CONCEPTUAL MODELS

The Role Of Conceptual Models In Strategic Management

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The Role Of Conceptual Models In Strategic Management

GENERAL DISCUSSION

Management tools can help to better understand particular aspects of an organization or its environment. For the following step - the analysis of insights provided by the models - however, there is no model. Management models are effective only if their users are able to realize connections and gaps and to draw appropriate conclusions. (Stires 2002: 46-88)

Market strategies should rely heavily on industry, competitor, country, and company analyses. Specifically, strategies should match internal resources with external opportunities and may focus on distinct geographies or consumer groups. For example, Super 8 seeks to appeal to cost-conscious customers, while the Four Seasons differentiates itself as a luxury hotel. Both Super 8 and the Four Seasons have found their strategies rewarding. In addition, many firms have shifted to best-value strategies. These are hybrid strategies that combine features of both cost-based and differentiation strategies. For example, Hilton's Hampton Inn chain offers value-added services such as in-room coffee makers and front-desk messages and faxes, and yet its hotels do not have restaurants on the premises. Customer acceptance suggests that this business model offers an excellent value proposition.

There is only a limited number of models that give direction how to make a profit, these models focus on differentiators or on portfolio management. However, the increasing availability of all kinds of knowledge through the internet and the globalisation of the financial markets are not taken into account in these models. This article investigates how a company can make a profit in the current market. It proposes a directive framework based on market relevancy and whether the company has a unique product. Based on these parameters, a company should either consolidate its position, aim to excel more and more in its products, effectively combine products or ally with another company to differentiate or profile itself more. Why are Wall mart and Google performing, and General Motors and City group suddenly not any more? What makes it that one shop in a street is 'hot', and the other is not? (Clemons 1988: 79-80)

A lot has to do with the people that thrive the company, and their talents. Of course, working hard is also important, but it is no guarantee for success. Decisive is what you offer, to whom your are offering it and how you do it. That's your business model. Research has shown that your resources and your strategy are the most important influencers on your success in the market. Respectively 28% and 41% of the variance in success is caused by variances in recourses and strategy. The intensity of the competition is not that important. Only powerful suppliers can bargain out their share of your financial results. The concept of the Strategy accelerator combines aspects from 'outside-in' theories that primarily focus on market opportunities and 'inside-out' theories like the Resource Based View that take the capabilities of the company as a starting ...