The Challenges in the Form of Competition

STRATEGIC
MANAGEMENT

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Executive Summary
Business models have changed and the challenges in the form of competition have increased
for every firm. This report will discuss the three strategic management approaches that allow
an organisation to do strategic management in a better manner. Dynamic capabilities
approach is one of the best approaches that allow an organisation to make changes in the
capabilities of the organisation on the basis of the need of the organisation evaluating both
current and future need of the organisation. This report also illustrates about the Resource
based view approach where it was found that in this approach organisation needs to evaluate
the resources of the firm according to the requirements they have and the challenges that they
may encounter in achieving their future objectives. In the last section of the report there will
be description about the Agency theory where it can be said that company will look at the
making the strategies related to different business aspects.

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Contents
Executive Summary..................................................................................................... 1
Introduction............................................................................................................... 2
Three approaches to strategic management.........................................................................2
Dynamic capabilities................................................................................................. 2
History............................................................................................................... 3
Benefits.............................................................................................................. 3
Implementation issues............................................................................................ 3
Limitations.......................................................................................................... 4
Example of the firms............................................................................................. 4
Resource based view approach.................................................................................... 4
History............................................................................................................... 5
Benefits.............................................................................................................. 5
Implementation issues............................................................................................ 5
Limitations.......................................................................................................... 5
Companies utilising this approach.............................................................................6
The Agency Theory.................................................................................................. 6
History............................................................................................................... 6
Benefits.............................................................................................................. 7
Implementation issues............................................................................................ 7
Limitations.......................................................................................................... 7
Organisation utilising Agency theory.........................................................................7
Conclusion................................................................................................................ 8
References................................................................................................................ 9

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Introduction
Strategic management plays an essential role in the development of the organisation hence
the companies that selects the best approach to strategic management are able to deal with the
challenges confronting them in a better manner. The leaderships and the worker’s skills are
playing a greater role in this. Every company has certain objectives to achieve and
accordingly they must make their strategic approach in accordance to it (Eden and
Ackermann, 2013). Different companies are using different approaches as per their need. It is
the relationship between different stakeholders and the ability of the organisation to
accumulate strategic resources that helps an organisation in successful implementation of
these approaches. This is necessary as many kinds of challenges are faced by the
organisations at the time of implementation of approach. In this regards three major
approaches can be used in the organisation for using strategic management.
Three approaches to strategic management
Different approaches which can be utilised by different companies on the basis of their
requirements. Three approaches that will be used here are Dynamic capabilities, Agency
theory and Resource Based View.
Dynamic capabilities
This approach is considered to be one of the most effective approaches in the modern day
business. This approach has impact on the stakeholders and helps the company in managing
these people in a proper manner. In the time when the business environment is changing at
faster rate, it has become critical for the organisations to adopt this approach so that their
capabilities remain on the better side. It is an approach that is significant in terms of
innovation based rivalry, price/performance rivalry and inventive destruction of the current
strengths of the organisation and the enhancing returns (Vogel and Güttel, 2013). It is an
approach that is understood as the organisation’s ability to intentionally adjust the firm’s
resource base. The major assumptions of this approach is that basic strengths of the
organisation is used for bringing short-term competitive positions which can be altered in the
gains that can be long term.