Emergent Strategy Defined

Emergent strategies are characterized by patterns of actions within a business that occur
without a clear relationship to, or even in spite of, the stated goals or mission of the business.
The pattern typically becomes apparent only after the fact, but businesses often adopt the
change as the new business strategy. A simple example of this might be a comic book shop
owner setting a strategy for dominating comic book sales in given city. The manager,
however, notes that profits from tabletop gaming products far exceed that of the comics and
shifts resources to beef up gaming inventory. Profits rise and owner recasts the strategy to
become the dominant gaming shop in a given city.

Advantage
In most cases, emergent strategies arise from individuals in an organization responding
directly to market forces. Their decisions reflect shifts in consumer tastes, order sizes and
practices of competitor businesses. In essence, the advantage of emergent strategy is that it
leads a business to provide what the market actually wants, rather than what the owner or
executive thinks or believes the market wants. Effective emergent strategy does require that
the organization maintain the flexibility, particularly at the owner or executive level, to
embrace the new strategy.

Disadvantage
By nature, emergent strategy occurs as part of ongoing organizational activity. While a
business could forgo a deliberate strategy and rely on an emergent strategy to develop, the
odds of such order manifesting from pure, unstructured business activities remains slim. As
such, emergent strategy does not offer a genuine alternative to more traditional deliberate
strategy, especially for new businesses operating on narrow margins. At best, it serves to
complement and serve as a corrective measure for deliberative strategy.

Considerations
The increasing pace of change in the business landscape, driven by the rapid cycling of
consumer interests and technical innovation, suggest that tolerance for emergent strategy may
need to become inherent for all businesses. Business owners and executives do need to
remain cautious about reading emergent strategy into patterns of behavior. Shifts in the
strategic position of the business due to mid-level decisions may come about as the result of
poor or uninformed decision-making at that level.

The prescriptive approach regards strategy development as a systematised and

deterministic process where analysis of the organisation, its performance and
external environment leads to the formation of a rational, long-term plan. Senior
management is in charge of defining the final objectives and the plan is then put
into action through the successive layers of the organisation.

Techniques which feed this process include Porter's heavily structured Five
Forces model for analysing industry and Value Chain Analysis which highlights
existing capabilities as a solid basis for competitive advantage.
It is pointed out by Ansoff that firms in fast-paced, competitive environments who
use a systematic process for strategic planning very often go on to dominate their
marketplace. Their logical, analytical approach allows them to devise predictive
and pre-emptive strategies from which they can meet new opportunities head on.
For instance, in 1995 EasyJet used incredible foresight to introduce low cost
flights allowing it to take advantage of a more cost-conscious European Market.
What's more, this approach makes it possible to organise complex activities and
exercise a greater degree of control over different business units. For example,
Tesco's planning process resulted in well defined long-term goals and clear
boundaries for its UK core business, retail service, non-food and international
sectors. It has succeeded in achieving consistent growth and profit in all of these
areas over recent years.
Strategy formation which places a lot of weight on existing capability strengths is
thought to be a secure basis on which a firm should define itself and optimise its
position, particularly in times of rapid and turbulent change. For example,
Motorola has successfully met the needs of emerging markets by using its
fundamental technological strengths in electronic components to progress from
supplying TVs and car radios to offering telecommunications services.
From a contrary perspective, Johnson states that the prescriptive model
contains many assumptions that are unsustainable in today's business world. The
logical approach implies that strategy development is always deliberate and that
strategies are realised according to plan.
However, empirical research by Mintzberg discounts this, highlighting that
realised strategy tends to be only 10 to 30 percent of the intended strategy. This
is mainly because unpredictable events, such as the introduction of new
regulations or technologies, will regularly act to force the original strategy off its
course.
Additionally, the prescriptive approach to planning falls short in allowing for any
learned elements to be absorbed into the strategy and so can limit an
organisations ability to respond flexibly in today's rapidly changing environment.
The narrow-minded manner in which it focuses on established areas of business
and capabilities can hinder serious transformational change where reinvention is
required.
A further criticism is that the prescriptive model fails to complement modern
organisational cultures where employees at lower levels are included in the
decision making process. This type of involvement is frequently found in small or
medium sized businesses. As a result, organisational creativity can be stifled and
employee dissonance may occur as it is at these levels that work processes are
most fully understood.

The Emergent Approach

Mintzberg put the idea forward that strategies can be unplanned, developing
incrementally over time as a businesses actions adapt to a changing reality.
Instead of meeting a premeditated plan, he argued that strategy evolves through
a process of learning, adjustment and experimentation.
Formulation of strategy runs parallel to implementation and managers at multiple
organisational levels have a key input into the actual strategies pursued by the
organisation. This model's emphasis on learning underlies more recent theories
which focus on the value of knowledge as a core organisational competence for
gaining competitive advantage.
An emergent approach leads to more creative and responsive strategy making
which is well suited to the hyper-competitive and unpredictable environments of
today. Interestingly, Hamel and Prahalad pointed out that the most successful
firms in the world such as Microsoft and Apple Macintosh do not tie themselves
down to mission, goals and objectives or the predetermined plan.
In contrast with the prescriptive approach which focuses on creating a fit between
established strengths and emerging opportunities, the emergent approach
challenges the status quo by intentionally creating a misfit between these factors.
Hence, it is more suited to instigating positive, transformational organisational
change such as diversification or restructuring. It also has the added benefit of
helping to reduce resistance to change as it allows time to build employee
support while the strategy is taking shape.
On a negative note, when formulation and implementation occur simultaneously
there is a risk that strategy development becomes too slow and jumbled a
process. This means that valuable opportunities may be missed along the way.
Also, conflicting objectives from different groups can hinder strategy
development, particularly when there are power shifts taking place during a major
strategic change such as a merger.
Without strict analysis and identifiable targets, objectives can lack clarity and
there may be no real basis for evaluating performance. Indeed, it was pointed out
by Brews and Hunt that an over-reliance on emergent strategy formation could
result in underperformance.

Conclusion
Within the framework of an environment which is by and large unpredictable,
many organisations are forced to become more flexible and adaptive to change.
This supports the adoption of an emergent approach to strategy development
which invokes a more intelligent capacity to respond to new opportunities.
Nonetheless, such a strategy can preclude control over actions and may risk a
lack of direction. A greater use of strategic planning tools for internal and external
analysis would certainly facilitate improved organisational learning and enhance
strategic thinking even while following an emergent approach.

This recognition that the prescriptive and emergent processes, rather than being
mutually exclusive, can be complementary approaches that reinforce each other
is being highlighted in more recent theories such as the Logical Incrementalism
approach proposed by Quinn. All in all, most viable strategies in today's business
world should have customised elements of prescriptive and emergent
characteristics in order to manage the complexities of their business and still
triumph over changing circumstances

what are First Movers?

You've probably heard of the old adage, 'The early bird gets the worm.' But what does that have
to do with marketing strategies in today's highly competitive markets?
A company that is the first to establish itself in a given market or industry, the proverbial 'early
bird,' is known as the first mover. First movers hope to gain a sustainable competitive advantage
by establishing themselves before any competitors enter the market.

Advantages
There are some advantages to being a first mover. Here are some of them:

First movers have the potential to make a lasting impression on customers, which can
lead to brand recognition and brand loyalty.

First movers have more time to refine their processes and to perfect their products or
services.

First movers may have an advantage in controlling resources, such as a strategic location
or an exclusive contract with key suppliers or talented employees.

First movers may have a sustainable advantage when there is a high cost involved for
customers to switch brands at a later date.

Disadvantages
There are also some disadvantages to being a first mover, such as:

First movers bear the economic burden of developing a new market that followers into the
market can exploit.

Followers into the market can learn from the mistakes of the first movers, allowing them
to reduce their risk and avoid making costly mistakes.

Followers may be able to examine the processes of the first movers and modify them for
greater efficiency and cost reduction.

Followers can utilize newer technologies that become available, while first movers may
be heavily invested in older technologies.

First movers sometimes rigidly adhere to their original path, even when it isn't working,
which opens the door for followers to move in with a revised version of the product that
better serves the market's needs.

First movers may be driven by a fear of missed opportunities, leading them to launch a
new product or service before the market is ready

Real-World Examples
So what will be your marketing strategy? Will you lead the way as a first mover, or will you wait
until the ground work has been laid and then jump into the market?
Let's take a look at some well-known companies that used the first mover marketing strategy to
achieve a sustainable competitive advantage.
A prime example of a successful first mover is Coca-Cola, or Coke. Coke was invented in 1896
by John S. Pemberton. When Caleb Bradham invented Pepsi-Cola thirteen years later, Coke was
already selling a million gallons per year. For over a hundred years, Pepsi has been trying to play
catch-up in the cola beverage market, but first mover Coca-Cola continues to dominate the
market. In 2014, the Coca-Cola brand was valued at $79 billion dollars . . . a very juicy worm,
indeed!
Other examples of successful first movers include:

eBay -- the first online auction service

The Importance of Understanding Strategic Drift

So what is strategic drift? In simple term the failure to respond to
companys external environment i.e. the competition, consumers wants
and needs etc.
Over the years we have seen many companies failing due to strategic
drift, MySpace is a prime example, from being the pioneer in social
networking on the web to its demise due to competition from
Facebook. The reason MySpace failed was its failure to respond to the
changes in its external environment. It failed to innovate and offer better
service than Facebook i.e. failed to respond to consumers wants and
needs. The company lost focus, the leadership and the vision it once had.
Indeed, this is one of the problems of becoming too big, which means you

will have more red tape to deal with to get innovation through the front
door. How a company deal with this predicament defines the company in
long term.
How do you tackle strategic drift? Well a company can be proactive i.e. be
the market leader through innovation and understanding customers wants
and needs, a good example would be Apple who defined the tablet
market, but it was Microsoft who pioneered in this space for long time. I
still remember using the Windows XP tablet made by HP (TC1100) in my
science class in 2004; it was a device ahead of its time.
There are many barriers to change like companys culture, employees and
management. To solve these issues the company must have a strong
leadership. A person whos characteristic not only needs to include
management skill but entrepreneurial and visionary skills as well.
Nokia was one of the giants of mobile phone industry, indeed still is, but
for how long. Its failure to respond to the changing environment meant it
lost/losing Smartphone marketshare and revenue to emerging and old
rivals (Google, Apple, Motorola etc). The appointment of new CEO was a
good strategic move, but hiring an ex Microsoft employee who is the
7thbiggest shareholder in Microsoft undoubtedly will have conflict of
interest. Indeed, this was proven when Stephen Elop selected Microsoft
Windows Phone platform over its own OS and Android platform which was
more mature and had more momentum, was this a poor judgment? I dont
think so. Nokias future remains uncertain. I doubt Nokia will be able to
recover the lost marketshare in the smartphone market, which is one of
the key segment in mobile phone market. The question remains will
Microsoft buy Nokia? Maybe, maybe not, however there will be one loser
from this and that will be Nokia.
Thus it is critical to look at the external environment of the company and
react to the changing environment or be proactive and innovate, which
enables the company to set the marketplace agenda (Apple iPad)

Mintzberg's 5 Ps for Strategy

The word "strategy" has been used implicitly in different ways even if it has traditionally
been defined in only one. Explicit recognition of multiple definitions can help people to
manoeuvre through this difficult field. Mintzberg provides five definitions of strategy:

Plan

Ploy

Pattern

Position

Perspective.

Plan
Strategy is a plan - some sort of consciously intended course of action, a guideline (or set of
guidelines) to deal with a situation. By this definition strategies have two essential
characteristics: they are made in advance of the actions to which they apply, and they are
developed consciously and purposefully.

Ploy
As plan, a strategy can be a ploy too, really just a specific manoeuvre intended to outwit an
opponent or competitor.

Pattern
If strategies can be intended (whether as general plans or specific ploys), they can also be
realised. In other words, defining strategy as plan is not sufficient; we also need a definition
that encompasses the resulting behaviour: Strategy is a pattern - specifically, a pattern in a
stream of actions. Strategy is consistency in behaviour, whether or not intended. The
definitions of strategy as plan and pattern can be quite independent of one another: plans may
go unrealised, while patterns may appear without preconception.

Plans are intended strategy, whereas patterns are realised strategy; from this we can
distinguish deliberate strategies, where intentions that existed previously were realised, and
emergent strategies where patterns developed in the absence of intentions, or despite them.

Position
Strategy is a position - specifically a means of locating an organisation in an "environment".
By this definition strategy becomes the mediating force, or "match", between organisation
and environment, that is, between the internal and the external context.

Perspective
Strategy is a perspective - its content consisting not just of a chosen position, but of an
ingrained way of perceiving the world. Strategy in this respect is to the organisation what
personality is to the individual. What is of key importance is that strategy is a perspective
shared by members of an organisation, through their intentions and / or by their actions. In
effect, when we talk of strategy in this context, we are entering the realm of the collective
mind - individuals united by common thinking and / or behaviour.

Porter's Value Chain

The idea of the value chain is based on the process view of organisations, the idea of seeing a
manufacturing (or service) organisation as a system, made up of subsystems each with inputs,
transformation processes and outputs. Inputs, transformation processes, and outputs involve
the acquisition and consumption of resources - money, labour, materials, equipment,
buildings, land, administration and management. How value chain activities are carried out
determines costs and affects profits.

Most organisations engage in hundreds, even thousands, of activities in the process of

converting inputs to outputs. These activities can be classified generally as either primary or
support activities that all businesses must undertake in some form.
According to Porter (1985), the primary activities are:
1. Inbound Logistics - involve relationships with suppliers and include all the activities
required to receive, store, and disseminate inputs.
2. Operations - are all the activities required to transform inputs into outputs (products
and services).
3. Outbound Logistics - include all the activities required to collect, store, and
distribute the output.

4. Marketing and Sales - activities inform buyers about products and services, induce
buyers to purchase them, and facilitate their purchase.
5. Service - includes all the activities required to keep the product or service working
effectively for the buyer after it is sold and delivered.
Secondary activities are:
1. Procurement - is the acquisition of inputs, or resources, for the firm.
2. Human Resource management - consists of all activities involved in recruiting,
hiring, training, developing, compensating and (if necessary) dismissing or laying off
personnel.
3. Technological Development - pertains to the equipment, hardware, software,
procedures and technical knowledge brought to bear in the firm's transformation of
inputs into outputs.
4. Infrastructure - serves the company's needs and ties its various parts together, it
consists of functions or departments such as accounting, legal, finance, planning,
public affairs, government relations, quality assurance and general management.