“ The strategic management process is the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above average returns” (hanson and dowling ,2005,p7). The strategic management is a process to know about the firm's strategic competition and earn above the invested amount, through this we will know get to know about the competition in the market and the world -wide competition is consequential in the management process. Certain condition in the organisation should be followed to gain the strategic input and the output, it is necessary to understand the external and internal conditions to provide the organisation information about developing the strategic planning and purpose.
Mintzberg defines strategy in five different ways they are plan, ploy, pattern, position and perspective. And there are some reciprocal relationships between these 5 Ps.
Plan: A plan is how to react in a situation. Strategy is a set of instructions which guides us to handle a circumstance which is nothing but a plan. A strategy is build for some specific reason and is built in prior before the activity is undergone.
A ploy is a strategy made to outstrip and to gain advantage over other competitors in the market.
Mintzberg third definition regarding strategy is the pattern used in the continuous activity. All patterns may not go as per the plan, some may end up illogical.
The next definition of strategy is the position which means placing the organisation in the market which forms a bridge between the organisation and the outside world. Position can be revealed with the help of the plan or from the pattern. Management theorists place the organisation among all the competitors in the market and also strategy helps to develop friendly relationship among organisation even among the competitors.
Providing an insight of what is happening in the organisation. different organisations use different strategy some use new technology and some of the other companies use other technology, the strategy is defined as a concept which includes culture, ideology and world view.
MINTZBERG'S TEN SCHOOLS OF STRATEGIC THOUGHT
Strategy is a concept oriented process which is formed before structure and it is carried out after it is formulated. CEO designs a strategy for the organisation.
Strategy is a formal process, which includes into steps, checklist, and techniques. Here CEO just monitors the strategy, but planners create a strategy here.
It is more than a plan, strategy is an analytical process which involves calculation to analyze their position in the market.
Strategy involving supremacy in the organisation which involves both micro and macro level.
It is about the vision of a leader which creates direction in the organisation. CEO controls the strategy which is elastic in nature.
Strategy built for organisational competitors in the external environment. Strategy are built according to the external environment so they don't have any particular strategy.
Strategy are learned from the experience which has both successes and failures through which the organisation learns and adapts.
Strategy built to know what is in the minds of the people and also to know how the strategies get structured.
This strategy projects the organisational culture which is working cooperatively as a group to achieve the goal.
Strategy that is used to change from decision to another according to the situation, theory of all schools are used when needed.
Porter has some analytical techniques and concepts for achieving a good strategy, according to porter every organisation should have a sharply defined strategy. The aim of the strategy is to set a goal and analyze the internal and external factors of the business environment i.e the strength and the weakness. The tools of strategy are industry analysis and competitor dynamics called five force model. The five force are rivalry , buyers, suppliers, substitutes, potential entrants.
Rivalry (existing firms):
The existing firms provide different products to the customers and provide better services. A firm may increase or decrease the prices of a product to gain an edge over the existing firms and also by improving the features of the product and innovate some new ideas for the existing products. The rivalry has greater impact on profit these rivalry are measured by concentration ratio. High value of concentration ratio indicates high market share while low value indicates many rivalry in the industry.
Substitutes as threat:
The product of a company when placed in a market faces many competition from the products of other industries which are called as substitutes. These substitutes make the product prize vary due to the decrease in demand of the market.the alternative product also decreases the market share of an industry.
When there are more suppliers in the market and limited number of buyers in the market Buyers have control over the the producing industries because buyers set the prize for an product there are only limited buyer but there are many suppliers.
A manufacturing industry is requires many labours raw materials and other products. These needs make a connection between buyer and supplier. If there are more buyers and restricted suppliers the suppliers can set a high price for the buyers restricting the industry profit.
If the entry barriers and exit barriers are less then more number of new entrants will be there which may result in decrease in profit. If the entry level is high then there will be less number of entrants the profit will not be low.
Sun tzu's compared the military strategy that is the art of war to that of business strategy which falls under 13 categories
According to sun tzu's a proper planning is needed by keeping in mind the strength and weakness of an organisation with a correct information.
Before starting an firm we should have an good knowledge about the expenses of the organisation. A clear picture about the structure of organisation should be known and the decisions taken by the organisation should be clear and quick.
Smart thinking is important in every step to succeed than aggressive approach. Deploying of Organisation power should be done which increases the responsibility .
Prior planning should be done before stepping into the market and alternative solution should be there to adapt to the business changes.
Search for opportunity and utilize the explored opportunity. according to the nature of a job fit a right person to it.
Invent new ideas to create uniqueness in the market and learn the weakness of the competitors and built your strengths on it. Analyze the market value and participate on the right times.
Insufficient planning will lead to loss in business and in market value set a goal for a concern and motivate people by proper communication to achieve vision.
Analyze various factors in the firm to find the weakness in it before entering into the market.
Analyze the market conditions and get rid of it during unstable conditions and enter it when it is stable.
A qualified manager directs his people with proper resources to achieve the goal and treat the organisation as a family. Decision are made according to the market situations and learn about our weakness to get rid of it.
Create a peaceful environment to work so that they work in a group together.the people will contribute more to the concern if it is successful. The company development depends on management and control of management over the employees.
Build new ideas with the help of past experience a small error can create a big problem in an organisation
Have talented people in the company and reward them. Always have different ways of gathering information about the market this will help in taking good decisions.
Porter theory belongs to positioning school and he mainly concentrates on external surroundings and developing real and innovative new resources in reaction to rapid changing market circumstances, porter theory is lagging in the concentration of internal environment of the organisation. Mintzberg provide consistency and he uses a block of blinders to avoid possible danger in firm but mintzberg lags in creativity and also he didn't focus on the vision. Sun tzu belongs to positioning school here the strategy can be reduced to generic position accordingly to the selected fixed analysis of the industry circumstance.
My own strategy
According to me strategy is building a plan for a worst scenario. I have classified my strategy in five different ways.
we should have a brief knowledge about the market and the product in the market. The next is the planning we should decide what product we are going to manufacture and what things to be done to achieve it, like setting up a structure for an organisation from top to bottom what is the responsibility of an individual person in the concern. We should have an alternate plan if the market value goes down. We should have some knowledge about cultural sensitivity.
The immediate step next to planning is resources, we should have an enough amount of money before starting an organisation and another important factor is the human resources and also deep understanding about the strengths and weakness of the competitors. The next step is the motivation we should always motivate people by giving rewards to their work done and motivate where they are lagging by giving a proper guidance to them, We should give an enough pay for their work and keep them happy. A firm should have a good relationship with the customers in order to have an edge over the other competitors. The final phase is the goal every level in the organisation should work towards the goal. If any error occurs in level of organisation will lead to a failure.
This essay describes about classifications of strategy about three different theorists and describing about their strategy, and about my own strategy. To conclude the organisation can't use any fixed strategy but they can use these theorist as a guidance, the strategy should be created in such a way that it should be flexible and adapted to the existing market and changing our strategy according to the opponents is more important, and should have a strong tactics to get rid of any tough situation which is most necessary in winning.