Section: 1

1.0 Introduction
Strategy is the opportunity and the direction of any firm for an extended
time period. It benefits the firm when there are changes in the
environment as it organizes the competencies and resources of the firm
by fulfilling the expectations of the stakeholders (Johnson, et al., 2009).
The strategic decisions are mainly about the following points:

Long term direction of an organization and hence can be complex in

nature.
Scope of an organization activities therefore can be made in

situations which are uncertain.

They may help to gain advantage over competitors but can most

likely affect operational decisions.

They can address changes in the business environment but they

require an integrated approach.

Values of stakeholders and can involve some changes. (Johnson, et
al., 2009)

Levels of Strategy:
Strategy can be divided into three different levels. The Corporate Level,
Business Level and Operational Strategies.
1. Corporate-level strategy: this level deals with the purpose and
scope of an organization and how value can be added to the
different parts of an organization. This includes issues such as
geographical coverage, range of products of the business and
resource allocation between the different parts of an organization. It
is also related to expectations of the owners- the shareholders and
the stock market (Johnson, et al., 2009).
2. Business-level strategy: this level deals with the different
businesses that are included in the corporate strategy should be
able to compete in their particular markets. It is sometimes also

knows as competitive strategy. It relates to particular strategic

business unit within the overall organization (Johnson, et al., 2009).
3. Operational Strategies: this is the third level of strategies which
are concerned with how the component parts of an organization are
able to deliver the corporate and business level strategies related to
resources, processes and people (Johnson, et al., 2009).

1.1 Importance of Strategy for the managers

According to (Rapp & Birger, 2005) strategic planning helps the manager
to improve the performance of an organization. When the managers follow
their strategy, they are able to increase their profits, sale and net return
on assets and this has been measured as well. Managers adopting
strategic process expect that it will lead the firm to much better financial
performance.
There are many non-financial benefits for the firm which has adopted a
strategic process. According to (Narayanan & Nanda, 2004) the main nonfinancial advantages of strategy is that it helps the manager to know and
plan about the future problems as well as enjoy the future opportunities. It
also helps them to make better and quick decisions which results in cost
saving.
There are different views of each author that why strategy might help the
managers to understand their firm and its environment in a better way.
The different models are Mintzberg 5Ps, Classical Approach, The Resource
Based view (RBV) and Jarzabkowskis 3ps but I have used Mintzbergs 5ps
and The resource based view as these two models are widely accepted
and are easy for the managers to adopt and understand that why strategy
is important for them and their firm.

1.2 Mintzbergs 5Ps

According to Mintzberg, it is very difficult to get to the right strategy. As
there is no single definition of strategy in Strategic management so
strategy has been defined in indirect ways (Campbell, et al., 2011).
Mintzberg developed the 5Ps of strategy which are plan, ploy, pattern,

position and perspective. With the help of the 5ps, the manager can
benefit a lot if they follow some strategy. The 5ps are discussed as
beneath:

Strategy as Plan: Strategy as a plan can be defined as an action

done with intention in order to deal with some situation (Mintzberg,
2000). In plan, strategy can be specific or general. The strategy is
planned before the occurrence of the situation for which it has been
formulated. Like Morrisons can plan to introduce a new product to
their store, so they will plan for its arrival, place where it will be
displayed and the selling price so all these actions will be done
before the product arrives so this is strategy as a plan.
If the managers follow strategy as a plan, they can be more relaxed

and give much better service to their firm.

Strategy as Ploy: Strategy as ploy can be defined as any trick to
outperform the competitor by either influencing, disturbing or
discouraging them so that they try to copy the firms strategy and
fail to succeed (Mintzberg, 2000). Strategy can be ploy and plan at
the very same time. Like Toyota can influence their competitors by
exclaiming to launch cheapest hybrid car which the competitors will
try to copy and strategy of Toyota will work out.
If the manager follow strategy as ploy, they can outwit their

competitors therefore strengthen their firms position.

Strategy as Pattern: It can be defined as the strategy that the
firm has been following for very long time or maybe they are
following but they dont follow it intentionally (Mintzberg, 2000). A
firm follows the same strategy only if it is working out for them or
the firm doesnt even recognize themselves. Like Maruti Suzuki India
are the market leader in small cars and when they opened first, they
were intentionally selling small cars which they still do as it has
been very successful for them.

If the manager follow strategy as pattern, they can keep on using it

till the time it is successful and gives them competitive advantage.

Strategy as Position: It can be defined as measuring the firms
performance in respect to its competitors. It basically considers the
external environment in which the firm is operating (Mintzberg,
2000). Like the manager of KFC should consider KFC and he should
also look at his competitors like McDonalds, Burger King etc.

Strategy as Perspective: It can be defined as strategy that might

be aggressive for one manager whereas the other manager see it as
protective. It depends upon the way the managers look to the
surrounding world (Mintzberg, 2000). Like one manager at British
Airways can take Lufthansa as their biggest threat whereas the
other manager might take it as their opportunity to exploit the
resources of Lufthansa and the third one can get into alliance with
them so it depends upon the thinking of the different managers.

1.3 Resource Based View (RBV)

This view focuses on the strengths and weakness of the firm and works on
a hypothesis that an organization can make above average profits and
enjoy competitive advantage if it possesses unique and specific potentials
either in the form of core competencies or in the form of resource
(Salonen, 2010). It is based on two assumptions which are that an
organization in an industry may be heterogeneous in reference to the
strategic

relevant

resources

controlled

by

them

and

the

second

assumption is that the factor markets are imperfect (Barney & Wright,
2001).
The main motive of this view is to inspect about the source of the
sustained competitive advantage of the firm and what are the conditions
based on the two assumptions of this view (Barney & Wright, 2001).

The resource based view uses the VRIN (Valuable, Rare, Inimitable, NonSubstitutable) model to explain whether a resource is strategically
relevant which is discussed beneath:
Valuable: A resource is regarded as valuable if it exploits opportunity and
neutralizes the threats present in the external environment of the firm
(Salonen, 2010). Like Tesco extra which is Tescos biggest store selling all
the products at one place (Bernard, 2015) is a valuable resource for them
as they are neutralizing their threats and this store attracts more
customers in comparison to their competitors Morrisons, Sainsbury etc.
Rare: A resource is regarded as rare if it is uncommon among the current
and potential competition of the firm (Salonen, 2010). Like Tesco extra is a
rear resource for Tesco because none of their current or potential
customers have all under one roof store and it creates sustained
advantage for them.
Inimitable: A resource is said to be inimitable if it is hard to copy or the
competitors are unable to perfectly duplicate it (Salonen, 2010). Tesco
extra is hard to duplicate as a large place is required to operate such store
with many employees and huge capital investment so it is inimitable.
Non-Substitutable: A resource is said to be non-substitutable when it
cannot be easily replaced with products or resource of its kind (Salonen,
2010). Like Tesco extras substitute is not easily available because of large
capital requirements.

1.4 Drawbacks of RBV

The main criticism for RBV is that it does not explain the fact that how a
resource can develop and change itself with time (Henry, 2008). Also the
role played by people in the firm is supposed to be self-evident hence it is
addressed rarely and it also lacks details and it is very hard for the firms
to implement it (Henry, 2008).

Conclusion
From the above discussion, we can say that both RBV and Mintzberg 5Ps
alone on their self can help the executives to develop and implement
strategy for the survival and growth of their firms because of their
drawbacks.
Mintzbergs 5ps are discussed in brief by Mintzberg which makes it very
tough to understand and implement and understand the extent of the
marketing environment. And on the other hand RBV is accepted only by
few people and it is very difficult to generalize it and other drawback is
that it can only be implemented to large firms.
A good manager will always keep in mind the advantages and drawbacks
of both the models and then understand that which model to implement in
their organization in time of crisis and opportunity.

Section: 2
2.1 Whittingtons School of Strategy
Whittington in his book (Whittington, 2000) of a strategy explains that
there are four approaches to strategy which are the classical approach,
evolutionary approach, processual approach and the systematic approach.
The four different approaches have four different meanings for strategy.
According to the module material, theories are very necessary because
they have assumptions about the key aspects of business life. The
drawback of theory is that people forget that they do exist. (Argyris, 1997)
says that the most dangerous thing is to leave the assumptions hidden.

Theories also explain individual that what they should do first, what they
should be looking for and what their expectations should be from their
course of action. Each approach is discussed below:

2.2 The Classical Approach

When the firm opts for classical approach, it aims at profit maximization
and in order to achieve it, the firm does rational planning (Whittington,
2000). Alfred Chandler, Igor Ansoff and Alfred Sloan established the main
features of this approach which are the attachment to rational analysis,
separation

of

execution

from

conception

and

profit

maximization

commitment (Chandler, 2003).

From the article, the example of General Motor, it can be noted that the
basic strategic problem is to position the firm in those markets in which
there is a probability of maximum profit. According to Alfred Sloan, a
business adopting classic approach aims to earn return on capital and if
the return, in the long run, is not up to the mark, the reason behind it
should be corrected or the activity should be stopped.
The main drawback of this approach is that uncertain activities occurring
in the external environment leads to the failure of this approach
(Whittington, 2000).
The classical approach mainly influences economist and the militarists.

2.3 The Evolutionary Approach