Cliff Bowman is Professor of Strategic Management at Cranield School of Management in the UK.
Whilst it could be thought that this is an obvious thing to work out or position on a two by two grid - it would appear from practical application and from research this is typically not the case.
In the grid the best quadrant to be positioned in is where there is very high perceived use value value and low relative price. This leads to sustainable growth and strong competitive position. The weakest position is to have low perceived value and high relative price.
More difficult again is where you have high perceived value as high perceived price.
Braybrook and Lindblom stated that strategic decision making in organizations as being fundamentally uncertain and chaotic, and as being naturally hostile to the idea of formal strategic planning.
The merits of their work are that it provides a healthy check on naive attempts to install a strategic planning process which does not reflect - and take into account of the behavioural realities. Whilst highly analytical systems like Ansoff's focus on environmental scanning, SWOT analysis and gap analysis etc do provide some structure to strategic thought, they do not match the existing management process.
Campbell and Goold wrote both 'Strategies and Styles' (1987) and 'Corporate Level Strategy' (1994) Their first book distinguished between three styles of corporate strategy:
- The strategic planning style: where the senior management dominates not only the 'why?' of business strategies but also its 'what?'
- The strategic control style: here the corporate center may set the ground rules the 'why?' but the 'what?' and 'how?' are mainly down to the strategic business units.
- The financial control style: in this style the center is very focused in delivering the numbers and is 'hands off' if these are delivered well, and 'hands on' if they are not.
The main point in this typology is that the corporate parent needs to make choices in a) how it is going to interrelate with its strategic business units - choosing between the above styles and b) in also the areas as a center it will add value or not add, to its portfolio (So as to decide whether to provide central services)
Chandler in his book 'Strategy and Structure' suggested that before business structure is defined, the business strategy itself must be clarified. His thoughts fed into McKinsey's development of the 'strategic business unit' A strategic business unit can be defined as:
"A set of similar customer needs, similar customer types, and similar ways of delivering value to those target customers"
Typically many companies are organized around mre arbitrary lines than the above, (especially in the earlier periods of 1960s) and often contain a mass of business models. By the virtues of 'think market first, organization second', Chandler helps us to define organization structure more effectively.
De Geus is notable for introducing and popularising the key principles of scenario planning:
- 'Scenarios are story-lines of the future which give it a dynamic picture. These story-lines are merely possibilities - which are both internally consistent and also have a good degree of plausibility.
- The purpose of scenario development is to give us insights about possible futures - and absolutely not to make forecasts.
- The future story-line can be developed by identifying the key environmental systems which will shape the future, for example, the political, economic, market and competition.
- The shift from the present would to some future world occur by identifying possible transitional events - these give rise to either 'weak signals' (Ansoff) or potentially strong symptoms.
