Strategic Management: Analysis of Approaches, Core & Innovation

This essay provides a comprehensive analysis of strategic management, comparing prescriptive and emergent approaches, highlighting the role of core competencies in achieving a sustainable competitive advantage, and examining the benefits, costs, and risks associated with using innovation to drive long-term organizational development. It delves into how prescriptive strategies offer clear goals and defined roles but can be inflexible, while emergent strategies foster adaptability and employee innovation but may lack long-term direction. The essay further elaborates on how core competencies differentiate a company in the market, create customer value, and facilitate the development of innovative products and services. Finally, it discusses how innovation, while beneficial for long-term growth, carries potential costs and risks that must be carefully managed. The essay emphasizes the importance of understanding these strategic elements for any organization seeking to thrive in a competitive business environment.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
Section 1...........................................................................................................................................3
Compare and contrast the application of prescriptive and emergent approaches to strategy.3
Section 2...........................................................................................................................................6
Role of Core Competencies in developing Sustainable Competitive advantage...................6
Benefits, Cost and risks using innovation to drive long term organisation development......8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management is an activity of setting up goals, objectives and procedures through
which company can succeed in market and gain competitive advantage. Through strategic
management company gets a direction to achieve the business goals and objectives. There are
five stages of strategic management process they are goal setting, conducting analysis,
formation, implementation and monitoring (Pfarrer and et. al., 2019). The main motive of
strategic management is to help companies so that they can compete in market and gain
competitive edge. The strategic management are of three types they are business strategy,
operational strategy and transformational strategy. Strategic management helps in developing
objective oriented approach by using three components they are environmental scanning,
strategy implementation and strategy evaluation (Ketchen Jr, and Craighead, 2020). It mainly
focuses on providing continuous enhancement due to which consumers can achieve high quality
products. The Essay is based on strategic management in which the comparison of prescriptive
and emergent approaches to strategy is determined by highlighting its role in delivering the aim.
It also covers the role of core competencies in developing sustainable competitive advantage and
the benefits, costs and risk of using innovation to drive long term organisational development.
Section 1
Compare and contrast the application of prescriptive and emergent approaches to strategy
Strategy helps in providing the long term direction though which company can achieve the
changing business environment and gain competitive advantage amidst resource constraints.
Strategic planning is a procedure through which the internal and external environment of
Company can be analysed. The prescriptive approach to strategy means when three core areas of
strategic management are connected to each other in sequential way whereas emergent approach
to strategy means when strategy is implemented by conducting the tests and trial. The
Organisation develops clear strategies in order to make business successful and sustain in market
for long run. After creating a strategy it is necessary to communicate these strategies to their
employees and also set the tone according to which employees have to interpret and utilise the
strategy (Vitolla, Rubino and Garzoni, 2017). Through prescriptive approach, the role of staff in
accomplishing the strategy is clearly defined due to which they can able to perform well in
Organisation. There are various benefits of implementing prescriptive approach to strategy such

as staff members can understand the foals and processes of organisation in efficient and effective
manner, hierarchy of Organisation is clear to employees, the objectives are clearly stated due to
which the success can easily be measured and also the company can easily allocate the resources
in order to make the efficient decision without creating any wastage (Lazareva, Anopchenko and
Lozovitskaya, 2016). But there are also drawbacks of prescriptive approach to strategy as it is
not flawless. The approach is based on prescribed plan of action which makes it very inflexible,
even the company has to face various challenges and issues by implementing prescriptive
approach to strategy and managers can find themselves lost and overwhelmed. The
disadvantages of prescriptive approach to strategic management include the mistake which is
incurred by Owners that can also reduce the progress of company even employees can also feel
that their contribution is not valued. It is a rigid strategy which can lead to unproductive
outcomes and excessive bureaucracy. The prescriptive approach can also difficult to adapt the
changing environments and also create an impact on the business opportunities of Organisation.
Prescriptive approach to strategic management generally means to create a map in order to
achieve the specific goals. The Strategy must be cleared to employees so that they can take
initiative to achieve the business goals. Through this approach the managers can easily determine
the current situation on the map at any time. In prescriptive approach to strategy planning the
vision, mission, approach and core values are defined clearly before strategy implementation is
started. The prescriptive approach follows the authoritative management style and hierarchical
structure. The top management of Organisation usually create a plan and formulate a deliberately
strategy according to the intention and priorities. The approach focuses on long term plan as the
objectives is clearly defined due to which the manager encourage their decision, inactions and
actions related to the long term performance of company. As the strategy of business is clearly
stated it becomes easy for the manager to coordinate the efforts with employees so that they can
give productive outcomes (Gavel'O, 2017). For example, If McDonald’s implements prescriptive
approach to strategic management they have clearly define their objectives to their staff due to
which they can perform well in Organisation and also achieve the business goals and processes.
Emergent approach is another approach to strategic planning in which manager make
strategic decision and operational decision from time to time according to the certain pattern.
The Strategy which is developed by the Organisation is interactive, unplanned and incremental
process through which company can easily adapt when business environment changes. By

implementing the emergent approach, manager develops a plan for short term and also they can
learn about the new experiences and knowledge.
The Emergent approach helps manager to gain new experiences, learn new ways of doing
things and take low risk. There are various benefits of using emergent approach of strategic
planning as it creates less resistance to change. The Employees of the Organisation usually
prepared for strategic changes because the strategies are formed and implemented
simultaneously. The Organisation faces high resistance when radical changes are formed and
implemented in business (Koloushani, Nasri and Rezaei, 2019). Through emergent approach of
strategic management company can exploit the opportunities by readjusting and implementing
the tactics so that company can easily respond to changes in environment. The firm can also gain
chances to get success as the strategies are implemented on the basis of experimentation,
learning and trial or error. The learning helps organisation to improve their skills and knowledge
in order to accomplish the work with effective and efficient manner. The approach also helps in
motivating the employees as they know their mission, objective and vision due to which they can
able to contribute their best efforts in accomplishing the goals and objective of company. The
Highly motivated employees can contribute their best efforts in making business successful and
produce their innovative and creative ideas through which organisation can compete in the
market. The Emergent approach also facilitates the strategic innovation which also develops the
learning features in Organisation. It also helps in learning the new ideas that helps in emerging
from lower levels of Company and encourages the individual creativity, innovation and
invention (Tekin and Konina, 2017). There are various drawbacks of emergent approach such as
company have a possibility of short termism they have to create a formal strategic plan that can
provide a direction as without plan, firm can focus on short term performance rather than long
term direction of company. The Strategy is developed incrementally due to which organisation
cam face risk of strategic drift and it can also influenced by culture. The emergent approach is
considered as impractical approach as there is no clear direction and even manager may feel out
the control. For example, McDonald’s implements emergent approach they have to encourage
their employees so that they can give productive ideas which is unique from competitors and also
helps in gaining competitive advantage in Market.
Both the approaches have advantages and disadvantages which company must considered as
it depends on the business environment of company. The Emergent strategy focuses on

innovation and ideas which is submitted by employees that helps in increasing the morale, makes
worker feel empowered and improve the work culture.
Section 2
Role of Core Competencies in developing Sustainable Competitive advantage
Core competency is a feature through which company can stand out from the other
organisation in Market. In simple words core competencies means that the attribute in which
firm is different from its competitors and gain competitive advantage in Market by attracting
more and more customers towards the business. Each and every organisation has unique skills
and knowledge due to which they can offer different and innovative from other companies.
Through these skills and strength firm can easily grab the attention of more and more customers.
The Core competencies can distinguish the products of Organisation from its rivalry in terms of
cost, features and other attributes. It also helps in creating customer value and increase the brand
image of the company (Ethiraj, Gambardella and Helfat, 2017). The Core competencies also help
in developing and creating innovative products and services through which company can succeed
in Market. Developing core competencies can lead to sustainable competitive advantage as
companies get stronger in market when they have any core competencies. The Organisation can
achieve the competitive advantage in number of ways but they have to follow the procedures and
strategies which must be used in order to gain success in Market, the strategies are cost
leadership, market segmentation and differentiation.
The Cost leadership is a strategy which is implemented by the organisation with an aim to
reduce the price of products and services. The Company that adopts cost leadership approaches
to lower the price of its products and services in order to attract maximum number of customers
towards the brand. It is one of the effective strategies which can helps organisation to grab the
attention of customers and create a strong customer base that also helps in increasing the
goodwill of company. The firm can achieve cost leadership strategies by focusing on improving
their efficiency and performance in Market. Through cost leadership, firm has to focus on
offering goods and services at low price but without reducing quality of products. The motive of
implementing cost leadership strategy is reducing the price through which they can gain loyalty
of customers and develop a strong customer base by serving high quality goods and services. The
Organisation must focus on reducing the extra expenses, lowering overhead manufacturing cost

and also reducing the production of goods and services so that they can provide greatest value to
people. The other strategy which company can use is differentiation, by implementing the
strategy company has to focus on providing the products and services to customers that is unique
and different from other competitors through which they can gain competitive advantage and
succeed in Market. Through differentiation strategy, firm has to focus on providing highest
quality products, reaching more customers quickly and delivering the services faster to
customers (Augier and Marshall, 2017). The Differentiation strategy is implemented when
company has some unique and different ideas which they can add in its products and services
and attract large number of customers towards the brand. The business can earn high profit
margin if they are able to attract customers with its innovative and unique products and services
to customers. For example, KFC provides unique chicken which nobody can make, they focuses
on attracting the consumers by offering craveable taste of chicken.
The other sustainable competitive strategies component is Market segmentation, the
company has to focus on particular market segment in order to sell the products and services.
The Organisation must understand the needs and requirements of the target market and produce
the products and services accordingly in order to create strong customer base and gain
competitive advantage in Market (Hodgkinson and Healey, 2018). The market segmentation
means focusing on particular niche market that helps in increasing the brand awareness and value
of business. For example, most of the companies sell their products and services according to the
need and demand of customers, they select the particular group of people who are willing to pay
more amounts for the products and services which is offered by Organisation due to its high
quality.
There are various benefits of core competencies it helps in increasing the profitability and
growth of business. Company can use their innovative ideas in order to produce effective and
efficient products that help in fulfilling the demand of customers. By targeting the particular
market segment company can gain deliver their products and services to customers quickly and
efficiently due to which the customer experience get improved. The Core competencies also help
in increasing the brand image and value through which they can attract more and more customers
towards the Organisation. The firm must know its core competencies and even they must
develop their core competencies in order to gain sustainable competitive advantage and also
utilise their resources efficiently and effectively with appropriate manner.

Benefits, Cost and risks using innovation to drive long term organisation development
Innovation is an implementation of new ideas in products and services that helps in
improving the productivity and performance in Market. Innovation is a technique to increase the
brand image and value of Organisation. In other words innovation means to improve and replace
the goods and services that help in gaining competitive advantage in Market. The Companies
generally use innovation in order to improve the productivity, brand recognition, turnover and
enhance the competitiveness level in Market. Through innovation organisation can offer better
quality of products to its customers that helps in satisfying the need of customers due to which
they can maximise profit and productivity level of business. It also helps in reducing the
environmental issues as well as legal issues as company mainly focus on reducing the carbon
emissions and produces less waste with changing products and services legislation. Innovation
also helps in adding more values to as it helps in establishing the unique selling proposition for
product through which company can differentiate its goods and services from competitors. It is
important for the businesses to implement the change management process in order to improve
the performance and growth of business. The Company must work according to the latest trends
and technology than only they can able to succeed in Market. By adopting new technology in
business unit organisation can bale to produce more effective products for their customers that
help in creating strong customer base and improve their experiences with the goods and services.
Through innovation firm can create more effective products, ideas and processes through which
they can enhance their growth and sustain in Market for long period of time. Nowadays,
companies are focusing on implementing the change due to COVID 19 in order to survive in
market in this tough time (Kalyuzhna, Pisarenko and Nesterenko, 2018). The Organisations are
facing huge loss which affects the profitability and performance of businesses in Market due to
which they are taking initiative to implement the new strategy and idea to attract customers. For
example, Marks and Spencer has started online food delivery process as they were facing huge
loss in pandemic so they implement effective idea to reach their customer by offering food
delivery at their home. Through online food delivery Services Company can able to sustain in
Market and improve their performance and productivity.
There are various risks which are associated with innovation; company may face loss if
innovation may not get successful in Market. Innovation is a risk as company might face failure
due to which their reputation and image get into stake. It is very costly and time consuming

process which requires a proper strategy and plan through which they can produce new product
and services. The Organisation can also run out of money if they had invested a lot and don’t
launch the products and services in Market quickly. By innovating the goods and services there
is a risk which can hinder the long term organisation when the resources get wasted and firm is
not able to sell their products and services to customers. The other risk which firm can face is
reputation risk as it creates a huge impact on the reputation of the company when they are not
able to attract the customers with their innovative products and services. For producing the new
products and services, Organisation has to convince and take the suggestion from their
employees so that they can give better ideas to manager, if in case staff doesn’t know about the
new goods and services it can create a huge impact on the performance of business. So, the
employees can also affect the innovation process by not contributing their best efforts in
implementing the change management process effectively and efficiently. The other risk of
innovation which company may face is meeting the need and requirement of customers, the
organisation produce the products and services by identifying the taste and preference of
customers so if they are not able to fulfil the need of people it can affect the profitability and
growth of business. The Organisation must invest in successful projects as if in case they invest
in unsuccessful innovation project they might face heavy loss which affects the financial
statement of business and also make the firm bankruptcy.

CONCLUSION
From the above information it is being concluded that through proper strategic management
planning company can gain the competitive advantage as it provides a direction to run the
business effectively and smoothly. The Organisation must understand and develop its core
competencies through which they can be different from its competitors and attract maximum
customers towards the products and services. It is necessary for companies to identify their
strength which they can use in competing with its competitors and succeed in marketplace. The
Firm must identify the suitable strategy which they must implement in order to increase their
growth and performance of business. There are there strategies which can help in gaining
competitive advantage they are cost leadership, differentiation and market segmentation. The
Company must also focus on implementing the new technology and develop new products and
services that must be unique and different from competitors so that they can work according to
the latest trends.

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