Strategic Management: Types of Strategy, Models, and Concepts

This article discusses strategic management, including the different types of strategy, models, and concepts. It explores the impact of competitive drives on an organization's competitive position and examines the extent of strategic drift. The article also discusses the alignment of an organization's mission and vision with market demand and explores Philips' strategic capabilities through SWOT analysis.

Strategic
Management

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Differences in kinds of strategy connected with the schools of strategy & strategic concepts.
................................................................................................................................................1
TASK 2............................................................................................................................................3
Application of different models and concepts, defining competitive drives and its impact on
competitive position of an organisation.................................................................................3
Task 3...............................................................................................................................................6
Extent to which an organisation is facing strategic drift........................................................6
Alignment to mission and vision of company with the demand of marketplace...................6
Company's strategic capabilities............................................................................................6
TASK 4............................................................................................................................................8
Possible strategies an organisation could follow to sustain its core business........................8
TASK 5............................................................................................................................................9
Evaluation of resource implications of recommendations an organisation need to address. .9
CONCLUSION..............................................................................................................................11
REFEREMCES..............................................................................................................................12

INTRODUCTION
Strategic Management is illustrated as identification and description of tactics which is
carried out by manager in order to enhance performance and to formulate tough bench mark for
others in the open market place. On the other hand, it is described as bundles of decisions and
acts that is taken by manager of the company in order to describe the outcomes of organization's
performance. Strategic management plays vital role in an organization. This guide the firm in
move in particular direction by which set goals and objectives can be attained easily. By
effectively adopting this company is no more reactive it turns out to be proactive in nature. The
existing report is written from the perspective of Philips. They are the Dutch multi-national
corporation and specifically they are largest manufacture of electronic items. Headquarter of
Philips is situated Amsterdam, Netherlands. This assignment covers distinguish types of strategy
and strategic concepts. Porter's five force model is used in order to drive competitive advantages.
SWOT analysis is performed so as to understand the strength, weaknesses, opportunity and
threat. Additionally, porter's generic model is also used in order to achieve the set goals and
objectives.
TASK 1
Differences in kinds of strategy connected with the schools of strategy & strategic concepts.
Strategy is formulated by top level authority in business organization to overcome any
kind of barriers faced by company. Strategies are designed by scanning the external environment
to accomplish desired aims and objectives in set time span (Augier and Teece, 2018). In the
working premises strong strategy aid business associates to achieve competitive advantages in
competitive market. Management of Philips modify their tactics as per the requirement so as to
meet the needs and requirements of targeted customers. Those organizations whose management
changes their strategies as the external demand they are only able to sustain and survive for
longer time period in cut throat competitive world. However, strategic management render
border perspective to the co-workers of a firm so as to better understand how their job fits the
whole firm's plan (Sullivan, Thomas and Rosano, 2018). There are numerous importance of
strategic management which are elaborated as under:
 Strategic Management aid the company to become proactive instead of reactive
 In an organisation strategic management are alignment with enterprise vision.
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 Strategic management ensure long term survival of the business as well as assist in
coping up with dynamic environment (Chernev, 2018).
In intense competitive world the Mintzberg has developed various thoughts of school of strategy
which helps them in strategy formulation. There are distinguish types of strategy in relation to
the schools of strategy which are illustrated as under:
The design school: In this types of strategy in connection with the schools of strategy it
mainly concentrates on designing of new idea and conception of new idea.
The planning school: In this case, planning school focus more on designing or planning
complete strategy in rigorous way. The plan that is going to be executed in the firm is
documented from starting to end. However, in every place the formulated plan is referred in
order to take new and fresh decision. When changes in external environment take place the it
directly affects the complete plan.
The positioning school: In this specific kinds of strategy in relation to the schools of
strategy company’s management deicide that they want to potion the goods in the mind of the
customers and make decision respectively. In the open market once the market is scanned the
most appropriate strategy is modified so as to enhance positioning of the goods.
The entrepreneurial school: In this type of strategy complete focus is put on the CEO of
the organisation it is done mainly in small scale business. Here, employees believe their CEO
and work according to their instructions in order to make the business big and successful. The
main issue faced by entrepreneurial school is that it is single one and need leader who is strong
and can easily make changes as per the requirements (David and David, 2019).
The cognitive school: From the distinguish types of strategy in relation to the schools of
strategy cognitive school is another strategy in which person's information and perception is
studied deeply. By this product can be designed respectively as well as strategy can be mould
accordingly so that loyal consumers have enough data about them.
The power school: In this particular school the person who has more power in their
hands are accountable to take decisions. However, they can be stakeholders, customers and so
on. The issue associated to power of school raises when the concern people stop listening to the
feedbacks and concentrate more on enhancement of minor things.
In order to be in the leading position Philips take into account all the factors in order to
make effective strategy. It facilitate them to accomplish their desired organisational goals and
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objectives. However, in order to examine the situation properly in the international market it is
compulsory to consider to distinguish strategic concept. Philips is benefited by such concepts as
it directly or indirectly assist in identifying broad terms for what is to be in the enterprise.
Manager of the organization mould the concepts as per the situation demand (Ginter, Duncan
and Swayne, 2018).
TASK 2
Application of different models and concepts, defining competitive drives and its impact on
competitive position of an organisation
In order to gain competitive advantages in the open market place it is very essential to use
the most appropriate models. They guide and support the business in right direction and assist
them to achieve the desire outcomes in the set time frame. Porter's five force model and VRIO
model is adopted by Philips in order to create tough bench mark for others. Various organisation
is implement numerous model according to their business type in order to gain productive results
as compare to rivalry. The above mentioned models are illustrated below briefly:
VRIO analysis
Jay B Barney was the founder of VRIO frame work. This successful model came into
existence in the year 1919. It is widely adopted by the business association in order to analyse
the internal resources and capabilities of the firm. VRIO analysis is described as a tool that is
used by firm in order to make effective decision in neck to neck competitive world. Value: In this specific case, value is able to analyses goods and services capability to
generate value for it's targeted customers. Philips is providing high quality electronic
items at nominal rate that is creating value for money to the end user in the market.
Human resource, patent, distribution channels and financial resources of the business
administration are precious resources that are giving strategic advantages to Philips
across worldwide (Haynes, 2018). Rare : In this stage of VRIO model unique and extraordinary goods and services are
offered to the end users. Philips and its skilled and potential team is working day and
night to provide innovative product and services to their customers. By this competitive
advantages can be gained against rivalry which is a positive mark for the company.
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However, patent, human assets, finance and so on are scare that render the firm strategic
capability. Imitable : It means if the company products and services can be easily replicated by other
companies. Philips provides high quality products items at nominal rate to its customers
which are difficult to be imitated as it requires high investment. The company's financial
resources and patents are not imitable which gives the company strategic capability (Hitt
and Duane Ireland, 2017).
 Organisation : This relates to the managerial systems, policies, culture and structure of
an organisation which gives it a strategic advantage. Philips has strong financial functions
which gives strategic capability to the company.
In the below table X sign represents yes while Y indicates no.
Resource/
Capability
Valuable Rare Difficult to
imitate
Is it organised
Distribution
channel
X
Human
Resources
X X Y
Patents X X X Y
Financial
Resources
X X X X
Porter's five force model:
In the year 1979 Porter's Five Force model came into existence by M. Porter. There are
five key competitive forces are impacting an industry. By deeply examining the all the forces
organization is able to better understand the degree of power in each and every stage (Hitt,
Ireland and Hoskisson, 2016). Management of Philips is implementing Porter's five force model
in order to satisfy the emerging needs and wants of the customers in the set time duration. The
stages of Porter's five force model are illustrated beneath:
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Threat of new entrants: The degree of new entrants is more when low amount of capital is
needed to enter into the market. Below are some of the points which showcase that threat to new
entrants is high which are illustrated under:
 When there is no government regulations
 Goods are of similar nature
 Less customer loyalty
 The switching costs of customers are low
 Barriers to entry
 Access to distribution channels
Bargaining power of suppliers: Suppliers has strong bargaining power in the open
market place when there is very less suppliers but many buyers are available in the intense
competitive world (Holloway, 2018). Bargaining power of suppliers permit seller to sell high
priced goods to the customers. Below are some of the points where high degree of supplier is
explained as under:
 When there is very less substitute raw materiel exist.
 Cost of switching cost is too high in the open market place.
 Limited resources are hold by suppliers
Bargaining power of buyers: The bargaining power of buyer is high when buyers has
power to lower the prices of goods from industry. Whereas, higher quality products raises
production costs. Some of the points are stated below which highlight when is the bargaining
power of buyer is more.
 When there are too many substitutes in the market-seeking
 Threaten to backward integrate
 Purchasing in large quantity
Threat to substitutes: In porter's five force model threat to substitute is more when
customers are getting substitute products at nominal rate as well as the quality is too good. In this
case customers are not loyal in nature slight change in prices leads to switch to other substitute
products in the market.
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Task 3
Extent to which an organisation is facing strategic drift
Strategic drift happens when the strategies that are followed by the company does not
help it to grow and develop in the competitive external environment. It is a concept of strategic
management which helps it in adjusting the company strategies according to the changing
environment so that the company can continue to survive substantially in the market (Kearney,
2018). Philips is the price leader in Dutch market which means that the company offers its
products to customer at low prices in UK and other countries due to there strong financial
position, than its competitors which decrease the profit margins of the company. This has lead
the company to change its strategy so that it can continue to survive in the market and can deal
with competition in an efficient manner thereby increasing its profits.
Alignment to mission and vision of company with the demand of marketplace
Mission: Create value for customers so that their lifetime loyalty can be earned.
Vision: To be the most highly valued business by : the customers who we serve, the
communities where we operate, our loyal employees and our shareholders.
With the increase in population the demand for groceries and other general merchandise
at reasonable costs and best in quality is rapidly increasing in the market. This helps the
company to increase its sales as the company is a price leader in the UK market and is able to
provide its customers with good quality of products at reasonable rates which helps it in
attracting a large number of customers (Makadok, Burton and Barney, 2018). The company try
to evolve its strategies and policies with the changing environmental factors which helps the
company in aligning with the market demand efficiently.
Company's strategic capabilities
The ability of a business to use all its resources, skills and capabilities in an efficient
manner so that it can gain a competitive advantage in the market. The strategic capabilities are
the internal capabilities of the business which are explained in reference to Philips as follows :
SWOT analysis :
SWOT stands for strengths, weaknesses, opportunity and threats. Organization conduct
Swot analysis in order to better understand the the strength of the firm as well as frame
strategies to improve the weak area for better results. Management keep eye in the open market
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place to grab the opportunities prevailing in the market. By doing so business can be flourish
easily and huge profit can be maximized as compare to rivalry. Along, with this threats
prevailing in the intense competitive marketplace is examine and unique ways are discovered to
overcome them in the up-coming years. This directly or indirectly assist the business to gain
competitive advantages against competitors which is a positive mark for the organization. Below
is briefly discussed Philips's Swot analysis which are follows:
Strength Weakness
 In the global market numerous awards
are owned by Philips. This has raised
their market value directly in cut throat
competitive world (Meyer, Neck and
Meeks, 2017).
 It is one of the most largest profitable
supermarket across the boundaries.
 This leading organization is has cash
reserves and wide range of property in
its portfolio. This render them strong
financial position in the global market.
 Modern tools and techniques are used
by the top level management which
assist them to meet the emerging needs
and wants of the customers.
 There are large variety of product in the
market.
 In the open market place many of the
Philips subsidiaries are not working
well .
 Philips is more dependent more on
Europe and United Kingdom for it's
sales. They did not spend time and
resources to developing and growing
other market.
Opportunities Threat
 The opportunities prevailing in the
market for Philips is that there can be
increased premium range products.
 Philips can concentrate on growing
business online. This is because
 Philips is facing biggest threat from low
cost rivals like, LG, Hitachi.
 Britain is no longer in the European
Union due to which the trade deals has
become threat for Philips in the cut
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customers are preferring to purchase
things online.
 Business of Philips can be expanded
into overseas market which are
growing.
throat competitive world (Meyer and
Xin, 2018).
 Another threat to the organization is
the labour threat as their wages has
raised due to which profit maximization
ratio has decreased at a tremendous
scale in the global market.
Business Canvas Model
Business Model Canvas (MNC) is stated as management tool used to quickly and smoothly
define and transfer business concept or idea. On the other hand, it is explained as page document
that works by fundamental elements of a business. It plays a significant role in the business
administration as it aids in visualizing what is important and push users to work on the key areas.
Along with this it is used in another way by employees to reach agreements.
TASK 4
Possible strategies an organisation could follow to sustain its core business.
It is necessary for every business organisation to do proper planning and plotting so that they
can easily attain the goals which they are willing to accomplish within the given time period. In
current situation there are number of issues which are needed to be faced by the business
organisation like Philips and in order to sustain in the market it is necessary for them to use
defensive strategies (Morden, 2016). Below there is the detail description about the defensive
strategy in detail within its three different elements.
 Retrenchment: It is one of the main element of defensive strategy where planning plays
the crucial role. Here, Philips is required to focus that how they can reduce the
unnecessary expenses by selling the assets or also having the employee’s layoffs which is
directly help to enhance the profit of a company. Also, it will give the idea that how
manufacturing process can be conducted by using limited resources.
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 Divestiture: It is also defensive strategy which is used by the business organisation for
the purpose of attaining the goals within the specific time period. While talking about
Philips Plc, they are needed to sell some of the assets to attain the target such as higher
return or to reduce the debt. This strategy has helped some organizations to get more
focused on their core business and improve their performance in the market (Moutinho
and Vargas-Sanchez, 2018)
 Liquidation: It is one of the hardest defensive strategy where companies’ assets of a
company are sold for the purpose of paying off the debt amount. In context of Philips, it
if any of the adverse situation occurs then it is necessary for the company to use
liquidation process as it helps to sell out the assets at a appropriate price which helps to
do the repayment of a creditor.
These are some of the defensive strategy which can be used by the business organisation for
the purpose of securing the business whenever any of those situation where decision making
process becomes difficult.
TASK 5
Evaluation of resource implications of recommendations an organisation need to address
There are different resources which can be used by the business organisation which can help
them to perform better within the market. It is necessary for a company that they must try to take
the help of VRIO model because it helps to business organisation to attain the target in specific
time period (Rothaermel, 2017). Porter five forces is needed to be addressed by the company if
they want to accomplish their target because it is one of the way through which company can
give themselves an opportunity perform well in any of the situation. In addition, is it one of the
model which can help Philips to determine about the competition which is available in the
market and the performance which being shown by the rivalries firm. Also, this model will allow
the business organisation to improve their operational department where involvement of every
department can be found easily. As all of the department such as R&D, HRM, Finance and more
will give their idea to operational department by analysing the situation based on Porters Five
Forces model which will enhance their performance. This will directly help the company at the
time of accomplishing the goals.
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The second model which company can use for attaining their business mission is SWOT
as it will help to determine the capabilities and weaknesses of a company through which there
will be higher chances the HRM department can give their contribution for the purpose of
enhance the performance (Slack and Brandon-Jones, 2018). In short, different types of model
which company uses can be beneficial because it directly helps to accomplish the organisational
goals in shorter period of time.
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CONCLUSION
From the above decision it can be ended that strategic management plays a vital role in an
organization. They guide and support the business associates to attain the desire outcomes in the
set time duration. Strategic management directly or indirectly assist the organization to gain
competitive advantages in the cut throat competitive world. The distinguish types of strategy in
relation to the schools of strategy are studied so that business top level management is able to
take best decision for the betterment of the company. Porter's five force model and VIRO model
is used in order to gain productive results as compare to rivalry. SWOT analysis is studied
deeply in order to examine the strength, weaknesses, opportunities and threat. By this
management is able to frame tactics by scanning the threats and opportunities prevailing in the
open market place. However, business canvas model is used in order to understand how
enterprise delivers, captures and creates value within its industry. Additionally, porter's generic
model is examined so as to sustain in the intense competitive world. Also, it helps organisation
to take best decision.
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REFEREMCES
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cases: Competitiveness and globalization. Cengage Learning.
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Kearney, R., 2018. Public sector performance: management, motivation, and measurement.
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