Critically evaluate the importance of strategy process and strategy context in determining strategy content.
Nowadays, the business industry changes rapidly, and for the company to succeed in this environment, it is vital to manage day to day business activities, and spend time monitoring and adapting to the changes that are happening in technology and business. The purpose of this essay is to critically examine the importance of strategy process and strategy context and its connection with strategy content. Traditionally, these are the three characteristics of strategy that can be identified in everyday strategic problem situation. This essay also involves a number of different viewpoints of strategic management gurus and provides several well-known industry examples in order to support the given arguments.
Alfred D. Chandler (1963), defined strategy as the determination of the basic long-run goals and objectives of an enterprise and the adoption of courses of actions and the allocation of resources necessary for carrying out these goals. In other words, strategy is a long-term direction of any business organisation with a various set of day to day activities. Strategies generally exist at many different levels in any organisation what helps to ensure a specific place in the market and tend to follow the business direction. Global companies such as Apple, Amazon, IBM and Coca-Cola established its position in a particular industry relative to competitors by implementing specific strategies and tactics that led to greater income for their business. Due to the constantly changing nature of business environment, Henry Mintzberg distinguished strategy as either deliberate (or intended) and emergent which are both important. Objectives and strategy may suddenly change in response to environmental changes or because the business organisation itself has changed. The launch of Apple’s iPod in 2001 is a great example of success over Sony’s Walkman based on deliberate and emergent strategies. It is interesting to note, that 86 per cent of 40 business leaders admitted to having no consistent plan within their business but set leadership as the starting point of strategy. (Sunley, 2011) Some strategies may be planned at least at their first steps, but many more just simply emerge in an organisation without being consciously intended or being deliberate acts. (McGee et al., 2005) For instance, Google Company does not have a consistent five year strategy plan as the focus is primarily on what is innovative and exciting to their consumers in a particular point in time.
Having considered what strategy is, it is reasonable to discuss and analyse the meaning and importance of strategy process. According to Johnson (2014), strategy process examines how strategies are formed and implemented. It is argued, that the process could be divided into four steps of actions – identifying, diagnosing, conceiving, and realising. From the managers’ perspective, it helps to monitor and evaluate the whole picture of the strategy. In 2010, Unilever, a global FMCG company, has launched the Sustainable Living Plan with the aim to improve people’s lives and growth sales by 2020. Across 190 countries, Unilever employees are monitoring the progress of business plan regularly. Managers also measure whether the activities being taken in the organisation are in line with the decision selected and whether the outcomes are in line with what was expected. In today’s quickly moving market situation, strategy basically consists of a set of micro decisions made by individuals in the organisation every day. For many successful companies, environmental values are now becoming a fundamental part of their cultures and management operational processes. In that case, in order to run a logical and clear strategic process within any business, it is critically vital to understand the nature of the internal and external environment in which an organisation operates.
The set of circumstances under which both the strategy content and strategy process are determined is referred to as the strategy context. (De Wit, 2014) It refers to both the internal and the external contexts of organisations. A thorough industry analysis, known as external environment, makes sense of how strategies have to fit with culture and surroundings by using concepts like SWOT, PESTEL and Porter’s Five Forces. The internal environment is composed of organisational culture, human resources and management skills of the workforce that are significantly impact on the inside comfort of organisation. For any business to grow successfully, all managers must be able to forecast, identify and deal with the internal and external environmental change. The techniques in which managers interpret the environment and instigate changes in their organisations is a central part of the strategy process. (McGee et al., 2005) However, if an organisation reacts too late to environmental changes, there is a high risk of failure. There are two causes for strategy fail: not understanding the environment in which the organisation is going to operate and inability to adapt to unexpected changes in the environment such as financial crisis or technological innovations. For instance, Tesco plc, a multinational grocery and retailer, left its loss-making business in the US and Japan market in 2011 due to the lack of knowledge and research of external environment. Besides, almost all well-known US Internet companies such as Yahoo, Google, eBay or Facebook met with failure in China in the last ten years. The reason was that China is different in culture comparing with the US. In eBay’s case, the company did not have enough awareness about the market situation and customers’ demand what made it difficult to compete with the rivals like Alibaba and Taobao. Unilever, in turn, is a successful example of how the company entered many low- and medium- income countries by using environmental strategy and adapted their products to each region market. Matching the organisation to its environment requires a more proper structure, different schemes and an appropriate organisational culture, which are aspects of strategic management. In fact, both environments has an important impact over the development of a company’s strategy and its degree of success.
The last but not the least strategy dimension is strategy content. De Wit & Meyer (2014) defined content as a set of combined decisions and choices that lead a company into the future. Its aim is to create organized, meaningful, engaging and sustainable content in order to connect with the audience. Content strategy development requires company, customer and competitor analysis what helps to stay ahead of competition and increase sales. In 2013, Coca Cola launched a new campaign called “Coming Together” with the aim to push ‘no sugar coke’ to the US market. Coca cola rose the issue of obesity among the youth and communicated with them through social media, seminars, web and direct mail providing useful instructions of how to fight with obesity. Indeed, Coca Cola delivered the right content to the right user at the right time. Content management is all about the delivery of the exact information, product or service to the target audience in all the places across each stage of the buying process. For example, the creation of the website with a powerful and easy in use content, makes website visitors’ and internal managers’ life as easy as possible. Many airlines companies like British Airways, EasyJet or Ryanair, provide a number of options when booking the flight online: hotel reservations, car rental, transport or parking services. It is possible to conclude, that marketing is a component of strategy content because it has a direct effect on sales and profitability of any business and helps to engage with the customers daily.
The essay was written to highlight that the way in which the strategy process is organised have a significant impact on the strategy content, similarly as the content of the current strategy strongly influence the way in which the strategy process will be led in the future. (De Wit, 2014) Different strategic management theorists concluded that there are many definitions of strategy and numerous ideas of how strategies should be implemented. A number of well-known industry examples from Tesco, Coca Cola, Apple, Google, Unilever and eBay and other companies supported the above mentioned arguments. I agree with a statement said by Mintzberg (2003), that the success of a strategy depends on doing many things well and integrating between them. If there is no fit among activities, there is no distinctive strategy and little sustainability.