STRATEGIC MANAGEMENT

Strategic Management

Strategic Management

Introduction

Vision and mission are frequently discussed in academic and practitioner literature and widely accepted (although not universally) as key variables in the formation of strategic and operational plans and construction of cohesive organizational cultures. However, when the literature is examined in detail, there is little evidence of empirical research that has sought to critically evaluate these constructs and their impact on firm performance, particularly within the sphere of small business research. Yet, strategic planning, including the assessment of its value, remains an important and relevant research topic for those interested in organizational and management development. This relevance is evidenced by a recent paper (Delmar and Shane, 2003) in the Strategic Management Journal, which explored the value of business planning in the development of new ventures and illustrated that many questions about strategic planning remain unanswered. Ongunmokun (1996, p. 203) has also argued that:

… despite the high level of continuing interest in strategic planning, very little research has been done into the actual planning practices of small business organisations. Most of the research undertaken to date in relation to small business has been either case studies or surveys directed towards identifying the value of planning and investigating the presence or absence of formal planning in small businesses. There is little or no empirical research showing the principal activities that comprise the planning practices of a selected group of small businesses that plan.

Strategic Management in Supermarket and Bank

Generic Strategies are characterised by an individual retailer's response to the industry structure. For a giant retailer, such as Tesco, to obtain a sustainable competitive advantage they should follow either one of three generic strategies, developed by Porter.

The first strategy of cost leadership is one in which Tesco can strive to have the lowest costs in the industry and offer its products and services to a broad market at the lowest prices. This strategy will be based on the Tesco's ability to control their operating costs so well that they are able to price their products competitively and be able to generate high profit margins, thus having a significant competitive advantage. If Tesco uses another strategy of differentiation, than it has to try to offer services and products with unique features that customers value. Tesco will be able to create brand loyalty for their offerings, and thus, price inelasticity on the part of buyers. Breadth of product offerings, technology, special features, or customer service are popular approaches to differentiation.

The last strategy of focus can be either a cost leadership or differentiation strategy aimed toward a narrow, focused market. In pursuing a cost leadership strategy Tesco focuses on the creation of internal efficiencies that will help them withstand external pressures. Therefore, it appears reasonable to think that Tesco will have frequent interactions with the governmental/regulatory and supplier sectors of the environment. In accordance to this framework, while both overall cost leadership and differentiation strategies are aimed at the broad market, Tesco may also choose to confine their product to specific market ...