Question

Strategic Posture is a valuable tool for making strategy in hard to predict environments. Discuss with relevant examples using 1000 words.

Answer 1

• The strategic posture is a valuable for making strategy and can be used to predict market and strategic environment which is concerned with the impact on strategy of the external environment, internal resources and competences, and the expectations and influence of stakeholders.
• Together, a consideration of the environment, strategic capability, the expectations and the purposes within the cultural and political framework of the organisation provides a basis for understanding the strategic position of an organization
• It is important to take account of the future and to assess whether the current strategy is a suitable fit with the strategic position. If not, the organisation needs to determine what changes it needs to make and whether it is capable of effecting such changes.
• There are three key aspects of strategic position, all of which have a powerful influence on the organisation’s strategy:the external environment culture and ethical values of the organisation and stakeholder influences.
• The organisation’s strategic capability in terms of its resources and competences.The real art of understanding strategic position is in being aware of the linkages between these three aspects, how they change over time and how they can be integrated to create value.
• The crucial point to remember is that the best understanding of the strategic position counts for nothing unless the organisation can use the knowledge effectively to develop and implement a successful strategy.
• Prior to the 19th century, strategic management tended to focus on the interface between strategy and the external environment in which the organisation operated. However, during the 19th century, the emphasis shifted towards internal factors or the ‘resource based view’ which stressed the role of the organisation’s resources and capabilities as the principal basis for its strategy.
• The organisation can exploit its unique collection of resources and competences to gain competitive advantage and in a way that is difficult for competitors to imitate.There are a number of tools and techniques that organisations can use to understand their strategic position.
• Many are listed in the Strategic Planning topic gateway. In respect of strategic position, it is important that:The organisation needs to use the resulting information effectively. It needs to be discussed, debated and challenged so that the implications can be understood.
• The organisation might need to develop its own tools and techniques to understand its position effectively. The tools and techniques listed below are only a means to an end.
• What really matters is that understanding the strategic position should help the organisation to formulate and implement a successful strategy The organisation should not paralyse itself through analysis.
• It may be best to select just a few tools and stick to those.SWOT analysis is a useful technique that pulls together the internal and external aspects of the strategic position by considering the organisation’s strengths, weaknesses, opportunities and threats.
• It can be difficult to identify whether a particular issue is actually a strength or a weakness. However, it is more important is to identify internal and external strategic factors and to understand their implications, rather than get overly concerned about such classifications.
• This methods considers what customers value in terms of product and service features. The organisation first needs to understand the threshold features that all providers must offer if they are to stay in the market.
• It must then understand the critical success factors or what it must do well in order to succeed and outperform the competition. In addition, the organisation should consider whether it has the resources and competences to succeed in that particular market.
• A useful framework distinguishes the threshold resources and competences that are required to operate in the market compared with those that are unique to the organisation and thus represent a key source of competitive advantage.
• It is important to note that even the threshold level may change over time so the organisation may need to continue to invest in its resource base simply to stay in business.
• This takes the above frameworks a stage further by developing some possible coherent outcomes to some of the key environmental influences. Given the high degree of uncertainty related to predictions, it is inadvisable to make the scenarios too complex.
• Their main function is not to predict the future, but to provide a useful debating tool to help decision makers to think more strategically.
• The Shell oil company is probably one of the best known users of scenarios and it is possible to access their current scenarios.Understanding the specific political and cultural context in which the organisation operates can have a significant impact on strategy.
• The corporate governance and regulatory framework – whom is the organisation there to serve and how should its purposes and direction be determined?
• Organisational stakeholders – whom does the organisation actually serve in practice and where does the power lie?
• Ethical considerations – which purposes should the organisation fulfil?
• Cultural issues –which purposes are prioritised in practice and why? Such analysis enables the organisation to understand the ease or difficulty with which new strategies could be adopted.
• However, it is arguable that this is the most important aspect of the strategic position to understand, given that a strategy is only successful when it is implemented effectively