Strategic Management: Approaches, SWOT Analysis, and Innovation

This report discusses the advantages of strategic management in achieving sustainable growth and profitability in an organization. It covers prescriptive and emergent approaches, SWOT analysis, and the benefits and costs of innovation. The report includes a case study of Palcino, a restaurant chain, and evaluates its strengths, weaknesses, opportunities, and threats.

Strategic management

Contents
Introduction...........................................................................................................................................3
Section 1: Strategy is the comprehensive action plan……………………………sustainable competitive
advantage..........................................................................................................................................4
Critically compare and contrast……………………………………points you put forward..........................5
Section 2: The use and………………………………………………………..strategic management....................7
Evaluate the benefits, cost………………………………………………………………..works in practice..............9
Conclusion...........................................................................................................................................11
References...........................................................................................................................................12

Introduction
Strategic management is known as the ongoing analyzing, monitoring, planning and
assessment od all the needs of the organization to meet organizational goal for expanding the
market and customer base in the industry. Innovation is also use as the strategy of the organization
which is the process of redesigning and reinventing the strategy and products and services in the
organization. This report contains the advantage of strategic management in the organization for
sustainable growth and profitability of the organization. It also involves the two main approaches
used by an organization that are prescriptive and emergent approach, it has its own advantage and
disadvantage of using it as a strategy. This report also analysis the SWOT analysis the Palcino, SWOT
is used as a tool in strategic management. It also involves the innovation as a strategy in organization
and the involved benefits, risk and cost which an organization faces in the industry. The report
analyzation is as explained below.

Section 1: Strategy is the comprehensive action
plan……………………………sustainable competitive advantage.
Strategic management is known as the ongoing monitoring, analyzing and planning in an
organization to attain organization objective and aim. It is a ladder to achieve success in
organization in respect with the changes in business environment. It is an ongoing process
and procedure within the firm, it is required due to changes in external factors. There are
various benefits of using strategic management in an organization that are it gives
competitive advantage to the organization as it is proactive in nature and makes the
company alert about the changing environment (Valeri, 2021). It is a dynamic process which
makes achieving goal easier and clearer. It not only makes the organization cohesive but
helps in sustainable growth by effective and efficient use of strategies, it also increases
managerial awareness in respect to new trends and challenges in industry. Strategic
management can either be prescriptive which is making strategies in advance for any
organizational issue and other is descriptive that is applying the strategies when needed.
Strategic management is followed in five steps starting with identification, which involves
visualizing the organizational goal, objective and current strategic direction which usually
done by SWOT analysis. Second comes up analyzing, which answers all the questions
required to make a strategic plan (Barney, 2020). Third is the formation, once identifying and
analyzing all the information strategies has been implemented step by step. The strategic
plan should be focused, clear and related to organizational goal. Fourth step is execution
which is following the steps according to the strategic plan and the last step is evaluation
which is analyzing the profitability gained by that specific strategic approach.
For Example: In my company Palcino whose food products are designed and handcrafted in
London identifies to introduce new line in Packaged cookies and frozen food and decided it
by using strategic management for smooth outgo. Now, they had analyzed it by making new
strategies to improve the previous mistake and make the product more demanding in the
market industry. They were lacking in marketing strategy and in communicating with the
intermediators. My company has now created a strategic plan, it formed the team as an
internal message system by those retailers and intermediators can communicate smoothly
and quickly about the challenge and success in their stores. Before the release of new line
company launched the messaging, system which were set up on the company’s phones and
computers and can be accessible every time. After the release of new line, it has been
evaluated that due to the correct strategic planning company is earning profit and reaching
to their goal. Now Palcino has begun to make strategic planning for launching new product.

Critically compare and contrast……………………………………points you put
forward.
Prescriptive strategic approach
In this approach the vision, core value, mission and objective are made before the
implementation of strategy. It meant that firm initially plans and formulated the strategy according
to the priorities, industrial conditions and intention of top management. This approach follows top
to down hierarchy structure and authoritative style of management. This approach is appropriate to
the organization due to its advantage. Its advantages are long term thinking, organization plans any
strategy for long term basis which impacts the actions and inactions in the organization.
Performance of the employees, managers or of any product are always measured in long term basis.
Coordinating effort of employees are utilized in right place if strategies are already planned and
monitored properly. Working in any plan together makes the colleague learn from each other which
also involves the negotiation and expressing different views. This approach is suitable in the
organization for formal strategic planning and this approach enables the firm to organized better in
the business environment and market industry (Henry, 2021). The disadvantage of Prescriptive
approach is, it stiffs the creativity and imagination of lower-level employees and managers as every
step is done according to the top management priority. Prescriptive approach cannot analysis the
ongoing threat or opportunities of external and internal environment as some decisions depend
upon the circumstances and customer requirements. In my company Palcino which deals in daily
necessity of products, I prefer prescriptive approach strategy to achieve organization objective and
profit. This approach helps the organization to run-on long-term basis for the existing product of
their company, I also used this strategy before launching new or innovative product in the market
for evaluating their profitability in numeric terms.
Emergent strategic approach
In Emergent approach, strategies and various operational decisions are made timely and
that strategies known as unplanned. It is made when business has to adapt any new term in the firm,
immediate changes in external environment and for any competitive rivalry. Instead of following any
premediated plan, firm invest their thoughts, experimentation and adjustment required to plan a
strategy. This model mainly focuses on gaining competitive advantage, values the knowledge as a
core of organization. It allows flexibility and easy adaptation on changing the environment in
industry. This strategy does not confuse the firm as prescriptive approach does, as Emergent is not
the chosen strategy for the firm it is the newly developed strategy made when it is required. This
strategy required short term planning but it requires adverse knowledge and experience to adapt
this strategy (Courtney, 2020). There are various advantages for using Emergent strategic approach
in an organization that are it requires less time to make any changes in the strategy if anything

differs in last moment. This strategy has ability to exploit new opportunities and knowledge as per
the preference of the industry. It has higher chances of success as the strategy which comes from
experience and knowledge is more effective than the theoretical assumption knowledge. It also
motivates the employees of the firm as ideas are also taken from the lower management to make
them feel valued and to involve in every decision making. There are also some disadvantages of
using emergent strategic approach that are sometimes approach seems to be impractical which has
no objective. For my company Palcino when any new entrant of uncertain industry environment
comes as a rivalry, I prefer emergent strategic approach to motivate my employees to work and
think according to the uncertainties, to gain new experience and knowledge of external environment
which can affect an organization. This approach is suitable for this organization for making suitable
strategies for the rapid changes, unpredictable, turbulent and uncertainties in business
environment. I prefer both the strategies as per the uncertain need of the business in industry.

Section 2: The use and………………………………………………………..strategic
management.
SWOT analysis
It is known as a framework which is used to evaluate the organization’s competitive position
in the market. SWOT is a part of strategic planning, its analysis the internal, external, current and
future potentials. It analysis the company’s strength, weakness, opportunity and threats within and
outside the organization. This is a tool which helps in both decision making and strategical planning.
It mainly uses the company strength as sword against the threat and achieve the opportunity in
industry (Ateba, and Prinsloo, 2019). This is a SWOT analysis of my company Palcino which is
founded in 2008, its headquarters are located in US. This company is known for a restaurant and
recently by proper strategies it is growing in the market base which is leading to large and new
customer base.
Strength
Strength are key factors in an organization which distinguishes it from the competitive
rivalry. Strength of the organization can be anything a strong brand, maintained revenues,
innovative technology or a loyal and huge customer base. My company Palcino various strengths it is
considered as most appreciated brand in its region. Customer surveys predict that Palcino fries is
considered as the tastiest produced product and considered as the strength of Palcino (Ansoff,
Kipley, and Ansoff, 2018). It is known as the estate company as it growing adversely all around the
world. Palcino is always updated with the latest technology as recently it has introduced the Kiosks
for self service and to reduce the customer effort standing in queues. Its quality standards are
always on top which usually attracts the customers and increases the customer base.
Weakness
Weaknesses are the weak points which restricts the organization to stand up their optimum
level. There are specific fields where organization needs to improve and develop strategies to remain
in the competition. Weaknesses usually hit company because of lack in capital, high debts,
satisfactory supply chains and average turnover rate (Wirtz, Müller and Weyerer, 2021). Palcino has
their franchise all over their targeted market base which enhances the risk of mismanagement, low
revenue and customer dissatisfaction. As Palcino is being a busiest restaurant faces supply chain
interruption in the form of low supply in some franchise, sometimes franchise limits the product
availability which increases the expenses and lower the overall profitability.
Opportunities
Opportunities are the advantageous external conditions that can provide a competitive
advantage to an organization. Opportunity can rise as a development to an organization or by any
technology innovation. It enhances the growth of organization it also improves management
structure, strategic growth and business performance. Palcino introduced value meals for the value
conscious customers which has increased sales. Palcino always try and introduce new innovative
products to attract customers, so that it not gets distracted by other fast foot outlets. Palcino is

offering more healthier options for the diet conscious customers, and it included more pickups, drive
ins and self-kiosks facilities.
Threats
Threats are the external factors which can harm the organization, some common threats are
increasing cost of material, increased competition, tight supply and labor. For Palcino, Burger King
and Chick-fil-A is being a major competitor nowadays which can snatch a stable position of Palcino, if
it does not come with effective strategic planning (Newburry, Deephouse, and Gardberg, 2019).
Palcino investing in new technology can become a threat as customer are excited for only once and
then switches to alternatives which leads to less profit as compared with the expansion amount.
Constant environmental concern also creates a risk for Palcino, for not wasting the food and using
ecofriendly serving things.
SWOT analysis is the most useful tool for the strategic management in an organization but it is not
free of limitations. There are some external limitations which are hard to stabilize by the
management. External factors involve overall rising in price, government legislation, economic
environment and inputs or raw material supply in an organization. There are some internal
limitations which can be managed by the organization that are insufficient developed and research
facilities, returned product due to low or not managed quality control, deprived industrial relations
and not skilled and untrained employee(Priem, 2018).These external limitations cannot be overcome
as they are natural and affecting each organization in the industry but by making proper strategic
planning and saving revenues can help a little. The internal limitations can be overcome by providing
proper training to the employees, by enhancing the quality of product and using specific tools and
develop team for researching for the organization.

Evaluate the benefits,
cost………………………………………………………………..works in practice.
Innovation
Innovation is a creativity that results into new product, service or turn into any new process.
Innovation always begun with an idea. Innovative ideas come from curiosity for doing and knowing
something new. Focusing on innovation make the organization or the person more into
opportunities, experiences and perspectives (Carayannis, 2018). An organization should always be
curious about the new innovation revolving and finding how they can make it more innovative by
using available resources and according to customer valuation. Innovation always comes to change
the existing thing into new and innovative way which can only be possible when an organization is
open minded and ready to take risk, new changes and ideas with using valid approaches and
experiments. Innovation is a journey it does not happens overnight and not every time innovation
works perfectly; it is a learning from failure and again start working where it went wrong or trying
any new approach (D’Cruz, 2018). Environment is created for employees to innovate new ideas in an
organization, It should create a culture that employees open up their ideas without any fear of
failure. There are four basic steps covered in innovation that are idea that is a process of collecting
and evaluating potential data. Concept which involves the analyzation of the marketing, solution and
implementation. Next is solution, it is a testing procedure of a finished product to recheck the work.
Last is market where products with new ideas are tested for viability.
Benefits
There are various benefits of innovation in organization which helps in sustainable growth and
overall profitability in the firm.
 Improved productivity: Employees of the organization having new innovation and
technology makes the process and product more innovative and effective (Chofreh, Goni,
and Zeinalnezhad, 2021). Innovation improve the efficiency and effectiveness of the
organization which leads to higher productivity and reduces the overall cost and reduce
wastage of ideas.
 Reduced cost: In order with increasing productivity it naturally reduces the overall cost. Less
time is required to spend on any task and it does not require innovation, if it requires more
working hours the work is allotted between employees. By these employees work equally
and efficiently which reduced the overall cost of the organization and leads to grow
sustainably.
 New industry and opportunity: With new innovation technology it helps to reach to new
audiences in the market industry which not only helps in expanding the market but also
increases the customer base in different region (Akyuz, and Gursoy, 2020). It increases the
profit margin of the organization which improves the goodwill of the organization in the
market industry.
 Customer experience: Innovation helps in providing better customer experience by serving
them with new innovative ideas and products according to their preference with low prices.
Innovation in one specific area leads to new product and service lines that fulfill customers
need.
 Greater innovation capacity in long time: Innovation has the long-term capacity to give
success to the organization. When organization innovates themselves, they are able to

compete with the rivalry in the industry. It helps the organization expand more quickly
which results in higher productivity.
Risks
New innovation or technology may be unique, attractive and exciting but parallelly it has its risks and
drawbacks which can also affect the organization.
 Financial risk: If innovative project does not work as per the expectation it can be a huge
financial loss to the organization. If organization did not achieve return on investment on
the project, company may suffer for long time which also wastes the effort of employees
and reduce the overall profitability.
 Operational risk: If any innovative product or services faces the operational risk then it
cannot be succeeding and cannot be able to drop into the market. Operation risks includes
any kind of process failure or description in any business operation (Amason, and Ward,
2020). It also involves the regulatory risk which involves if any product or services does not
meet to the expectation of the customers or due to any safety and security standards.
 Reputational risk: Reputational risk is when any innovation backfires, If the customer is not
satisfied with the product it not only reduces it customer base but also reduces the goodwill
of the organization in the market. Innovation backfire also snatches the maintained position
in the market.
 Competition: Every organization bring new product and services to maintain a position and
goodwill in the industry. Innovative products and their process are way harder to protect
though patent provides legal protection but in reality, it is not protected. It considered as a
risk as competitive company takes the risk and allow all investment to compete in the
industry for making similar or advanced innovative product.
Cost: For innovation less, cost is required as innovation is all up to new innovative mind and ideas
which makes any product or service special. Innovation contains risks but benefits too in an
organization, risk can slightly affect the overall revenue of the organization. For innovating new
variation in product or services cost can be reduced in many ways that are dematerialization, light
weighting, productivity tools in an organization, maintain the economies of scale, mass
customization, sourcing, efficient and effective use of resources.
There are various examples of multinational companies that are succeeding their business through
innovation. Innovation improved the productivity of these businesses and make them earn huge
profit out of innovation. It expanded the business all over the world and increased their reputation
and fame in the market industry and make them as a tough competitive rivalry (Witcher, 2019). In
my company I frequently changes the strategies and try to make products more innovative by
attractive packaging and including flavors and smell variation in the retailing products. My company
Palcino is known for new innovative idea and variation of products. I always manages the
organization and keeps customer preference at the top most priority for this I frequently conduct
surveys in the local region for knowing the new taste of customers and variation preferences on the
products. In my business I usually feels to reduce customer effort and help them to find the products
with an artificial intelligence innovation.

Conclusion
This report concludes that for an organizational profit and expansion at every step strategy are
required, and it is made by proper procedure and as per the industry competition and customer
needs. Strategic management is known as the tool for maintaining the position in organization. It
involves the both practical and theoretical knowledge which helps in maintain the organization in
efficient and effective way. Strategic management is an analytical process which helps in the to
achieve organizational goal in systematic way. There are mainly two type of approaches are
described in this report that are prescriptive and emergent approach. In prescriptive approach long
term strategy has been formed by assuming the external situation and in emergent approach when
the external environment hits then strategies have been formed according to the present
requirement. SWOT is a strategic management tool which describes company’s strength, weakness,
opportunity and threat. Innovation is a creative idea which can be applied to introduce new or
customized product and services. It has various benefits and risks in the organization.

References
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