Business Strategies Essay Example | Topics and Well Written Essays - 2500 words

Business Strategies - Essay Example This essay discusses ways to develop and execute different Business Strategies. In the process of developing a Business Strategy the firm uses its competencies to gain, sustain and enhance its strategic or competitive advantage. The source of competitive advantage for any business operating in an industry arises from the skillful use of its core competences. A combination of organizational behavior and resources ultimately leads to the development of capabilities that a firm used to build competencies. These competencies are used to gain a competitive advantage against rivals in an industry. Competitive advantage results in above average returns to the company. Businesses need a set of strategies to secure competitive advantage. The concept of strategies is not consensual in nature and has significantly evolved during the past decades, influencing the development of business strategy theories. In literature, it is usually considered that one can distinguish four main theoretical appr oaches to business strategies. These business strategy theories can be grouped into four main approaches: 1. Classical; 2. Evolutionary; 3. Processualist; and 4. Systemic. All these approaches are covered in this essay as well as concepts developed by the main thinkers associated with these four main approaches: Chandler, Ansoff, Porter, Cyert & March, Mintzberg, Pettigrew, Hannan & Freeman, Williamsons, Granovetter, Whitley. This essay also states that the nature of the power balance within organizations is an important consideration when discussing strategy development. ... According to Mintzberg (1998), strategy emerges from a pragmatic process of learning and adaptation. |in fact, the focus of this approach is the enterprises internal resources and their capacity to generate the firms' competitive advantage. This implies that strategy is all about long term construction and consolidation of distinctive internal competences. In the same way evolutionary strategies theories during 1980's state that environment is normally unpredictable to anticipate effectively and hence future oriented planning becomes unrealistic. It is the market which makes the important choice not the managers as established by the classical approach. For long term survival basically depends on best strategy which concentrates on maximizing chances of survival. The only real comparative advantage is relative efficiency; hence managers must concentrate on cost leadership. In 1990's the systemic approach emerges, taking the relativist position and considering that the objectives and practices of strategy depends on the cultures and powers of the respective local systems. Strategies may pursue objectives other than profit maximization if their social background frames other interests for them (e.g. personnel pride, managerial power, excellence). In this view, the parameters that guide strategy drive not so much from human cognitive bounds as from the cultural rules of the local society. As a result companies from different systems have different strategies i.e. strategies vary according to socio-political-economic systems & geographical locations. Almost all the strategies basically focus on private organizations and on competitive markets and consider profit maximization as their ultimate aim of strategy