Analyzing Approaches to Business Strategy Formulation

The provided text presents an analysis of multiple strategies for formulating business plans. It incorporates various academic perspectives on how organizations can effectively develop and implement strategies to enhance performance and achieve long-term goals. The document references several scholarly articles that discuss the importance of stakeholder management in shaping organizational behavior within family businesses, as well as risk-taking and financial expectations in such enterprises. Notably, it highlights the significance of strategic leadership in fostering innovation and impacting entrepreneurial ventures. Furthermore, the text explores how legacy orientations influence firm performance in family-owned businesses and examines corporate social responsibilities across different industries and timeframes. Overall, this comprehensive review integrates insights from numerous studies to offer a multifaceted understanding of business strategy formulation.

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Name of the Student:
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Author Note:

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Executive summary
The report discusses the importance of strategic management approaches in the organizations.
It is essential for the success of the organizations. The report has assumed and proved the
importance of strategic management to the organizational success. It attempts to study as well
as capture the best approaches for formulation and implementation of business strategy. The
purpose of this report is to reveal three approaches namely positioning approach, dynamic
capabilities and learning focussed approach to identify their effectiveness in forming
strategies for the organizations. The report discusses Viability of each approaches, benefits,
various implementation issues and limitations.

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Table of Contents
1.Introduction:............................................................................................................................2
2.Different approaches:..............................................................................................................3
2.1 Positioning approach:.......................................................................................................3
2.1.1 Viability:...................................................................................................................3
2.1.2 Benefits:....................................................................................................................3
2.1.3 Implementation issues:..............................................................................................4
2.1.4 Limitations:...............................................................................................................5
2.2Dynamic capabilities:........................................................................................................5
2.2.1 Viability:...................................................................................................................6
2.2.2 Benefits:....................................................................................................................6
2.2.3 Implementation issues:..............................................................................................8
2.2.4 Limitations:...............................................................................................................8
2.3Learning focussed approach:.............................................................................................8
2.3.1 Viability.....................................................................................................................9
2.3.2 Benefits.....................................................................................................................9
2.3.3 Implementation issues...............................................................................................9
2.3.4 Limitations................................................................................................................9
3. Conclusion:............................................................................................................................9
4. References:.............................................................................................................................9

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1.Introduction:
Strategic management is the methods that help the organizations to manage their
resources in an appropriate way so that they can achieve their goals or objectives. strategic
management includes few steps like setting of the objectives, analysis of internal
organization, evaluation of strategies and assuring that the management implement these
strategies across the institution (Xi et al. 2015). For the present world, management strategies
have become business buzzwords. Top executives in the top international companies have
started to ponder the strategic missions and objectives, the managers rough out market
strategies, operational chiefs find strategies from research and development to raw materials
sourcing as well as distributor relations. The strategic management includes identification of
the methods how the companies stack up in compared to their competitors (Ghezzi,
Cortimiglia and Frank 2015). It also involves the appropriate recognition of the available
opportunities and threats faced by the organizations which either come from the competitors
or the organizations within.
In most of the organizations, there are several levels of management. Strategic
management is the most important because it approaches all the segment of a firm. It aids the
corporations with guidance to corporate values, culture, goals and missions. The positioning
approach of strategic management helps the corporation to understand its position in the
market and the ways through which it will get proper exposure (Debicki, Van de Graaff
Randolph and Sobczak 2017). The approach involves the branding plan based on business
data. The dynamic approach helps the companies to translate the strategic ambitions of the
leadership into required specific actions so that it can overcome the strategic execution
failures. The learning approach focusses on the learning from the complex and unpredictable
nature of the environment of the organizations.

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2.Different approaches:
2.1 Positioning approach:
The positioning approach is a plan which distinguishes an organization from a sea of
similar competing organizations in a way that designs the corporation to be more attractive to
the potential consumers in compared to its competitors. The chief elements of the positioning
approach are first it differentiates the firm itself from others and secondly it appeals to the
potential group of buyers (Debicki, Van de Graaff Randolph and Sobczak 2017).
2.1.1 Viability:
in order to differentiate the firms from others, they follow some specific ideology that make
belief that their people as well as process are the best. Professorial services corporations are
build around their employees because their success largely depends on the talents and
qualities of their employees. Every companies demand that their own processes are the best
and offers best exposure (Ghezzi, Cortimiglia and Frank 2015). The firms often claim to
be100% committed to do exceptional works in order to create differentiation but many of
their competitors also claim the same which increases competition. However, the claims of
excellent services and best products often becomes cliché as all the firms claim the same
therefore the business complete depends on the appreciation of the clients.
2.1.2 Benefits:
the positioning approach aids the firms to hire exceptional people for differentiating
the firm in the market (Marvel, Davis and Sproul 2016). It allows to realise the
underperforming departments so that they can be easily checked and strengthened.
In positioning strategies, the superior process allows for flawless communication, task
completion before deadline and mistakes are checked and sorted before the clients
check them.

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It builds reputation and provides competitive advantage as the firms feel
encouragement to provide best and excellent works every time (Hammond, Pearson
and Holt 2016).
Customer service is the chief approach of the companies which builds great
relationship with the customers’. This is why the operational teams become more
responsive, good listeners, dynamic and proactive.
Through this approach the entire firm becomes market oriented. They find out the
demands of the clients and customers to differentiating them from their competitors.
It helps the firms to cope up with the constantly changing markets, its new
developments, new scopes for competitive advantages to suit the customers changing
expectations (Bettis et al. 2016).
It makes the firm potent enough to win the attention as well as attractions of the
customers by the means of suitable advertisements. They reach more consumers and
clients and earn their loyalty.
Making the firm different from the others the management always try to communicate
with the clients as well as different kinds of customers do that they can add more and
varied features to their products or services (Daspit et al. 2017).
Product positioning is one of the important aspect of positioning approach where the
consumers are allowed to consider product’s advantages before purchasing it.
Therefore, product positioning has proved superiority of offers by the company over
its competitors. It may also help consumers in choosing the right product.
2.1.3 Implementation issues:
 positioning approach is difficult as the fact that even if the firms appreciate the
employees’ talents, they do not get appreciation from the stakeholders.

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 The complex services are difficult to process as the firms has to choose different
service providers. The less qualified clients ask for seeing their process as well as the
indicators.
 The firms often fail to maintain what they claim due to losing tenacity and dedication
(Daspit et al. 2017).
 Exemplary services are quite hard to prove therefore building better customer
relationships becomes challenge.
 Strong positioning needs to be built on self-evident attributes or else service remains
only as a word but most of the firms do not possess credible supporting evidences.
2.1.4 Limitations:
There are various problems in positioning approach. First of all, the corporations lose
reliability for differentiating themselves by focussing on their stakeholders (Hammond,
Pearson and Holt 2016). The client often stops believing such assurance. Secondly, the
companies themselves announce that their people are the best but lose when they do not get
the same appreciation from their customers or the clients (O’Neill 2016). In positioning
approach, the firms are to show their references and testimonials but even the meddling firms
have few satisfied customers.
2.2Dynamic capabilities:
The dynamic capability strategy analyses the firm’s sources and devices of wealth
creation by capturing the firm’s operation in the rapid and technologically changing
environment. the competitive advantages of the firms have been seen to be resting in its
distinctive processes such as its coordination, designed by the asset positions of the firm and
adopted evolution paths. The method and reason of gaining the competitive advantage largely
depends on the market demands, imitability and replicability of the firms (Hill, Jones and
Schilling 2014). The necessity of path dependencies gets simplified when conditions of

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growing returns exists. The dynamic strategies involve identification of new opportunities
and embracing them by strengthening internal organizational and technological aspects of the
firm.
2.2.1 Viability:
Dynamic approach aids the organizations to discover the opportunities and organise
them efficiently and effectively in the organization so that they can be embraced
fundamentally to private wealth creation (Pearson, Bergiel and Barnett 2014). Strategizing
help the companies engaged in the business conduct in order to keep the competitors off
balance, increases costs of the rivals and excludes fresh entrants (Hill, Jones and Schilling
2014). Dynamics speak to mastery, process as well as speed through which the firms adapt
their resources for responding to the changes in marketplace and to the constant emerging
opportunities. These include excellent technical methodologies, intellectual property or
Patents, business process knowledge and speed, the eminence of customer or business
relationships, strength of culture and values of the organizations and the strength of their
resources such as human, assets and economy (Kramar 2014).
2.2.2 Benefits:
The chief benefits of being dynamic evolves round gaining competitive advantages
over the rivals (Pearson, Bergiel and Barnett 2014).
It allows the companies to incorporate innovations so that they can respond to specific
situations or environment of the market for instance the appropriate time to rent the
market.
The dynamic strategies allow the firms to introduce swift alterations in the arena of
technology so that they can gain more advantages and upgrade fast with changing
market.

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It creates scopes for prospective competition where the market ascertains the dynamic
nature which eventually prove to be vital for sustained competitive advantages
(Rosemann and vom Brocke 2015).
Dynamic capabilities strategy reflects the’ strategic ambitions of the leaders into
particular actions, clearly designing the activities for enabling the administrations to
adapt to the changing conditions as well as investing in exertions.
It encourages the corporations to embed newer and upgraded skills and organizational
behaviours.
This methodology enables the management teams to establish and sustain a vibrant
and engaging information system strategies to confidently assure to handle complex
as well as nuanced strategies efficiently (Kramar 2014).
Dynamic capabilities allow the firms check and correct the weak sections of the
organizations. New information is gathered by identifying problems which require
rapid course corrections or the leading indicators signalling that some changes in
direction is needed.
It increases the contextual awareness of the leaders by imploring diverse perspectives.
They leverage the scenario-planning as well as environment-scanning apparatuses to
anticipate the changes (Mahto and Khanin 2015).
The dynamic capabilities approach helps the individuals develop newer competencies
as well as results to gain the sustained performance improvements.
This strategy can help to address the organizational resistance which often torpedoes
the implementation efforts (Simsek et al. 2015).
dynamic approach of strategic management adopts different mixture of moderate
activities in initial stages of implementation by highlighting the ones which set the
stages for managerial learning.

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Dynamic capability approach produces concrete deliverables as well as value in the
initial stages, increase learning, alignments and enthusiasm (Bettis et al. 2016).
dynamic approach for strategy implementation, the companies can possibly upsurge
the odds of efficiently translating, adapting as well as sustaining innovative strategies.
2.2.3 Implementation issues:
Enhancing dynamic capabilities in a firm is the toughest aspect of setting and
implementing strategies. It often becomes difficult for the companies to adapt, integrate or
build new changes in the firms (Mahto and Khanin 2015). Reconfiguring internal as well as
external competences for addressing the rapidly changing market environments pose to be
threat for the small and medium corporations as they have limited resources to react
sufficiently and judiciously to the external changes (Short et al. 2016).
2.2.4 Limitations:
 Building institutional capabilities necessitates significant efforts from evidently
defining current as well as desired capabilities for designing the integrated systems of
assets including activities which build and sustain them (Rosemann and vom Brocke
2015).
 As mentioned before the adaptation procedure needs complete or partial changes in
the technical systems to grow and sustain it but not all the organizations can be able to
bring such changes in limited time (Bergh et al. 2016). Therefore, without proper and
adequate structure it will initiate a negative effect on the firm.
2.3 Learning focussed approach:
Learning focus approach of strategic management focuses on the origin of the
strategies emerging from learning process. This process involves the experiences from which
the people of an organization learns to gain knowledge and face the similar situations in

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future (Tarakci, Ates and Wooldridge 2015). It captures the experiences both individual as
well as collective build common patterns for paving way to learning (Moura-Leite, Padgett
and Galán 2014). The organizational learning approach helps the companies to know all the
tricks of the trade therefore beneficial for gaining more competitive advantages.
2.3.1 Viability:
Learning approach strengthens to companies in such a way that they become able to
approach the organizational processes. The strategy of organizational learning is the most
important of all as a minute change in the organization can be effective to bring disaster.
Therefore, learning all internal and external elements is essential for the management teams
(Bergmann and Stephan 2013). This approach views the organizational change both from
psychological as well as relational perspectives. The leaders of the firms can be able to
approach the organizational processes and eventually the attain the organizational changes
from the standpoint of three main communities such as academics, consultants and the actors
involved in the operation of an organization (Georgakakis and Ruigrok 2017).
2.3.2 Benefits:
Learning approach helps the organizations to gain knowledge as well as insight
through the evolved theories, methodologies and the models in the field of
organizational development and learning.
The organizational learning makes the organizations capable to integrate, relate,
compare finally critically evaluate the acquired knowledge and skills (Moura-Leite,
Padgett and Galán 2014).
This approach aims to change the people of an organization including their shared
thought as well as actions. These are often moulded and embedded by the demands of
the institutions.

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As learning process is essential to recognise the requirements of the clients and the
stakeholders, it increases the resources of the organizations according to the demands.
This is the primary stage through which the constant changes can be recorded and
thus involves facilitation of learning. By supporting as well as increasing individual
knowledge, embedding them into teams through discussion, experiences sharing,
dialogues and more particularly through observation (Moura-Leite, Padgett and Galán
2014).
2.3.3 Implementation issues:
Despite the fact that the learning approach of strategic management is not very
difficult to implemented for the heads of the organizations but the studies reveal that the
learning approach plays a very trivial role in formation of the organizational strategies in
reality (Bergh et al. 2016).
2.3.4 Limitations:
 Learning focussed approach has imitations in formulating effective strategies as they
delinked the management firm operations.
 The organizations have a great variety of people therefore, applying learning approach
do not have proper reach to all the employees.
 small actions or decisions which are often born out of chance over time become key
drivers of the change in strategic directions of the firm.
3. Conclusion:
Therefore, it can be concluded that this paper discusses three of the most important
approaches used for developing the business strategy in the organizations. It indicates that
strategy management tactics in diverse organizations has been developed through various
strategic approaches. These approaches are normally different from one another in terms of

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their scopes, complexity and strategic focus. In addition, the report also reveals that every
approach has their own sets of limitations.
The importance of these three approaches to the organizations depend on the methods
of utilization in business strategy. These strategic approaches refer to the specific arenas
which the particular strategy aims to target. All of these approaches have difficulties in
implication in the organization but also have numerous benefits which mainly help the
organizations to gain the competitive advantages. according to the researchers in their field,
the organizations need to first identify their own strategic focus then extend the scopes before
attempting to adopt them. The most important fact is that the organizations stand an improved
chance of expressing their own operative business strategy through developing their own
abilities for sizing up and realise the sense of business activities. The companies are
becoming more conscious of the incessant changes taking place in their corporate
environment. More importantly, for the organizations increasing their capabilities, they need
to primarily develop proper competencies then seek innovative strategic directions as well as
identify strategic initiatives. The organizations will be able to identify and develop the most
suitable approaches to formulate as well as implement more operative business strategies
with the help of competencies, strategic directions supported by initiatives.

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4. References:
Bergh, D.D., Aguinis, H., Heavey, C., Ketchen, D.J., Boyd, B.K., Su, P., Lau, C.L. and Joo,
H., 2016. Using meta‐analytic structural equation modeling to advance strategic management
research: Guidelines and an empirical illustration via the strategic leadership‐performance
relationship. Strategic Management Journal, 37(3), pp.477-497.
Bergmann, H. and Stephan, U., 2013. Moving on from nascent entrepreneurship: Measuring
cross-national differences in the transition to new business ownership. Small business
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Bettis, R.A., Ethiraj, S., Gambardella, A., Helfat, C. and Mitchell, W., 2016. Creating
repeatable cumulative knowledge in strategic management. Strategic Management
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Daspit, J.J., Chrisman, J.J., Sharma, P., Pearson, A.W. and Long, R.G., 2017. A Strategic
Management Perspective of the Family Firm: Past Trends, New Insights, and Future
Directions. Journal of Managerial Issues, 29(1), pp.6-29.
Debicki, B.J., Van de Graaff Randolph, R. and Sobczak, M., 2017. Socioemotional wealth
and family firm performance: A stakeholder approach. Strategic Issues in the Family
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Georgakakis, D. and Ruigrok, W., 2017. CEO succession origin and firm performance: A
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Hammond, N.L., Pearson, A.W. and Holt, D.T., 2016. The quagmire of legacy in family
firms: Definition and implications of family and family firm legacy
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