Distinct Strategy as the Basis of Organizational Effectiveness

The importance of how sound a well-structured business strategy is to an organization cannot be underestimated, this is important because the business strategy aids the organization in implementing ideas and most importantly achieving the overall organizational goals that has been set by the organization. Having a distinct strategy is very crucial for the long term success of an organization because creating that distinct strategy is the core for rising above competition and eventually managing the business.

Wheelan mentions that for an organization to thrive, senior leadership must look within the corporation itself to identify internal strategic factors, critical strengths and weakness that are likely to determine whether a company will take advantage of opportunities, while avoiding threats. This is significant because it gives management the essential time to examine their performance and also what capabilities they possess as an organization, crucially when it comes to creating strategy there is no “generic” strategy that works across different business sectors.

Martin, Claire and Philip mentions for example the apparel industry where unpredictability is a norm. While, the oil industry is a different industry where predictability is the norm, having an apparel industry strategist in the oil industry could prove to be a mismatch.

Organizations in different industries should preferably be effecting, planning and also evolving their strategies in diverse ways but according to the article the BCG survey that was carried out by top executives from 120 companies across the globe working in 10 major industries shows otherwise particularly with application in real life conditions, the article states that a probable method is what is prevalent across the 10 industries.

With this in mind, one begs to ask the question what are the dynamics that should be well-thought-out when choosing the strategy an organization must adhere to? In my opinion choosing a strategy begins with a thorough knowledge of the business atmosphere. It's about predictability: how far into the future and how accurately can you confidently forecast demand, corporate performance, competitive dynamics and market expectations? Also it's about malleability: to what extent can you or your competitors influence those factors? A structured analysis along these proportions by top management of organizations will assist them in deciding the most suitable strategic method. Martin, Claire and Philip mentions four strategic methods:

1. Classical: Consists of business environments that are immutable and predictable in nature. A typical example is ExxonMobil where strategists have created an upstream oil extraction plan that foresees as long as 10 years into the future with downstream production capacity plan for 5 years in advance. Other typical industries that utilize the classical method include Information Technology, Pharmaceuticals and the oil and gas industries.
2. Adaptive: Consists of business environments that are immutable and unpredictable in nature. A typical example is Spanish Apparel industry, Zara where there is a strategy to design, manufacture and ship garments to their outlets within a two to three weeks’ timeframe, the company has a competitive advantage above its competitors who average about four to six months to perform the same functions. Zara is able to sustain this strategy by having an incredible flexible supply chain network and also having an unbelievable relationship with their external suppliers who work simultaneously with their marketers and designers. Other typical industries that make use of the adaptive approach include the Textile industry, Construction material industry as well as the Bio-technology industry.
3. Shaping: Consists of business environments that are mutable and unpredictable in nature. A typical example is Facebook who made their networking platform accessible to outside developers, this strategic move by the strategic department of the organization brought a lot of traffic to its site regarding applications, the effect of this was that Facebook was able to kick out Myspace from total domination who were at the time the incumbent company, the strategy paid off as Facebook finally became the most popular social networking site in the Globe. Other typical industries who make use of the shaping model include the Airline industry who in a million years couldn’t have predicted the negative impact the COVID-19 pandemic is having on the airline industry at the moment. Another example is the Health-care technology industry who are also having torrid time in developing a vaccine to curb the same pandemic.
4. Visionary: Consists of business environments that are mutable and unpredictable in nature. A typical example is UPS who projected how the emergence of the internet will drastically influence the commercial direction of the package delivery industry by setting up a multi-functional committee that came from Sales, marketing, information technology and finance in a decision to invest a billion dollars annually to integrate web providing service and package tracking operations with the view to expanding to Global delivery standards. The bold decision to go ahead with this strategy ended up with the company getting 60% of the e-commerce delivery market. Other typical industries who make use of visionary strategy model include the Insurance industry, Aerospace industry and Media.

Therefore, it is important to recognize the precise environment under which industries are categorized, a thorough understanding of this categories will help assist the strategic department of organizations to plan for the elongated success of the organization. Over my period in this MIM program, a lot of articles including this particular one has helped me to expand my knowledge over a vast array of success stories just by the ability to classify my industry in aspects of malleability and predictability and ultimately creating functional corporate strategies.

I have worked over the years in the service industry precisely as a health care administrator at my dad’s private hospital and from what I can deduce so far from this reflection, our organization comes under the category of a business that is mutable and unpredictable in nature. Therefore as a vital decision marker in my family owned organization, I am obliged to practice the beliefs of creating a Shaping strategy, in order for my organization to achieve our stated organizational goals.

Malnight, Buche and Dhanaraj mentions how purpose can aid in the flexibility of strategy by stating how leaders must constantly assess how purpose can guide strategy and must be willing to adjust to a continuous “change” in business conditions and to that effect I know how important flexibility is to the execution of a strategy. As someone who will implement the shaping strategy in my organization, I must be able to see outside the confines of my organization and be able to work with a variety of partners to revolutionize the healthcare industry, I must also leverage on the use of the latest technologies and also invest aggressively in the area of research and development. Introducing these strategies will effectively aid in the day to day running of business activities in our family owned organization and most importantly assess my personal ability as a vital decision maker in my organization.

I however feel personally that top management in organizations have to embrace a wide variety of strategic models simultaneously to get lasting success. Martin, Claire and Philip identifies that on average companies with three year total shareholder returns of companies that use the right style were 4-8% higher than those who didn’t, I find this figure very vague with inadequate data for me to be fully persuaded about choosing the right style of strategy, further research in this area with sufficient data and verifiable information may change my perception about this aspect.

Another aspect that is very vital when it comes to choosing a strategic style for an industry is how sustainable that strategy is, a lot of times companies choose strategies that prove unsustainable or loses track of what the company aimed to achieve over a period of time, to effectively get back to the initial proposed strategy Ohmae mentions that strategy should always be geared towards developing value for customers and identifies how this should be the first step even before thinking of competition. It is also important to know that choice of strategy across industries should not be solely based on responding to what competition has done all the time Ohmae identifies that companies should watch for reflex from competitors and must leverage on the balance of acting or ignoring, to effectively do this leaders of organizations must be able to find the right balance between acting or ignoring, this is where the importance of leadership is crucial, to affirm this point Montgomery mentions that if a company wants to be continuously sustainable leaders must create and recreate reasons for an industries continued existence.

In conclusion, after reading this article I now fully understand that what determines how well an organization performs whether positively or negatively depends on the position of the market place as well as the company’s choice of strategy and a thorough knowledge of its immediate environment. Wheelan mentions the importance of scanning the environment which entails the evaluation, monitoring and dissemination of information from external and internal environment to key people within a corporation and to that effect I will conclude this reflection report by saying that a triumphant strategy must take into consideration a corporations core competencies, competitive capabilities, internal resources and external position.