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model of strategy making that seeks to attain a match, or fit, between internal capabilities and external possibilities. "Economic strategy will be seen as the match between qualifications and opportunity that positions a
Business School
Business Policy: Text and Cases in 1965 by
internal situations,
the former uncovering threats and
opportunities in the environment, the latter revealing strengths and weaknesses of the organization.
preferences of those who formally lead the organization Social Responsibilities--specifically the ethics of the society in which the organization functions, at least as these are perceived by its managers.
best one
inconsistent goals and policies. Consonance: The strategy must represent an adaptive response to the external environment and to the critical changes occurring within it. Advantage: The strategy must provide for the creation and/or maintenance of a competitive advantage in the selected area of activity. Feasibility: The strategy must neither overtax available resources nor create unsolvable sub problems.
Example
Consulting firm Kepner-
Tregoe's law of parsimony, was an almost direct quote from Andrews's early work: ". . . Keep strategies clear, simple, and specific"
product demand or design Population trendsImpacting distribution, product demand or design 2. Governmental Changes New legislationImpacting product costs New enforcement prioritiesImpacting investments, products, demand 3. Economic Changes Interest ratesImpacting expansion, debt costs Exchange RatesImpacting domestic and overseas demand, profits Real personal income changesImpacting demand
4. Competitive Changes Adoption of new technologiesImpacting cost position, product quality New CompetitorsImpacting prices, market share, contribution margin Price changesimpacting market share, contribution margin New ProductsImpacting demand, advertising expenditures 5. Supplier Changes
Changes in input costsImpacting prices, demand,
contribution margin Supply ChangesImpacting production processes, investment requirements Changes in number of suppliersImpacting costs, availability
Marketing
Operations
Finance
Control of raw Product quality Financial leverage Number of product materials Operating leverage Production capacity Balance sheet lines Production cost Product ratios structure differentiation Stockholder Facilities and Market share relations equipment Pricing policies Tax situation Inventory control Distribution channels Quality control Energy efficiency Promotional programs Customer service Human Resources morale Employee Marketing research Employee Advertising Employee capabilities development Sales force Personnel systems Employee turnover
consciousness must rest with the chief executive officer: that person is the strategist
the president as architect of organizational
purpose
entrepreneurial school on one side and the planning and especially positioning schools on the other.
individual case.
Design School concentrates less on the contents of
blown, explicit, and simple strategies are fully formulated can they then be
niche can narrow its own perspective. Model deny certain important aspects of strategy formation including
Incremental development Emergent strategy The influence of existing structure on strategy Full participation of actors other than the chief
executive
Addressing Criticism:
ASSESSMENT
AND
STRATEGY INFLEXIBILITY
EXPLICIT:
PROMOTING
SEPARATION
Marketing MYOPIA
define themselves in terms of broad industry orientationunderlying generic need. Words on paper do not transform a company. Levitt's intention was to broaden the vision of managers.
Marketing hyperopia where "vision is
formulation and implementation lies a set of very ambitious assumptions: that environments can always be understood. In an unstable or complex environment, this distinction has to be collapsed, in one of two ways.
Either the "formulator" has to be the
Four conditions encourage an organization to tilt toward the design school model:
the information relevant for strategy formation 2. That brain is able to have full, detailed, intimate knowledge of the situation in question.
established before a new intended strategy has to be implementedin other words, the situation has to remain relatively stable or at least
Concluding:
Strategy is a grand design that requires a
grand designer. There is a process of designing that leads to outputs called designs. The design school has focused on the process, not the product.
Over simplified and restricted in