Strategic Management Approaches for Competitive Advantage

MANAGEMENT

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Executive summary
Strategic management has become an essential part in the modern day business and it has
become crucial for the companies to apply best of strategic management approaches so as to
gain competitive advantage. This report will analyse three major strategic management
approaches that is applied by different companies so as to gain competitive edge over the
rivals. It is crucial for the company to apply all these approaches checking their capabilities
and the resources they have. Stakeholders approach suggests to take account of the fact that
any strategy has an impact on the stakeholders hence companies must make strategies that
benefit the stakeholders. Dynamic capabilities suggest that the capability of the firm to
purposefully adapt with the resource base of the firms is necessary so as to survive in the
current business environment. This report also discusses about resource based view approach
where company aims to develop, nurture and modify their resources so as to gain competitive
capabilities that gives them strategic edge over the rivals. This report contains the history,
benefits and limitations of all three approaches. Along with this it suggests the name of the
organisations that is actually using these three approaches for their benefit. Tata Company is
using stakeholder approach, Companies like amazon is using dynamic capability approach
while BMW and Honda is using Resource Based View approach.

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Contents
Executive summary...............................................................................................................................1
Introduction...........................................................................................................................................2
Three approaches to strategic management...........................................................................................2
Stakeholders approach.......................................................................................................................2
History...........................................................................................................................................2
Suggested benefits.........................................................................................................................3
Limitations.....................................................................................................................................4
Company that used this approach..................................................................................................4
Dynamic capabilities approach..........................................................................................................4
History...........................................................................................................................................5
Benefits..........................................................................................................................................5
Limitations.....................................................................................................................................5
Companies that applied this approach............................................................................................6
Resource Based View approach.........................................................................................................6
History...........................................................................................................................................6
Benefits..........................................................................................................................................7
Limitations.....................................................................................................................................7
Companies that applied this approach............................................................................................8
Conclusion.............................................................................................................................................8
REFERENCES......................................................................................................................................9

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Introduction
Strategic management has become very much essential in the modern day business. Every
organisation takes a different approach for doing strategic management. The way of
implementation plays a very crucial role in their success. It depends on the leadership and the
type of resources they have ensures the success of the organisation through that approach
(Hitt, Ireland and Hoskisson, 2012). The selection of approach must be done on the basis of
requirement of the firm and the challenges they are facing in their business. This report
analyses different aspects of the three major approaches that is taken by different
organisations so as to do strategic management.
Three approaches to strategic management
Among the different approaches that is used by different organisations the approach that is
highly used by the organisations are Stakeholders approach, Dynamic capabilities approach
and Resource based view approach (Hill, Jones and Schilling, 2014).
Stakeholders approach
Stakeholders approach works around stakeholder theory and concentrates on the idea of how
the stakeholder management is going to affect the management practices.
History
This approach to strategic management as emerged around in 1980’s. The idea of this
approach was moved in the publication by R. Edward Freeman’s in Strategic Management-A
Stakeholder Approach, a book published in the year 1984. Motivation behind stakeholder
management was to try and create a outline that was responsive to the managerial distresses
especially in the environment where environmental change or turbulence remains on the
higher side (Eden and Ackermann, 2013). The idea of this approach came as the traditional
approach was not as much capable of giving strategic direction or creating new opportunities
in the time when the change are so fast. This approach devises the methods to manage
relationship between stakeholders and the company so that it could benefit them strategically.
Stanford Research Institute in 1960’s suggested that managers need to understand the
concerns of the stakeholders are increasing with enhancement of turbulence in the
environment of business (Harrison, Bosse and Phillips, 2010). This calls for making of
strategies or objectives that would be supported by stakeholders as this is necessary for