The strategy has taken a big place in the firm and it has become the only way to do business. Big companies have special staff to formulate strategies, whereas in the smaller firms it is the CEO and/or the Head Officer who takes and makes the strategic decisions. Some definitions are necessary to understand the complexity of the strategy. The strategic management is defined as "the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives" (David, 1998). According F.R. David, the strategic management includes 3 different stages: the strategy formulation, the strategy implementation and the strategy evaluation. In addition, there exists a Strategic Management Model to guide the managers through their task. Conceptual models are most commonly used in strategic management. But what is the role of these models in strategic management? How do models contribute to decision-making? In the first part, we will try to answer these questions.
[...] It exists in numerous models in strategy such as PESTEL model, Product Cycle Life model, BCG matrix, five forces model or SWOT analysis, etc Each model has its own characteristics, own objectives and was created by different famous strategists or organization such as Professor Michael Porter or the Boston Consulting Group. Fred R. David argues “every model represents some kind of process”. Why models are so commonly used in strategic management? The strategic management itself can be used as a model, we can ask them: why are there so many models in strategic management? [...]
[...] However even if Porter thought that these hypothesis are incompatible, that appeared compatible for those in the “combination strategy school” who explained that the firm having a really good combination of both strategies created to a synergy which overcame all disadvantages. The sustainer's of this hypothesis based their arguments on two points: the first one was based on broad economic relationships and the second one was based on a demonstration in which individual firms will identify such relationships, unique to a small number of firms in an industry (Parnell, 2006). [...]
[...] These three generic strategies are several strengths and weaknesses which have to be considered by firms adopting its. Many authors have their point of view on this model and it changes with the time. In fact, our business evaluates it every day with new technology, as internet for example. The firm has to change and adapt their strategy in function of that but also in function of demands and needs of its customers which vary all the time. And even if the companies try to pre-empt that we don't know of what will be done tomorrow. [...]
[...] In fact the models contribute to the quality of the decision-making because they are tools with their own particular elements; with their efficiency, the manager decreases the risk of mistakes and increase the level of good decision-making Competitive strategy: Porter's Generic strategies model Generic strategies model is one of the numerous models that guides the strategic management. It is largely the result of work of Michael Porter, who identified three internally consistent generic strategies. Porter defined, in his book, a competitive strategy as art of relating a company to the economic environment within which exists”. [...]
[...] The differentiation In order to realize this competitive advantage of differentiation, the firm has to develop one product or service with unique attributes which will be valued by customers different or better than the competitors' products. These unique attributes can take many forms such as design or brand image, technology, features, customer service or dealer network (Porter, 1980). This value-addition of product/service leads to a premium price that the customer is ready to pay for, even if it is more expensive. [...]
APA Style reference
For your bibliographyOnline reading
with our online readerContent validated
by our reading committee
