Analsying the five different management strategies


Henry Mintzberg developed five management strategies called plan, ploy, pattern, position and perspective. According to Mintzberg, strategic management is not based on a single approach; actually it has been used for a while in different methods even if it has a formal path.

Strategy as plan: Mintzberg concluded strategy is a plan or a key to deal with situations. In this definition we analyse that strategy is made for developing an action for the future development. To Peter Drucker it is determined motion and for Moore it is a layout formulated for the further development process of a firm. For instance a company has a strategy to get over the market and the competitor. In the management it is described as absolute combination of people formed to achieve the determined goals.

Strategy can be a ploy too like the plan where, it is a trick to confuse the competitor. For example a corporation can threaten the other competitors by expanding the firm but; actual meaning is to stop the competitor growth. In this the strategy is the threat as such is a ploy.

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Defining the strategy as plan and ploy is not sufficient so, Mintzberg gave the third definition as pattern to encompass the resulting behaviour of plan and ploy. Pattern is a flow of consecutive actions to implement the plan. Strategy is consistent in behaviour whether it is destined or not. For example when Picasso painted blue for a time and ford released his first model car in black was the strategy. Definition of plan and pattern can be independent of each other where plan may not be a real one, while pattern may come without assumption. Normally strategies relate to human actions not to human designs.

Strategy as a position: according to Mintzberg, position is location of firm where the individuals like to call an environment. Where it is a mediating force or match and a position can be selected priory and obtained through a plan or ploy where possibly found through pattern. Position inherently permits us to open the approach with respect to a single competitor and it can go beyond competition and economic values.

The position describes the external/internal environment where the fifth strategy explains about the perspective functions of the firm not just a selected position. This suggests a way of perceiving the world and above all it is concept of frame work shared by the individuals of the organisation through their intentions.

Mintzberg developed ten schools of strategic management. The first school is the Design school where the strategy formation as conceptual process. The design school is a joint venture of general management group at the Harvard business school. The main motto of the school is capture success. Design school consists of seven basic premises.

The second school is the Planning school, strategy formation as a formal process where it is started parallel with the design school. This was hardly absent today because strategic planning was not fully developed and one concept was already used in the design school. The planning school consists of three premises. The third school is the positioning school, strategy formation as an analytical process. Positioning school used the most premises of planning and design school where it also consists of three waves and six premises. The fourth school is the entrepreneurial school, strategy formation as a visionary process. This school focuses the formation of strategy process and also the judgement, wisdom and insight where above it's a vision. The fifth school is cognitive school, strategy formation as mental process. If we really understand the visions then we have to explore the mind of a strategist is cognitive school and it consists of four aspects, perception, concept attainment, preconception and strategic styles.

The learning school: strategy formation as an emergent process, this strategy explains if the strategist cannot depend on single procedure and technique they use leaning strategy to learn over time and this concept simple in enough, but practising is another concept. The political school: strategy formation as a power process where in the learning school it already discusses about the power and politics but here it removes altogether and characterises the strategy as overall political process. It is divided into two categories as micro and macro. The cultural school: strategy formation as an ideological process, the reverse of politics is the culture. Political assumes the being as firm and fragments, where the culture connects the individuals as integrated being. Culture tends to be in the concept of anthropology.

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The environmental school: strategy formation as a passive process, which helps in bringing our view of strategy formation into balance one through positioning the environment along the leadership. The configuration school: strategy formation as an episodic process, it mainly focussed on the classification of organisations like what kind of environment they work and how they are integrated into stages in different cycles. This approach can be found in all the social sciences with regular interval.

Michael porter developed a framework which creates a competitive model of firm as influenced by five forces. A manager who wants a change or development to his firm can use these forces to better understand the firm. The five P's are rivalry, threat of substitutes, buyer power, Supplier power and barriers to entry. If rivalry is low the organisation is said to be disciplined and competition among the organisations reduces the profits to nil. The intensity varies among the companies and the intensity can be influenced by many characteristics like large number of firms, slow growth rate etc. For improving an advantage over the rivals the company may choose different methods like changing prices, product improvement, creatively using channels of distribution and having good relationship with the suppliers.

Threat of substitutes: in this model products will refer to be same in compare with other industries and the product is affected when there is threat of change in the price for a substitute product. Buyer power: the power of buyer is based on the effect where the customers have on the industry producing the product. If the buyer power is strong, the product will be a standardised one. If it is low buyers may be fragmented and they no idea about the product. Supplier power: a manufacturing requires the raw materials and this requirement leads to build the buyer and supplier relationship. Suppliers will be strong if the customers are powerful and when there is significant cost to switch suppliers. If the customers are low and only concentrated purchasers the supplier power will be less.

Barriers to entry is not only that rivals pose threat to firms in a society and the new firms which enter the society also affects current products and increases the competitor value. The profit will be always same if there is free entry and exit in the society. Barriers to entry are more when compared to the normal adjustment that an industry makes and barriers to entry is the basic unique characteristic which defines the industry.

Michael porter evolved three generic strategies, cost leadership, differentiation and focus for the strategic management. Cost leadership: this strategy involves in reducing the organisation cost to be the lowest within their industry surroundings. The cost is drive down from all the products to labour sourcing, where the leader will be broad minded and he can cover the cost by sufficient sales. The second strategy is Differentiation strategy, where the organisations try to stand out from their product ranges from other companies to become successful. With a different concept, the company clearly concentrates on a single segment and charges for the differentiated value. The third strategy is the Niche strategy, here it focuses on a single product and become famous for the services and products within the particular segment. They can be succeeded in the niche strategy by offering low cost or by differentiating the new technology formulated in the product.

Igor Ansoff developed a strategic management school of thought and it is environment driven where it is introduced in a unique format. In the corporate strategy explored a systematic approach of strategy formation and decision through a framework of theories, techniques and models. Ansoff evolved four types of organisational decisions related to strategy, policy, programmes and procedures. According to chandler's work he classified decision making as strategy and structure, which differentiates decision as strategic, administrative or operating. Strategic is mainly about the areas of product and administrative about allocation of resources. To find a relation between the past and future he found components of strategies like product - market scope, growth vector, competitive advantage and synergy.

Product market scope gives the clear vision about the future product or business for the organisation. Growth vector explains about the way of exploring how an organisation growth can be attempted. Competitive advantage describes the advantages of organisation has and it helps to compete effectively in the industry. Synergy gives the result of the whole thing which is greater than the sum of other parts and it needs for an examination to suit the core capabilities of the organisation.

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Creating my own strategy, we have to fallow three basic concepts, analyse, formulate, and act for attaining the organisation goal.

Figure : own strategy

Strategic Analysing: in this we have analyse the factors like environment, organisation, creativity and conditions among the market. Sometimes the environment may be simple and stable where it increases the sales of our product. We have to analyse these factors and undertake a strategic control to experiment the product in the market and there should be constant refining in the strategy according to the changes in the environment. Finally we have to improve the market value by avoiding the mistakes which we did in the past.

Strategy Formulation: it is the process of describing the steps for achieving the goals of the organisation. The strategies which you follow will reflect the environmental analysis and guides you to fulfil your vision and result in reaching the organisational goals. We can use the tools like swot analysis, Porter's model for industry analysis in formulating the strategies. Here we have the combination of data and knowledge about the product, which balances the short and long term goals of the company.

Strategic Action: this is the final stage of achieving the goals, when the other two parts analysis and formulation is over. It should be clear in this strategy by making a clear choice of product and risk taking is the more important factor which determines the implementation of the product. By risk taking we have to calculate the reactions and acquire the resources in the right place to manufacture the product at the specified given time. At last we have to fallow this as cycle of management for introducing new products in the industry where the results can be modified by changing the formation of strategies.