Strategic Management: Perspective and Emergent Approach to Strategy Formation

This article discusses the perspective and emergent approach to strategy formation in strategic management. It explains the advantages and disadvantages of each approach and provides an application of VRIO analysis to Tesco. The article also highlights the advantages of PESTEL analysis and its role in minimizing risks. This study material is relevant for BSC (Hons) Business Management BMP6002 course.

BSC (Hons) BUSINESS MANAGEMENT
SEMESTER 1, EXAMINATION 2021/22
STRATEGIC MANAGEMENT
MODULE NO: BMP6002
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ANSWER BOOKLET
All the pages of the answer booklet should be submitted including blank ones.
Please type your answers in the spaces provided.
Insert additional pages where required.
Student Name Ana Nicoleta Varga
ID Number HE19277

[Section 1: Compulsory Question]
Answer to the Question no. 1
A business strategy is defined as the long-term strategic direction taken by an
organization to attain its future plans where attempt is made to get better competitive
positioning and fulfil the needs of every stakeholder by using the available resources and
considering the continuously evolving external environment. strategy formation and
strategic planning are important areas of business management because they helped the
company manage daily activities and resources in a manner which supports attainment of
larger objectives which extend beyond quarterly profits and sales revenue (Jelonek et. al.,
2022).
The area of strategic planning focuses on building specific future vision for the
company and creating attainable goals along with the sequence through which these goals
will be achieved to ensure that the future vision of the company is created for the benefit
and interest of every stakeholder associated with the company (Grant, 2021). Different
strategic approaches are applied by business organizations in order to further their
entrepreneurial success and achieve best outcome in different entrepreneurial and
endeavours. The two primary strategic approaches utilized by businesses to develop
strong corporate strategy for their firm are perspective approach to strategy and emergent
approach to strategy.
The emergent and perspective approach to strategic planning it's completely
opposite and has different advantages as well as disadvantages which need to be
considered before selecting either of the options to formulate strategy for a company. On
one hand the perspective approach to strategic planning focuses on firstly developing the
mission vision and core values of the organization so that appropriate strategic objectives
can be formulated (Quenum and et. al., 2021). After this the actual strategy planning and
implementation begin. Comparing this to emergent approach to strategic planning the
entire focus is on finding creative solutions by making suitable strategic and operational
decisions at various points leading to development of a specific pattern.
The perspective approach to strategy is one where objective is defined in progress
and the primary elements of the strategy are developed prior to its implementation. On the
opposite end is the emergent approach where the primary objective is not decided
beforehand end the main elements of the strategy are created within its course of
implementation as the strategy is continuously prepared and implemented through
decision making of managers and leaders (Shamir, 2021). Emergent approach to strategy
formation deserts in higher creativity and responsiveness during strategy permission for
surviving in the hyper competitive environment of the current age while perspective
approach to strategy helps in effective management in organization of complex areas
leading to higher degree of control.
The advantage of the perspective approach is that it supports long-term strategic
thinking and ensures that formal strategic planning takes place to make a coordinated
effort in attaining objectives and vision of the company. This advantage can be shown with
the help of UK based retail organization Tesco which has created suitable core values
vision mission and strategic objectives by following the prospective approach to strategy
formation and he's able to launch a coordinated and formal effort towards attainment of
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business objectives and organizational vision. In this way Tesco is able to achieve industry
wide success. On the other hand the advantage of emergent business strategy is that it is
more adaptive and helps exploit available opportunities. This is because it helps use
current strengths of the company to exploit the available opportunities in an effective
manner. Emergent strategy is used in changing environment because of its
responsiveness and ability to get desirable results from opportunities (Sallos and et. al.,
2019). In case of TESCO a suitable way in which the company can exploit emergent
approach to strategy is during organizational change such as digitization to get desired
outcome, exploiting opportunities and eliminating challenges.
[Section 2: Answer any TWO questions from four questions
given (2, 3, 4, & 5).]
Answer to the Question no. 2
Application of VRIO analysis to TESCO
Resource Valuable Rare Imitable Organized
Financial
Resources
Yes No No No
Distribution
network
Yes Yes No No
Technological
Resources
Yes Yes Yes No
Human
Resources
Yes Yes Yes Yes
 Valuable: The vast financial resources of Tesco are valuable to the company
because they are the lifeblood for end strategy implementation. High financial
capital gives a company competitive edge because they are able to secure better
marketing, advanced technology and attract talent easily (Jean‐Paul and et. al.,
2020). The distribution network of Tesco is valuable because it helps the company
ensure that all of its physical stores and online delivery has stocked products and
delivers them to consumer in a timely manner. Finally the technological and human
resources of the company are valuable because they help the firm find unique
solutions for various challenges and ensure that consumer satisfaction is
maximized for higher sales.
 Rare: The distribution network of Tesco is rare because it consists of thousands of
convenience stores, retail outlets, supermarkets and warehouses situated in
lucrative locations across United Kingdom. Most businesses in the retail industry do
not have access to large distribution network and have to depended on third parties
to make deliveries out of their limited regional accessibility (Rodrigue, 2020). The
technological and human resources of the company are also rare because they
consist of advanced technology and trained employees who are experienced and
skilled in providing best experience to consumers.
 Imitable: This element of VRIO looks ate if the resource can be easily replicated
(LEE, 2022). The technological resources of Tesco cannot be imitated easily
because they require high capital investment to purchase and implement as well as
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update advanced technologies such as artificial intelligence machine learning and
automation. human resource of Tesco consists of skilled experienced and
dedicated employees which cannot be replicated easily because it requires both
financial and time investment.
 Organized: In the current age of high competition skilled human resources are
necessary to achieve success (Huma and Ahmed, 2022). Human resources of
Tesco are organized because they provide the company higher sales by supporting
each consumer getting high quality experience from the company. Tesco has
354,744 employees who are trained through best technology and mentors with high
level skills and dedication to the firm. Therefore it is an organized resource which
helps the company attain its strategic objectives.
Review of business strategy
After completing the VRIO analysis, it is reviewed that the strategy of Tesco is dependent
on its human resources along with its technological prowess. This is suitable strategy to
compete in the retail industry which is currently going a transformation because of digital
technology. UK is facing labour shortage after the pandemic (Labour shortages: the ‘most
urgent problem’ facing the UK economy right now, 2022). The skilled Human resources
will also help TESCO achieve long0-term survival because of shortage in UK labour
market.
Answer to the Question no. 3
The PESTEL analysis is a tool used for understanding the external environment of
an organization. it consists of six components which are political factors economic factors
social factors technological factors legal factors and environmental factors. Application of
the PESTEL analysis helps businesses evaluate the external environment forces affecting
their company so that a clear idea of the external industry environment and changes can
be understood (Zentner and et. al., 2020).
Advantages:
 Simplistic: The primary advantage of PESTEL analysis is that it is simplistic in
nature which means that it can be easily applied by anyone after getting basic
understanding. the only requirement for applying the pastel analysis accurately is
knowledge of business management so that it can be applied in the context of a
specific business or a product. in comparison to other analytical tools which require
prior understanding of specific areas such as statistics or IT skills the PESTEL
analysis only requires good understanding of business management so that it can
be appropriately applied on the company. in this way it helps higher accessibility.
 Supports strategic thinking: Another advantage of PESTEL analysis which
makes it suitable for business environment analysis is that it supports strategic
thinking. After evaluating the six major complaint which affect external environment
of the business including political economic social technological legal and
environmental aspects a business is able to use this knowledge to form suitable
strategy through which it is able to maximize opportunities and lower threats. This
advantage makes the PESTEL tool is highly effective in case of strategic
management and strategy formation (de la Rosa and et. al., 2019).
 Minimize risks: PESTEL analysis is highly useful for businesses because it helps
identify the risk presence in the external environment by analysing it from different
perspectives such as political economic and social. in this way businesses can
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create a strategy which minimizes risk by implementing appropriate risk mitigation
plans and ensuring that they get success in various business endeavours.
 Structured: The PESTEL analysis provides a structured analysis to the external
environment of a company which can be easily understood by the stakeholders
associated with the organization. this makes it a suitable tool to communicate
external business environment situation in business meeting we are different
stakeholders are involved.
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Reference List
Books and Journal
de la Rosa and et. al., 2019. PESTEL analysis with neutrosophic cognitive maps to
determine the factors that affect rural sustainability. Case Study of the South-
Eastern plain of the province of Pinar del Río. Infinite Study.
Grant, R. M., 2021. Contemporary strategy analysis. John Wiley & Sons.
Huma, S. and Ahmed, W., 2022. Understanding influence of supply chain competencies
when developing Triple-A. Benchmarking: An International Journal.
Jean‐Paul and et. al., 2020. The effect of sociodemographic diversity of residential
customers on the financial risk experienced in the retail electricity
market. International Journal of Energy Research, 44(14). pp.11676-11690.
Jelonek et. al., 2022. Comparative analysis of business strategy of Vietnamese real estate
developers: the use of Hoffer matrix.“. International journal of multidisciplinary
research and growth evaluation, 3(1). pp.197-204.
LEE, K. K., 2022. A Study on 7-Eleven's Core Competencies: Focusing on the VRIO
Model. International Journal of Advanced Culture Technology, 10(1). pp.67-74.
Quenum and et. al., 2021. Resilience of business strategy to emergent and future
conditions. Journal of Risk Research, 24(7). pp.870-888.
Rodrigue, J. P., 2020. The distribution network of Amazon and the footprint of freight
digitalization. Journal of transport geography, 88, p.102825.
Sallos and et. al., 2019. Strategy and organisational cybersecurity: a knowledge-problem
perspective. Journal of Intellectual Capital.
Shamir, E., 2021. How leaders exercise emergent strategy? Lessons from Moshe
Dayan. Journal of Strategic Studies, pp.1-24.
Zentner and et. al., 2020. A Comparative PESTEL Analysis of Canada and China's
Management of Energy Markets. Journal of Applied Business &
Economics, 22(12).
Online
Labour shortages: the ‘most urgent problem’ facing the UK economy right now, 2022.
[Online] Available through
<https://www.theweek.co.uk/business/economy/956951/labour-shortages-urgent-
problem-economy>
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