of the
macro environment factors helps the organization to know the external forces that acts on the
organization. Analysis of threat of entry, threat of substitutes, intensive rivalry among the
competitors, power of suppliers, and power of buyers helps the organization to make itself
unique among the competitors. The strategic management is very important element to gain
the competitive advantage. The strategic managers are very responsible to implement the
strategic plan in the organization. They should be capable enough to carry out the strategic
plan in the organization.
Strategy planning is includes a tremendous deal of risk and resource analysis, financial
analysis should be done before implementing the strategic plan. In essence strategic
management is centered around business world and respond to the questions of “where do
you want your business to go” “how is your business going to get there” and “ how will you
know when you get there” (Hofstrand, 2007)

Bibliography
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Chandler, A., 1962. Strategy and structure: chapters in the history of the industrial enterprise.
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DiSilets, L., 2008. SWOT is useful in your tool kit. The Journal of Continuing Education in Nursing,
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Gluck, F. W. K. S. &. W. A. S., 1982. The four phases of strategic management. Journal of Business
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Johnson, J. et al., 2017. Exploring Strategy. 11 ed. s.l.:Person education limited.

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