Strategic Management: Approaches, Competitiveness, Core Competencies

This report provides a comparative analysis of prescriptive and emergent approaches to strategic management, highlighting their roles in achieving organizational goals. It discusses the advantages and disadvantages of each approach, using examples such as Sainsbury's and Apple. The rep...Read More

STRATEGIC MANAGEMENT

Table of Contents
INTRODUCTION.....................................................................................................................................3
SECTION 1..............................................................................................................................................3
Question 1.........................................................................................................................................3
SECTION 2..............................................................................................................................................6
Question: 2........................................................................................................................................6
Question 4:........................................................................................................................................8
CONCLUSION.......................................................................................................................................10
REFERENCES........................................................................................................................................11

INTRODUCTION
Strategic management is ongoing planning, organising, integrating and monitoring
each and every activity that organisation required in order to meet its desired goals and set of
objectives. In current scenario, the external environment is every changing in nature,
therefore it is crucial for firm to change its strategy as per situation to stay ahead in
competitive market. This report has presented crucial information pertaining to compare and
contrast the application of ‘prescriptive’ and ‘emergent’ approaches to strategy and its role in
achievement of aim. Furthermore, it has covered comparison of two analytical models for
competiveness analysis and how the core competencies helps in attaining sustainable
competitive advantages.
SECTION 1
Question 1
Compare and contrast the application of ‘prescriptive’ and ‘emergent’ approaches to
strategy and their role in the delivery of this aim
In formulation of organisation strategy, there is high complexity and uncertainty that has
to be face by manager while working in the organisation. Strategy are set of action that are
undertaken by company for achieving competitive advantages through making optimum use
of available resource, meeting the stakeholder expectancy and many more. while, formulating
a particular strategy, it is responsibility of the manager to identified and analysis the strength,
weakness, threat and opportunities of business (Fuertes and et.al., 2020). On the basis of all
these factor or element it need to take decision that could help company in achieving the end
goals.
1. Prescriptive approaches to strategy: It is the approach in which the objective,
mission, vision and value of the organisation are being clarified and defined before
implementation of strategy. In this method, the top management is being responsible
for formulating an specific strategy that could be used by firm to achieve the set goals
in limited time frame. In another words, a deliberate plan is made with intention and
priorities being set according to the top management of the organisation
(Velikorossov, and et.al., 2020). Furthermore, in this type of approach, top to down
hierarchy approach is being followed by the firm to guide employees about the way a
particular task will be completed and goals will be achieved. It is linear approach in
which first and foremost, efforts are being lead on analysis of the strategy, market

situation, on the basis of that strategy is developed and implemented. There are
various advantages as well as disadvantage of making use of perspective approach to
strategic planning that can be illustrated in detailed as follows:
 Long-term/strategic thinking: The advantage of making use of prescriptive
approach is that they contribute in long term thinking as manager incorporate each
and every activity while taking particular decision. It takes specific decision by
spending much time on analysis about what is actually happening in external
environment, what are the objective of the company. thus on the basis of all the thing
final strategy is being formulated by manager so that organisation can grow and
sustain in competitive environment (Siegel, and Leih, 2018).
 Learning from each other: Secondly, it can be stated that through making use of
prescriptive approach the employees learn from each other’s. As in this strategic
process involves harmonising and negotiation of different point of view in order to
integrate the corporate plan. Thus, it is also known as learning process.
 Coordinate efforts: Making use of prescriptive approach lead organisation in
effectively coordinating with range of individual that are belonging to different
culture, traditional and belief (Makadok, Burton and Barney, 2018). Clearly
communication of company mission, vision, values and objective among the
employees lead in motivating them to work for company expansion only.
On the contrary hand, there are some of the disadvantage of making use of prescriptive
approach such as
 It hinders creativity of individual: The biggest disadvantage of prescriptive
approach is that it hinders the creative ideas of employees that are working for growth
and expansion of business. As in this usually top- down management and organisation
structure is being followed that lead in eliminating of idea of individuals that could be
used by firm to achieve the desired outcome.
 Lack of flexibility: The second disadvantage of making use of prescriptive approach
is that it is lack flexible, as top management and strict organisation structure lead in
making difficult for company to quickly adapt its strategy as per the external
environment situation (Hitt, Arregle and Holmes Jr, 2020). Hence, it may not able to
effectively cope up with adverse situation or threat.

For example: Big organisation operating in retail sector of United Kingdom such as
Sainsbury have make use of Prescriptive approaches in which the top management is
responsible for planning long term strategy that could be used to firm to grow and expand its
business. Likewise, it has planned to make use of low differentiate strategy to attract more
and more customers within the organisation. This has helped company in creating strong
brand image in mind and hearts of maximum number of customers living within the society.
2. Emergent Approach to Strategic Planning: On the contrary note, it can be stated
that Emergent Approach is method in the strategic and operational decision taken by
manager contribute in finding emergent strategy. In this approach, the top
management not intentionally plan the strategy that could be used by firm to achieve
the set objective in specific time frame. In this strategies are being formulated as per
the interpretation of events, decision and actions that are being taken and complex
interaction between the lower management of the company (Bindra, Parameswar and
Dhir, 2019). Hence, in another words, it is approach that can be defined as unplanned
process, interactive and incremental approach that allow adaptability and flexibility as
per the changes happening in external environment. However, it can be said then
when the pattern of decision contributes in emergent strategy that it is being
documented by the organisation, in its annual report and strategic plan. So that they
can be used in future scenario. Emergent approach of strategy is important for each
and every organisation as it helps company in effectively adapting and learning as per
the situation.
 Less resistance to change: Emergent approach lead in less resistance to the change
by organisation as well as employees working in the firm. As strategy emerged
incrementally so different individual are already prepared for strategic changes and
implement them simultaneously (Khosiev and et.al., 2019).
 Company have ability to effectively exploit opportunity: Since the strategy made
by the company can be easily readjusted and shifted as per the change then they have
capabilities to make optimum use of available opportunity. At the same time,
employees are highly motivated to find out more creative idea, make optimum use of
available resources and opportunities.
 Facilitate innovation and success of firm: Emergent approach lead employees as
well as top management to think innovative ideas that could be used by firm that

could be used to meet the expectancy of customers. Thereby, firm by offering range
of innovative products is able to promote success of organisation and achievement of
end goals.
While, there are some of the cons pertaining to Emergent Approach that has to be kept in
mind by the companies to grow in highly competitive environment for many years. Such as
 Risk of strategic drift: It is one of the negative impact of making use of emergent
approach as there may be chances that the existing strategy may not be fit with
prevailing business environment. Moreover, while following the emergent approach
manager of organisation focus on short term goals as compared to long terms. It may
result in causing negative impact on firm that it is not able to grow and sustain for
many years (Henry, 2021).
 Pure emergent approach is impractical: In addition to this, this approach is
impractical for the organisation to adapt as it has no clear direction related to the way
a particular task can be completed. Likewise, it become much more difficult for the
manager of the company to justify its decision without having the set objective or
vision. Hence, it can be summarised that it become difficult for the organisation to
monitor overall performance and progress of the organisation in external environment
as there are no set targets.
For example: Apple as one of the leading brand in electronic good has make use of
emergent approach in which it changes its strategy as per the external environment
situation. The company is continuously ready to adapt its strategy with new technology
and trends happening in environment that has helped it in brining innovation and creating
image in mind and hearts of the customers (Makadok, Burton and Barney, 2018).
Furthermore, Apple through making use of the emergent approach is able to make
employees motivated to give their best or quickly adapt to external situation without
much resistances.
SECTION 2
Question: 2
Answer:
Core competences refers to the capabilities and resources of a company which helps
the companies in attaining benefits and profits for the company. Competition nowadays is so
intense that, the organizations are indulged in constant development and introduction of new

products and services to beat the competition (Donnellan and Rutledge, 2019). Sustainable
competitive advantage, on the other hand refers to the assets, abilities and attributes of
companies which are difficult to imitate by other companies and which provides the
companies a superior or long term advantage/position over the competitors. For example:
Powerful brand and product differentiation can be sustainable competitive advantage of a
company.
As per Mahdi, Nassar and Almsafir, (2019), the core competencies of a company are
its key to success, so they should be nurtured and developed. They are the resources which
helps the companies in attaining sustainable competitive advantage to the company. If the
companies are able to develop their core competencies, the companies have better chances to
beat the competitors as well as better chance to reap the benefits. Companies can attain the
competitive advantage through the introduction of innovations and creativity in its products
and services. in order to do that the companies try to fill niche target markets and then deliver
products more efficiently and quickly including enhanced product quality and better product
values. This is the thing which is most valued by the customers and they payback it through
their loyalty and commitment towards business. It also help the companies in establishing
essence of their brand on a wider level.
Similarly, Hifza and Aslan, (2020), states that, to attain long term sustainable
competitive advantages, the companies have to rebrand their products to fit existing market.
It needs the development of current core competencies which leads towards attainment of
those competitive advantages. In order to make the products or services sand put form
competitors in industry, the companies’ needs to exploit their resources to strengthen their
competencies. They determines their future directions based on how strong their
competencies are.
However, Singh and et.al., (2019), said that, the competitive advantage of the
company depends upon rareness, imitability and value of capabilities and resources. Due to
the intensity of competition, only those companies which have recognised their full potential
will be able to build new strategic assets cheap and faster to gain superior competitive
advantage as compared to the competitors. It should also be taken into account that the core
competencies and competitive advantage are the functions of various forces from demand and
supply side. The core competencies concept is different from the traditional thinking for
competing in cost differentiation strategy and market share.

According to Than and et.al., (2019), there are various business theories which states
the importance of core competencies such as the theory of core competencies. The theory stat
core competencies are the strategies of companies which describe the actions which should
be taken by companies to attain sustainable competitive advantages. The theory states the
companies should pay more attention towards the strengths in its functions and areas which
have core competencies. The theory also states through which the companies can create core
competencies. The focus of the theory is to create competencies which are difficult to be
imitated by competitors and also be reused in all across the markets. It also focus towards
creating strengths and functions which creates the values to end consumers as well as the
other consumers who benefits from it. In simple words, the organizations have to exploit their
strategies for taping in their core competencies and the core competencies are the basis for
value creation and for creation of sustainable competitive advantages.
Li, Clark and Sillince, (2018), also said that, competition is very intense now which
makes even the small business to face a number of competitors. In order to thrive and survive
in the market companies have to come up with ideas which makes it distinct from the
competitors. In order to do so the companies have to develop their core competencies because
core competencies are the factors through which it can attain sustainable competitive
advantages. Simply, it states that identifying a core competency and then levering it can help
the organization to gain sustainable competitive advantage.
For example: McDonalds face huge competition with the local food outlets. Through the core
competencies McDonalds have been successful to beat the competition. The company’s
competencies involves excellent food quality food at affordable prices as well as fast food
service. These core competencies of the company are difficult to match by the local outlets on
a global level. Therefore, through the core competencies, McDonalds is able to attain a
sustainable competitive advantage.
Question 4:
Answer:
Porter’s five forces analysis is the model or a tool which helps the companies in
analysing the business environment as well the competitive environment of company in
industry. The model was developed by Micheal E Porter in 1979 (Bruijl, 2018). The model
uses five forces for analysing competitive environment such as industry competition, power

of suppliers, power of substitute, power of consumers and threat of new entries. Analysis of
all these factors can help the company in boosting its profits and increases the earning for
investors of company as well. It can also provide better ways to company to take advantages
of its strengths, avoid making mistakes as well overcoming particular situations.
PESTEL analysis is an analytical tool which the companies use to determine the
external environment and the factors of external environment on the competition positing of
company in the industry. PESTEL analysis helps the company’s financial, marketing experts
as well as managers to analyse other factors aside from money at the time of making
decisions regarding company’s products or services (Pan, Chen and Zhan, 2019). It examines
the factors such as political, Economic, Social, Technological and Legal environment which
can influence the profits and sales of the company.
Both the models are significant analytical tools which aids businesses in improving
their competitive positions among the industry. In PESTEL analysis the powers of external
environment factors through individual analysis of all the factors. Whereas, in Porter’s five
forces analysis model the power of industry and its factors is analysed to gain inspection of
competitiveness of the company (Johannsdottir and McInerney, 2018). The model helps
management of an organization to determine the structure of industry as well as the profit
margins in it. The PESTEL analysis on the other hand, helps the companies in developing
strategies through which they can maximise opportunities and profits as well. Porter’s five
force analysis can be carried out on any time by the company. It can provide valuable insights
to the company. PETEL analysis can be used to analyse the perspective of new markets.
Porter’s five forces model can be used before entering the industry as well as after entering
the industry. It can also help the company in analysing the barriers and limitations for
entering and exiting an industry. The PESTEL analysis can be carried out before entering the
industry on national and international level. It helps in analysing if the market conditions are
favourable to business or not. But the Porter’s five force model focus on analysing ways to
achieve advantages of strengths and avoid/ conquer the weakness and exploit opportunities as
well as helps in eliminating mistakes which can affect the competitive position of the
company in industry (Ortega and et.al., 2019).
The key advantage of Porter’s five forces analysis is that it helps in gauging the
competition in industry. It also helps the company in planning for investments, strategies as
well as helps in dealing with the suppliers and customers (Sadq, Sabir and Saeed, 2018). The

major benefit is that it can help the company in analysing its competitive position among
industry and helps in gaining competitive edge using that position as well. Also, the
application of this model does not need any special skills. The primary benefit of PESTEL
analysis is that it is a simple framework and facilitates broader and better understanding of
business environment. He model encourages internal as well as external strategic thinking
and decision making. It also enables the companies to anticipate the future business threats
and aids it to minimise the impacts (Kairuz and et.al., 2020).
Porter’s five forces analysis limitations involve the factor that it fails to analyse other
factors such as political factors i.e. taxation’s influence on business. Another issue with this
model is that as per its framework no industry is perfect and no company can fit
appropriately. Also, the model is not useful for all the companies such as fashion industry and
technology where consumer’s taste, demand and preferences plays a major role than any
other factors (Wati, 2018). However, there are some limitations of PESTEL analysis too. The
model sometimes oversimplify the data which is used for decision making and it works on
assumptions only which includes remains of risks of being wrong. PESTEL analysis needs to
apply regularly as application of the model once in a while do not works. The constant
changes makes it hard for the companies to anticipate the developments which might effect in
the future (de la Rosa and et.al., 2019).
CONCLUSION
From the above report it can be concluded that there is huge difference between the
emergent and perspective approach used in formulation of strategy by the organisation. The
study has helped in summarising that prescriptive approach contributed more involvement of
the top management in the strategic decision making for benefits of company. While, in
emergent approach, lower employees point of view is also being considered while planning
strategy for greater outcome in limited time possible. At last it can be concluded that dynamic
nature of environment contributed companies to make effective use of emergent approach to
stay ahead in competition with other organisation. The relationship between core
competencies and competitive advantages have also been analysed. Porter’s five forces and
PESTEL analysis are two different models which helps in analysis of competitiveness of a
company within the industry.

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