Strategic Management (Fach) / Ten schools of thought about strategy making (Lektion)
In dieser Lektion befinden sich 18 Karteikarten
Main features and differences of the schools of thought
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- 3 Prescriptive schools: Design school: Strategy formation as a process of conception Planning school: Strategy formation as a formal process Positioning school: Strategy formation as an analytical process
- 6 Descriptive schools: Prescriptive Prescriptive Prescriptive Entrepreneurial school: Strategy formation as a visionary process Cognitive school: Strategy formation as a mental process Learning school: Strategy formation as an emergent process Power school: Strategy formation as a process of negotiation Cultural school: Strategy formation as a collective process Environmental school: Strategy formation as a reactive process
- Configuration school: 10. Configuration school: strategy formation as a process of transformation
- Design school: the basic model A kind of a SWOT-Analysis (Internal and External Appraisal -> strength/weaknesses, threats/opportunities -> creation of strategy->evaluation and choice (social responsibility, managerial value) -> implementation of Strategy) CEO is responsible/activator
- Design school: Evaluation of Strategies: Four criteria: Consistency: The strategy must not present mutually inconsistent goals and policies Consonance: The strategy must represent an adaptive response to the external environment and to the critical changes occurring within it Advantage: The strategy must provide for the creation and/or maintenance of a competitive advantage in the selected area of activity Feasibility: The strategy must neither overtax available resources nor create unsolvable sub problems
- Design school: The concept of “fit” Have to do with statistics and not easy to specify , The concept of fit is central in distinguishing the field of strategic management E.g. Fit as Gestalts: Many variables there -> find clusters Fit as Moderation/Mediation/Profile Deviation/Gestalt/Covariation/Matching
- Premises of the design school: Strategy formation should be a deliberate process of conscious thought Responsibility for that control and consciousness must rest with the chief executive officer: that person is the strategist The model of strategy formation must be kept simple and informal Strategies should be one of a kind: the best ones result from a process of individualized design The design process is complete when strategies appear fully formulated as perspective The strategies should be explicit, so they have to be kept simple Finally, only after these unique, full-blown, explicit, and simple strategies are fully formulated can they then be implemented
- 2) Planning School: The key proponent of the planning school –Igor Ansoff Published Corporate Strategy in 1965 Originator of the synergy concept and, of course, the Ansoff matrix Ansoff matrix: Market: Present/New und Product: Present/New. Matrix: Market Penetration, Product Development, Market Development, Diversification Offers different tools and instruments for strategy development (Ansoff) Steiner model of strategic planning (Premises/Planning/Implement and Review) Annual planning cycle at GE (Rothschild)
- Premises of the planning school: Strategies result from a controlled, conscious process of formal planning, decomposed into distinct steps, each delineated by checklists and supported by techniques Responsibility of that overall process rests with the chief executive in principle; responsibility for its execution rests with staff planners in practice Strategies appear from this process full blown, to be made explicit so that they can be implemented through detailed attention to objectives, budgets, programs, and operating plans of various kinds
- Rise and Fall of strategic planning: Mintzberg questions the strategic planning approach Honda-Effect (Pascale) Walter Kiechel – Coporate Strategies under Fire Strategic planning is well-suited to the challenge of extending leadership–adding a story or two to the old foundation. It is not well-suited to the challenge of regenerating leadership–building new foundations. No wonder it has lost its lustre.“ (Hamel & Prahalad)
- 3) The positioning school: A) BCGs portfolio matrix: Cost-based concept / Growth-Share Matrix Organizations should have not only Cash-Cows but also invest in new products Foundation of the matrix is the experience curve: It states that the more often a task is performed, the lower will be the cost of doing it. The task can be the production of any good or service. Each time cumulative volume doubles, value added costs fall by a constant and predictable percentage. Y-axis: Annual real rate of market growth (%); X-Axis: Relative Market share (Your own company's market share compared to those of your competitors)
- Question mark Earnings: low, unstable, growing Cash flow: negative Strategy: analyze to determine whether business can be grown into a star, or will degenerate into a dog
- Stars: Earnings: high stable, growing Cash flow: neutral Strategy: invest for growth
- Poor Dog: Earnings: low, unstable Cash flow: neutral or negative Strategy: divest
- Cash Cow: Earnings: high stable Cash flow: high stable Strategy: milk
- B) Porters five forces framework: five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. Innen: Rivalry among competitors - Außen: Suppliers, Substitute Products, Buyers, Potential new entrants (entry barriers)
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- Porter's five forces: Power can be exercised over: Prices Quality and performance of items supplied Reliability of deliveries Forward integration
- Porter's five forces: Competitive threat depends on: Suppliers: Number of suppliers Strategic relevance of items Standardization of Product Switching costs Substitutes Buyers: Number and Size of Buyers/Customers Degree of product standardization Switching costs Transparency of markets Threat of backward integration Substitute Products: Availability Pricing Performance features (comparable or better) Customer switching costs Potential New Entrants: Entry barriers Reactions of Incumbents