2. Strategy and business Flashcards
What is strategy?
Direction and scope of an organisation long term to achieve a competitive advantage
What makes planning strategic?
It considers:
-Long term (3-5 years)
-Whole organisation
-Resources and external environment
-Stakeholders
-Competitive advantage
What are emergent strategies?
Strategies that emerge over time in response to the environment
(A strategy which wasn’t necessarily intended)
Who often adopts the emergent strategic approach?
Organisations who operate in dynamic environment
What is the resource-based view? (inside-out)
Developing internal resources which are hard to imitate
What is the positioning based view? (outside-in)
Analysing external environment to identify customer needs
What are the risks of resource-based view?
Organisation may fail to react to long-term industry trends
What are the risks of the positioning based view?
Organisation is forced to evolve and develop alongside customer needs
What influences planning horizons?
Nature of ownership
Capital structure
Nature of industry
Nature of business environment
Nature of management
How can demonstrating a commitment to sustainability increase the competitive advantage of an organisation?
Attract sustainable committed customers
Retaining staff
Positive relationships with like-minded suppliers
What are the two approaches to strategic planning?
Rational & Emergent
Advantages of rational approach?
Provides a framework
Encourages long-term planning
Goal congruence
Considers the needs of stakeholders
Disadvantages of rational approach?
Takes a long time
Formal planning reduces initiative and innovative thinking
