Strategic Management: Definition Of Strategy, And Environment

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Definition of strategy, and environment

o Originates from the 1960s’ (Learned et al. 1965)

o The performance of a business relies on the harmony of the management with its environment. (Houben et al.1999;Agarwald et al.2012)

o John L . Thompson implies that Strategic management is the evaluation of how an organisation’s resources and values follow the demands of what he defines as an uncertain, complex and dynamic environment. It must aim at developing the key factors of success (Thompson 1990) and using the necessary tools for accomplishment of objectives (Glaister & Falshaw 1999)

o Kenneth Andrews demonstrated that a good strategy is linking the external situation of a firm to its internal assets or characteristics (Andrews 1971) o Firms,
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o The list of factors must only include one’s of importance so as to concentrate on the essentials, gain of competitive & strategic advantage is a result of good use of the resources (Thompson 1990) and the analysis can be oriented on the general view of the organization or in comparison to it’s competitors (Deakins, Freel 2006)

o Shouldn’t just rely on a SWOT, it should be used as an added tool to the management process (Dyson 2004)

o External of company less control on and internal more control on, direct or indirect environment made of unstable variables (uncertainty) (Houben et al.1999)

o Other models of strategic analysis can contribute to a SWOT analysis so as to evaluate strategic options (Johnson, Scholes 1998).

o “Those in the positioning school argue that SWOT analysis must start with external analysis”
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(Johnson, Scholes 1998)

o SWOT essential in a business plan, helps find the factors that will be critical to a business’ success (Deakins, Freel 2006)

o An opportunity can also be a threat, for example the raise of the smoothie market in the UK for a fruit juice company can be seen as a threat because of a new substitution product or as an opportunity to diversify (Porter1980,1985)

o We can also debate that evaluating the demand in strategic planning can be controverted in some cases where demand seems to have been created by the appearance of the product itself, for example the Body Shop cosmetics did they create a demand for natural cosmetics or was the desire for that type of product already existent implicitly (Thompson 1990)

o Some even say it is useful (Hill & Westbrook,1997;Amstrong 1984)

o And some still finds this model useful for planning (Finnegan,2010) o Some look to reinvent the SWOT model to be more objective (Agarwald et al.)

o SWOT analysis can be useful in Peter Schwartz’s scenario development (Mietzner &

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