Strategic Management Approaches: Analysis with Examples and Approaches

This report provides a comprehensive overview of strategic management, focusing on various approaches that organizations can adopt to achieve their objectives and maintain a competitive edge. It begins with an executive summary and an introduction that highlights the importance of strategic management in today's global business environment. The report then delves into specific approaches, including the stakeholder approach, dynamic capabilities approach, and sustainability approach, providing detailed explanations and real-world examples. The stakeholder approach emphasizes the importance of considering the interests of all stakeholders, including customers, suppliers, and the community. The dynamic capabilities approach focuses on an organization's ability to adapt and utilize its resources effectively, while the sustainability approach stresses the responsible use of resources and environmental considerations. The report concludes by comparing the advantages and disadvantages of each approach, offering recommendations, and providing a list of references.

Running Head: Strategic Management
Strategic Management

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Contents
Executive summary.....................................................................................................................................1
Introduction.................................................................................................................................................2
Strategic Approaches with example............................................................................................................2
Stakeholder Approach.................................................................................................................................2
Stakeholder Approach example..................................................................................................................3
Dynamic Capabilities Approach...................................................................................................................4
Dynamic Capabilities example.....................................................................................................................5
Sustainability Approach...............................................................................................................................5
Sustainability Approach example................................................................................................................6
Advantages and disadvantages of different approaches.............................................................................6
Conclusion...................................................................................................................................................7
Recommendation........................................................................................................................................7
References...................................................................................................................................................8

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Executive summary
Strategic management alludes to the method of the association of management of a firm to
execute exercises such that they increase hierarchical target alongside stakeholder benefits. The
standard linear approach of Strategic management refers to the arranging held in an association.
The association might make vision and statement of purpose and adjust their business exercises
with the goal that objective is accomplished. Aside from the linear approach, there are numerous
different methodologies which help the vital administration exercises in an association like,
stakeholder approach, dynamic capabilities, sustainability approach and so forth. These
methodologies tell the route in which an association might perform to keep up the enthusiasm of
stakeholders. Alongside benefits, there are a couple of downsides of these methodologies too.
Many organizations proficiently utilize these ways to deal with recognize their connected people
and start exercises for them. Further, the investigation of these methodologies is talked about
beneath.

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Introduction
The fact is known to all that companies in the global world who wants to achieve success and
gain the competitive edge need to initiate strategic management. Strategic management refers to
activities held in an organization which initiates their growth and fulfills the objective of the
organization. It is basically the formulation of different plans in an organization so that to
provide profit to the organization. But it shall also be noted that in an organization the strategic
management activities shall be held in such a way that it assists the stakeholder's interest or
increase it (Kramar 2014). The organization shall always look after their interest and aim to
provide the maximum benefits. Further, the linear model in strategic management refers to the
planning process developed by the company so as to assist the working of organization gain
benefit out of the business activities.
The linear model helps the organization to implement strategies by planning process; they plan
activities which shall be done in a way that it provides an advantage to the company along with
the stakeholder. But in strategic management, the linear approach many times fails to fulfill the
requirements of the organization and its members. So to resolve that issue there are many other
approaches defined to assist the working of the organization in the global market (Armstrong,
and Taylor 2014). The company shall always to look after all the approaches and then select the
approach which adequately fits the management of the organization. The report further provides
a detailed view of some approaches to strategic management and how they are utilized by
different business process. Additionally, the benefits and drawbacks of implementation of these
processes are discussed in the report.

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Strategic Approaches with example
As discussed above, strategic management is the process in which the management activities are
conducted in a business. The efficiency of a business in the market depends upon the efficiency
of its internal management system only. Thus, the companies shall adopt definite management
approach which positively affects the organization (Stark 2015). Some of these approaches are
discussed below:
Stakeholder Approach
Stakeholders are the people who are affected by the activities of a business process. It is not
mandatory that a stakeholder needs to be connected with the business in financial terms only; a
person who is connected with the non-financial activities of the business is also regarded as the
stakeholder of the company. Some of the stakeholders of an organization are suppliers,
consumers, customers, community, government etc. (Galliers, and Leidner 2014). The
stakeholder approach states that the managers of an organization shall implement and formulate
actions and plans which shall satisfy the expectations of the customers; it also states that in order
to gain long-term success it is mandatory for the company to fulfill the requirements of the
customers. As per the amount of participation of different groups in the activities of organization,
company can also make profit in the imperfect market. This process actively emphasizes the
business environment, relationships, and promotions of shared interest (Hill, Jones, and Schilling
2014).
The dominant part of the stakeholder approach is that the business entity needs to focus on the
satisfaction of shareholder more than profit rising. The management process under this approach
shall be designed in such a way that it benefits the interest of shareholders. It can initiate

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reinforce values in the management process and initiate creation of competitive edge. The
approach is planned and executed in the management while considering various factors which
are defined according to the interest of stakeholders (Wheelen, and Hunger 2017). With this
effect, it can be seen that there is an interdependent relationship between organization's
managerial activities and the objective of stakeholders. The stakeholder approaches also develop
and increases the powers of stakeholder to rule the management of the organization. Hence, the
process ultimately results in generation of more profits to satisfy the requirements of the
stakeholder in a better way.
Further, the stakeholder theory is better understood with the business management if they take
care of the interest of the stakeholders. The process through which the interest of stakeholder can
be managed is by communicating the recent business changes or other information with them.
Consult with them regarding some problems occurring in the business environment (Al Ariss,
Cascio, and Paauwe 2014). Apart from this, the company shall adapt to manage the stakeholder
risk, also the stakeholders of the organization can also be regarded as the risk as they have the
authority to make changes in the organization and these change may affect the business activity
in a positive or negative way. Along with this they also come with an opportunity, thus the
management shall make sure that they minimize the risk and optimally make use of the
opportunity provided by stakeholders of an organization (Mok, Shen, and Yang 2015).
Stakeholder Approach example
Looking at one of the companies who uses the stakeholder approach and earns optimum return
for the organization is the coca cola company. The company competently uses the stakeholder
approach and implements the business sustainability in their organizational culture. The

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company efficiently aims to initiate various business management processes keeping in mind the
interest of their stakeholders. The main purpose of initiation of these processes is to provide
maximum benefits to members and drive maximum satisfaction for them. This will initiate
proper growth of the organization. As discussed earlier the company believes that if they
maximize satisfaction level of customers and stakeholders then profit is automatically
maximized (Berrone, Cruz, and Gómez-Mejía 2014).
Dynamic Capabilities Approach
Dynamic capabilities refer to the abilities of an organization to perform better with efficient use
of their available resources. According to this approach, the company shall plan and implement
strategies in such a way that they obtain maximum use of the resources available to them and
drive incentives for the organization. In this way, adequate growth for the organization is
achieved.
In accordance with this approach, the company shall involve in activities which excessively use
the natural resources, instead the management of the organization shall ensure that adequate use
of resources is made; as with maximum utilization the environment will get affected adversely
and natural resources will get depleted. This concept helps the organization to know about their
capabilities on the basis of which they can work and put their effort in the management (De
Brucker, Macharis, and Verbeke 2013). The resources of an organization include natural and
well as artificial resources. Human resource is the most important asset of an organization which
helps them to gain competence in the market. Use of dynamic capabilities approach will help an
organization to develop an understanding of their abilities and resources which they are under or
over utilizing. Thus, this process will help an organization to optimally use the resources present

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with them and achieve success. The dynamic capabilities approach includes their abilities,
involvement of which will help the organization to achieve their targets in the target market.
These are:
 The ability of the employees of the organization to learn and adopt changes in the
fluctuating external environments.
 Adoption and involvement of new assets in the organization's working.
 And the process of adoption of methods to transform the used or waste resources in such
a way that benefit is achieved (Doh, and Quigley 2014).
Further, some of the stages of the dynamic capabilities approach are discussed below:
Learning: learning is the initial and the basic phase of this approach. It involves that the human
resources of the organization shall initiate to change their current routine and schedule in such a
way that it assists the organization in achieving the objective. The management shall ensure that
adequate activities in the business process are carried out that ensure proper communication and
learning in organization. If the communication process of the organization is efficient, then it can
act as an advantage for the organization as with this the employees can learn and adapt new
changes easily (Verbeke, and Tung, 2013).
New assets: it refers to the techniques and the degree of understanding that the management
shall have to adopt new assets in the organization. They shall be efficient enough to manage the
use of new and innovative technology.
Transformation of available resources: all organizations have resources which are used less or
are wasted in its use. Thus, the dynamic approach of strategic management states that the

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organization ensures that such resources are adequately used and managed in the business
process (Harrison, Freeman and de Abreu 2015).
Co specialization: regular use of single type of technology or resources helps the organization to
gain excellence in that work. Thus, due to the process of dynamic capabilities and organization
becomes efficient to initiate a single type of work and gain success. This process is called co
specialization, which is by making use of resources becoming efficient and gaining advantage for
business.
Dynamic Capabilities example
Apple is the company which utilizes the dynamic capabilities approach in their management
process and initiates efficiency and competence in the local market. The company is not a
technological innovator but it is a good marketer. The company efficient analyzed their resources
and things they are good at, after that, they utilized their resources and efficiency in a direction
so that the organization objective is achieved. They adequately placed their product in the target
market and efficiently promoted the product which gained everybody's attention and sale was
initiated. Thus in this was the company utilized the dynamic capabilities approach to become a
leader in the electronics industry (Villar, Alegre, and Pla-Barber 2014).
Sustainability Approach
Sustainability refers to the process of using things in such a way that they are utilized adequately
and saved for the future generation as well. Sustainable approach refers to the approach of
business management that helps an organization to use the available resources and technology
efficiently in such a way that they are used properly. If the process of sustainable develops in

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occurred in an organization then it can be said that the organization can easily live with the
available resources for an adequate period of time and they do not need to spend more to
optimize resources. All organization in the current era shall understand the need of resources and
utilize them wisely so that they are left for the future generation as well (Helfat, and Peteraf
2015).
The sustainable approach also states that the activities of a business shall not negatively affect
the environment and society in which they are prevailing. All organizations shall aim to fulfill
their corporate social responsibilities. Some of the activities which the business shall use are, use
less electricity and water, emit less carbon and initiate to plant more and more trees. In this way,
cleaner environment will sustain (Di Stefano, Peteraf, and Verona 2014). The managers of the
organization shall understand the need of the sustainable development in business context and
execute those activities only which positively affect the business growth. The organization which
emits more carbon particles in the environment shall take initiative to somehow survive in
cleaner environment. Thus, the sustainable management refers to the process of doing business
in the market in such a way that it does not hamper the growth of the business and instead assists
the society in fulfilling their social responsibility (Schilke 2014). Industrial functioning shall be
changed and new rules shall be applied in the organization which improves its growth. The
manager of an organization who is concerned with the different activities happening in the
organization, they shall ensure that the employee working under the organization and executing
activities in such a way that they are not disturbing the nature and also they are complying to the
organization's mission and vision statement as well (Carmenado, et. al., 2016).

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Sustainability Approach example
It shall be noted that the company famous for providing pure coffee beans uses the sustainability
approach in their business context to help the nature and earn good profit from it as well. The
company came into alliance with the supplier and communities present in the external
environment to provide premium quality coffee beans in the market (Youngran, et. al., 2017).
Looking at this proposal in the market the stakeholders initiated to invest in the plan of the
organization. Thus, due to which the company earned profit and in return they provide organic
quality products in the market as well. Keeping the interest of stakeholders aligned with the
activities of the organization the company Starbucks initiated this activity so that a win-win
situation for both company and stakeholder is created. Thus in this way, the stakeholders
approach is used in organizations.
Advantages and disadvantages of different approaches
1. The advantage to stakeholder approach is that the organization provides an opportunity to
the stakeholders of the organization to use their powers and speak for their rights. It gives
them the power to utilize the rights and initiate activities which are best for the business
process. Whereas disadvantage of this activity is that, more power given to the
stakeholders of the organization can result in hindrance in the managerial activities of the
organization. The stakeholder can interrupt in the activities proceeded by the board in the
organization. More autonomy to stakeholders can act as a risk for the organization
(Neubert, and Dyck 2016).
2. The advantage to dynamic capabilities approach is that it helps the organization to
understand the essence of resources available, and it also initiates the proper use of

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resources so that they are left for the future generation. Whereas drawback of this
approach is that if an organization is unable to understand this concept then they might
overuse the resources which can create a bad impact on the environment and society.
3. The sustainable approach helps an organization to work efficiently so that their growth is
sustained in the market. Whereas disadvantage of this approach is that it distracts the
organization from doing its core business activities which are harmful to the growth of
the organization in the market (Armstrong, and Taylor 2014).
Conclusion
Thus, concluding the above statements the fact that shall be noted is that the strategic
management activities are necessary for an organization to work efficiently in the growing
competitive market. Also, the linear standard approach applied in the organizations much time
fits in the process, but there are some drawbacks to that approach as well. Thus, other approaches
like stakeholder, dynamic capabilities, and sustainability approach help an organization to run
peacefully and gain profit. Further, in the report, the activities of companies which use these
approaches were also noticed. Thus, these sufficiently fulfill the requirement of an organization
and its stakeholders as well. The analysis says that the business shall work to maximize the
satisfaction of stakeholder considering the corporate social responsibility but many times the
approaches lack behind as well. Thus, the management strategies shall be used wisely to provide
benefits to the organization and nature on harm.