What Is Strategic Management?

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Introduction There is no single, universally accepted definition for strategy. Some understand it as a deliberate plan, drawn up to achieve set goals, others see it more as a process, whereby a company’s decision and actions are made in alignment with opportunities or threats in the industry. Even others define it as a pattern of consistent actions in decision-making and lastly there are those with a military view of strategy, who consider it a manoeuvre to beat and outsmart the competition (Parthasarthy, 2006). By drawing from each of the definitions, one could say that strategy and by extension, strategic management, is constituted of short-term strategies involving managing and planning for the present and long-term decisions and actions, made, taken and implemented by managers to achieve superior competitive advantage, compared to their competitors.
This coursework will highlight the key elements of organisational strategy by means of the POSIES model. The elements relevant for this analysis are POSI (purpose – objectives – strategy - implementation). Parthasarthy (2006) integrates another element into what he calls the strategic management process, namely, the situational analysis, wherein the external and the internal environment are taken into consideration. This assessment of competitive opportunities and threats is set at the same stage than the objectives in the POSIES. Apart from discussing the relevant theory for the different stages of the strategic management process, this coursework will also analyse and relate strategic management theory to the working examples of two companies.
IKEA is one of the world’s top low-cost furniture retailers. IKEA was founded in Sweden by Ingvar Kamprad in 1943, when he was just 17 years old and is now owned by a Dutch-registered foundation, controlled by the Kamprad family. Inter IKEA Systems B.V. is the owner/franchiser of the IKEA trademark and Concept. The company name is a composite of the first letters in his



References:  Anonymous (2004) Business Heroes: Ingvar Kamprad, Business Strategy Review.  Arnold, S.J. (2002) Lessons Learned From The World’s Best Retailers, International Journal Of Retail & Distribution Management. Vol.30, No.11, p562-570.  Bartlett, C.A. & Nunda, A. (1996) Ingvar Kamprad and IKEA Summary, Harvard Business Online, taken from Bartlett & Nanda (1990) Ingvar Kamprad and IKEA. Harvard Business School Publishing: Boston, Case 9-390-132.  Boddy, D. (1998) Management – An Introduction. Prentice Hall: New York.  Capell, K. (2005) Ikea: How The Swedish Retailer Became A Global Cult Brand, Business Week. www.businessweek.com/magazine/content/05_46/b3959001.htm.  Chandler, S. (1993) Swedish Marketers Going Global, Retail Business: Retail Trade Reviews. March No.25, p.71-76.  Collins, J.C. & Porras, J.I. (1996) Building Your Company’s Vision, Harvard Business Review. September-October.  Edvardsson, B  Edvardsson, B., Enquist, B. & Hay, M. (2006)Values-Based Service Brands: Narratives From IKEA, Managing Service Quality. Vol.16, No.3, p.230-246.  Gleba, B. & Cavanagh, L. (2005) Applying The IKEA Values To Improving The Intranet, Strategic Communication Management. Vol.9, No.6.  Holmes, S. & Bernstein, A. (2004) The New Nike, Business Week Online. September www.businessweek.com/magazine/content/04_38/b3900001_mz001.htm  Kaplan, R.S  Kling, K. & Goteman, I. (2003) IKEA CEO Anders Dahlvig On International Growth And IKEA’s Unique Corporate Culture And Brand Identity, Academy of Management Executive. Vol.17, No.1.  Leavy, B. (2004) Outsourcing Strategies: Opportunities And Risks, Strategy & Leadership. Vol.32, No.6, p.20-5.  Mårtenson, R. (2001) IKEA: Visionary Brand Building Through Employees. European Retail Digest. Vol.31, No.12.  Normann, R. & Ramirez R. (1993) From Value Chain To Value Constellation: Designing Interactive Strategy, Harvard Business Review, July/August, p.65-77.  Parthasarthy, R. (2006) Fundamentals Of Strategic Management. Houghton Mifflin: Boston.  Porter, M.E. (1980) Competitive Strategy Free Press: New York. As cited in Parthasarthy, (2006)  Ransdell, E  Sanger, M. (1998) Supporting the balanced scorecard. Work Study. Vol.47, No.6.  sales for the financial year 2006 totalled 17.8 billion € (IKEA, 2007),  increasing difficulty to get permission to locate stores, because of “growing trends to oppose retail in urban areas for envi- ronmental reasons” (Kling et al,2003) Weaknesses  supply chain limiting expansion (Capell, 2005),  controversial advertising, not targeted Opportunities  mass customisation (Nikeid, 2007),  Nike reported net revenues of $15 billion in 2006, 9% increase from 05 (Nike, 2007),  global brand name and market share (no.1 athletic footwear maker, recognisable

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