Strategic Plan: Implementation Plan, Strategic Controls, and Contingency Plan
A perspective is a way of viewing things, businesses should use multiple perspectives to form a holistic vision of the company. The strategic perspective is especially important as it develops the competitive mindset. The component of a strategic plan: implementation plan, strategic controls, and contingency plan analysis. With the strategic perspective, a business can develop a range of approaches to common business obstacles. Creating the strategic perspective involves stepping back and considering all the working parts in and surrounding the business. Strategies may be tailored to the sort of business that is being delivered, for example strategies in the private, public and voluntary sectors may vary greatly as their purpose, aims and objectives will be very different. The process of developing a strategic perspective is not static. As the business evolves, so should the strategies.
Strategies may be tailored to the sort of business that is being delivered, for example strategies in the private, public and voluntary sectors may vary greatly as their purpose, aims and objectives will be very different.
In most large businesses there are a number of levels of management. Strategic management is the highest of these levels in the sense that it is the broadest - applying to all parts of the business - while also incorporating the longest time horizon. It gives direction to the values, culture, goals, and business missions. Under this broad strategy there are typically business-level competitive strategies and functional unit strategies. According to Michael Porter, a firm must formulate a business strategy that incorporates either cost leadership, differentiation or focus in order to achieve a sustainable competitive advantage and long-term success in its chosen arenas or industries.
Functional strategies include marketing strategies, new product development strategies, human resource strategies, financial strategies, legal strategies, supply-chain strategies, and information technology management strategies. The emphasis is on short and medium term plans and is limited to the domain of each department’s functional responsibility. Each functional department attempts to do its part in meeting overall corporate objectives, and hence to some extent their strategies are derived from broader business strategies.
In general terms, there are two main approaches to business strategy, which are opposite but complement each other in some ways:
The Industrial Organisational Approach based on economic theory — deals with issues like competitive rivalry, resource allocation, economies of scale assumptions — rationality, self discipline behaviour, profit maximisation. These companies may be market-driven organisations and base their strategy on making conscious choices about which markets they will serve and how they will add value.
The Sociological Approach deals primarily with human interactions assumptions — bounded rationality, satisfying behaviour, profit sub-optimality. Most organisations are internally driven, which means that their strategy is driven by what they have done in the past; their thinking is inside out. The weakness with this strategy is that organisation members are not anticipating changes that are happening in the marketplace.
Customer-driven organisations are those who try to be close and ready to listen to the customer. The problem with approach is that these organisations end up trying to be “all things to all people.”
High performance organisations not only participate in the strategy process, they also understand which strategy will propel their organisations forward.
The most well known approach to strategy and implementation is what is known as the classical approach. Its key components are analysing and planning, implementing in a disciplined manner and finally following the plan. This is an approach which works well in predictable environments that are not shapeable. In these industries, demand grows roughly at GDP levels, and volatility is relatively low.
The second approach to strategy is what is known as the adaptive approach. This approach works well in highly unpredictable industries that are also not easily shapeable. A good example could be the software industry, in particular, say, the gaming industry. Here, the competitive conditions are highly volatile and the technology is constantly changing. As this environment doesn’t easily allow businesses to plan, they use a more biological approach. Essentially, create variation, select what works, implement and scale it. Then, the cycle begins again. One could say that this adaptive strategy emerges continuously from experiments.
The third approach to strategy is what is known as the visionary approach. Here, conditions — at least in the eyes of the entrepreneur — are both predictable and shapeable. So this is not about participating in an industry, but creating an industry. The approach here is to envision a possibility that others have not seen, then to realise it and finally to scale it.
The fourth approach to strategy is probably the most exotic and unfamiliar one. It is what we call the “shaping approach.” Here, conditions are both shapeable and unpredictable. That sounds almost like a contradiction, but it isn’t: This environment it not based on single companies competing against each other, but a whole ecosystem of companies that are collaboratively reshaping an industry. Here companies deploy a strategy at the level of an individual company, and also a successful position within a successful ecosystem. Here, the recipe for thinking about strategy is very different: to orchestrate the contributions of others in the ecosystem and then to co-evolve that collaborative system.
The fifth approach to strategy is what is termed “renewal.” It applies to situations where companies are out of step with their competitive environment. As a result, their competitive or financial performance is suffering. Renewal is usually a very big risk for companies.
In conclusion, strategies may be tailored to the sort of business that is being delivered, for example strategies in the private, public and voluntary sectors may vary greatly as their purpose, aims and objectives will be very different.
