Introduction
Strategy practice is crucial in running companies to effect the necessary change. It helps put into practice the theory of strategy, making it simple for companies to adopt the right and execute a planned company strategy. The strategy involves developing and using the leading resource to generate and capture value.
Notably, practice is dynamic, and strategy must be implemented over time. Some factors, such as the company’s developing capabilities and the combined methods, contribute to making it purposeful and successful. The choice of strategy is determined by what the organization desires to achieve in the future and the methods it will use to achieve it.
Strategy involves setting priorities, choosing objectives, and defining what the organization wants to be. Looking at the future and choosing the right path leads to real achievement. Notably, the achievement and implementation of the strategy will need leaders.
Quality leaders play a crucial role in implementing the strategy. They formulate a strategy and make effective decisions. Leaders must provide strategic thinking and planning, and administer operational activities that align with the organization’s vision.
Strategy Development within Organizations
Management should be able to understand the Boston Matrix, as it helps managers make informed decisions about what to invest in. The designed matrix was developed in the 20th century by a management consultant from Boston to help managers in all kinds of organizations determine which product lines to discontinue and invest in. Understanding the four categories of the Boston Matrix is crucial for managers to monitor market growth and market share. Management should know when to capitalize on new opportunities for both low and high market share and growth (Henry, 2021). Additionally, they recognize when they are not expected to generate significant profits, and further investment is unnecessary.
Managers must know when the market is slowly growing and when there are limited opportunities. When promising opportunities arise, managers must realize them and strategize what steps the business should take (Mansur & Salsabil, 2021). There are more question marks than answers in the market sector. For instance, the pandemic era was unpredictable; any setup strategies would be delayed or postponed for an unknown timeline.
The Boston Matrix suggests that there is nothing magical leaders can do to make a difference beyond strategizing. They must build on existing practices, maintain market share, preserve the status quo, and maximize profits. Managers must identify additional advantages and utilize the Boston Matrix model when resources are scarce, such as time, equipment, and human resources (Mansur & Salsabil, 2021). The Boston Matrix model has its assumptions, mainly targeting profitability through market share and growth. Notably, it does not address all other factors that lead to profitability, which prompt leaders to apply a combination of such theories and models.
Moreover, the management team can conceptualize different strategies for development to help plan and evaluate growth initiatives. Analysts must consider different levels of risk when dealing with products and markets. The Ansoff Matrix was developed as a fundamental framework to help pull together and consider growth opportunities.
With its market and products on the Y-axis and X-axis, respectively, it features different products and market concepts. For instance, the market concept can refer to demographic or target markets with distinct customer segments. There is market penetration and development under the market axis, which focuses on concepts such as increasing sales and expanding into new markets. On the other hand, product development and diversification help managers determine which new products to introduce in existing or new markets.
Various company managements would struggle to explain their position in the market in relation to the competition. The leadership would not disclose whether they are trailing or how close they are to being overtaken by other competitors. Working hard and waiting for success, as it is often guaranteed, would not be effective without a well-laid strategy.
VRIO framework can be explained as it makes an organization special; it encompasses value, rarity, imitability, and organization (Buzatu et al., 2019). VRIO can be deemed a framework that helps uncover and protect a firm’s capabilities and resources, giving it a long-term competitive edge. Additionally, it serves as a strategic planning tool that helps identify the critical elements of business success. Whether the management discovers or unleashes various sustainable competitive advantages, an analysis by VRIO helps to leverage and identify them as part of the strategic plan.
Management can use VRIO by adopting various strategic planning approaches. For instance, the team of leaders can consider both tangible and intangible items, such as human resources, materials, or financial resources, that lead to the most sustainable competitive advantage (Buzatu et al., 2019). However, if they choose to do so, they must follow the VRIO framework. The resource must add value to consumers, neutralize competition, and capitalize on opportunities (Ali & Anwar, 2021).
Additionally, rarity matters because the organization may be holding a resource in high demand and simultaneously making it difficult to find. Thus, controlling scarce capabilities and resources is critical (Shan et al., 2019). The imitability item under the VRIO framework guides the management in keeping critical data difficult and costly to imitate (Buzatu et al., 2019). It must keep the strategy and its supporting elements, such as technology, well into the future.
Investing in HR staff through training and developing reliable software will help maintain the firm’s competitive edge, fostering a sense of belonging that is unique to it alone, thereby avoiding imitation and potential overtaking by competitors. Additionally, team leaders and HR personnel must utilize the maintained data effectively to hire, manage, and promote employees (Samimi et al., 2022). Leaders should also assess employees’ performance and capture the value each employee brings. Consequently, they will efficiently execute their strategy as they know who to allocate to where.
Furthermore, management can consider the resource-based view (RBV) to inform strategy practice. Organizations may fail or succeed in the marketplace, but RBV can help take on the firm-specific perspective based on its ability to expand (Assensoh-Kodua, 2019). It also enhances the customer value chain, expands into new markets, and develops new products. In the practice of strategy, not all of an organization’s resources will be strategic, leading to a competitive advantage (Assensoh-Kodua, A., 2019). Resource immobility and heterogeneity will lead to a competitive advantage for the firm.
The Reasons for Having Divergent Strategic Processes
In an organization, leaders will find new ways and initiate them to improve the organization’s performance to the needed levels. Thus, it will include them employing divergent strategies to pursue strategic change (Helmold, 2022). They will aim to influence top management, characterized by divergent strategic processes and behaviors.
Most firms do not encourage divergent strategic behavior; most are emergent and extrinsic. However, the primary reason for the application is accountability. Managers are expected to demonstrate success within specific timelines or face accountability for failure. They must review each employee’s performance to ensure they are all aligned with the company’s goals and objectives.
Another reason for divergent strategies and processes is management’s decision-making. The manager might target different performance levels; for instance, they might compare organization-level versus individual-level performances (Iyer et al., 2021).
Additionally, it is crucial for team leaders and HR to effectively utilize the maintained data for recruiting, managing, and promoting employees. Managers may employ divergent strategies to influence self-enhancement in low-performing individuals (Iyer et al., 2021). For such reasons, only the management can be deemed incompetent if the firm fails in its strategies. Therefore, the management team ensures that every employee aims to close the performance gap. Most importantly, divergent strategies help champion new initiatives that make a meaningful difference.
The Role of Leader and Manager in the Strategy and Implementation Process
Leaders can apply different models to execute the organization’s strategy. For instance, leaders should apply and execute a different strategy if the marketplace is too competitive. Leaders should be able to make and take calculated risks within the company and formulate alternative approaches to existing ones (Fuertes et al., 2020).
The blue ocean strategy is one that a leader can focus on by creating new market spaces and reducing competition in the red ocean. The focus on the blue ocean is on creating a unique approach to growth and seeking success in redefined ways. Leaders in companies can adopt it as it aligns their efforts with transparency (Mansur & Salsabil, 2021). However, due to its unique approach, there are significant risks associated with implementing the blue ocean strategy.
Furthermore, a comparison to red ocean thinking involves navigating cutthroat competition. The strategy depends on the type of company, as some existing companies operate within the existing market space and compete for revenue (Mansur & Salsabil, 2021). Consequently, leaders should determine whether they can make the competition irrelevant within their organization as a future strategy and assess its potential success. Either they choose to beat the competition, exploit existing demand, and make value-cost trade-offs, or they opt for the blue ocean strategy of breaking into uncontested markets and capturing new demand.
Leaders and managers must set the behavior they wish to enforce on the employees to implement the organizational goals. Everyone needs joint contribution, commitment, and collaboration for the organization’s success. Subordinates need the support of their leaders if they are part of the strategic management process.
Notably, the leaders’ commitment has to match the firm’s strategic vision (Fuertes et al., 2020). The objective of the leaders must be integrated with that of the organization for all to be champions. Thus, they must practice loyalty and honesty in their power to effect the necessary strategic change within the organization.
Conclusion
Leaders who consider the practice of strategy offer a basis for it with a well-thought-out plan. They relate it to the vision and guide the organization in forming the proper strategy. Leaders will formulate the strategy process, making it align well with the goals and objectives. Leadership that chooses its topmost significant activity and aligns it with the vision will do everything to achieve the whole process. Notably, challenges and problems are inevitable; however, leaders are encouraged to possess problem-solving qualities and effective decision-making strategies.
Ultimately, leaders should evaluate the entire process to ensure its effectiveness. The strategies must be evaluated and adjusted in various ways to determine where change or improvement is needed. It makes the whole process viable and knows when and where to make fresh strategies in tandem with change. With strategy practice, companies will still need constant and sustained growth, whereby leadership plays a pivotal role.
Reference List
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Buzatu, A.I., Pleșea, D., Weiss, P. and Costache, C. (2019) ‘Managing organizations for sustainable business development: Interaction between VRIO framework and Mckinsey 7s framework’, New Trends in Sustainable Business and Consumption, pp.243-251.
Fuertes, G., Alfaro, M., Vargas, M., Gutierrez, S., Ternero, R. and Sabattin, J. (2020) ‘Conceptual framework for the strategic management: A literature review—descriptive’, Journal of Engineering, 2020, pp.1-21.
Helmold, M. (2022) Performance excellence in marketing, sales and pricing: Leveraging change, lean and innovation management. Springer Nature.
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Samimi, M., Cortes, A.F., Anderson, M.H. and Herrmann, P. (2022) ‘What is strategic leadership? Developing a framework for future research’, The Leadership Quarterly, 33(3), pp. 1-22.
Shan, S., Luo, Y., Zhou, Y. and Wei, Y. (2019) ‘Big data analysis adaptation and enterprises’ competitive advantages: The perspective of dynamic capability and resource-based theories’, Technology Analysis & Strategic Management, 31(4), pp.406-420.