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What are most significant differences between design/positioning /planning school of strategic management and resource based view? The design school is applied by formulating clear and unique strategies in a deliberate process. The design school is also known as process of conception, in this process, the internal situation of the organization of the environment (12Manage, n.d.) .The planning school; thorough steps are taken from the moment of the analysis of the situation to the actual execution (12Manage, n.d.). The positioning school, this is also known as analytical process, this strategy is used by placing the organization within its industry, and looks at how the organization can improve its position with their respective industry (12Manage, n.d.). Even though approaches to the design, planning and positioning are different, the 'design' and 'planning' schools are both prescriptive in character, as is the 'positioning' school of thought. In the three schools of thought discussed above, the environment is seen as relatively constant (Volberda & Elfring, 2001).
Resource based view, is a method of looking at the firm as a bundle of resources in turn of approaching strategy (Powell, 2005). To achieve sustainable competitive advantages, resource based view evaluates internal resources of the organization and emphasizes resources and capabilities (Madhani, 2009). To enable firms' carry out their activities, resources can be considered as inputs. Strategic choices decided by firm while competing in external business environment is determined by internal resources and capabilities (Madhani, 2009)
The most significant difference between the perspective school of management and resource based view is that the strategic school of management emphasizes economies of scale and scope such as giving a guide to organization on acquisition, mergers and diversification, budgeting, and analyzing the organizations position within the industry resource based view emphasizing on brand and value creation. While the perspective schools use tools such as Swot analysis, scenario planning and five forces in order to think, program and analyze, resource based view makes an organization to look at their tangible and intangible assets, processes, skills and the leadership aspect of the company .In order to illustrate the significant differences, I would like to compare the differences between the schools of perspective and resource based view. Positioning school enable an organization to identify their position by identifying cost leadership, focus and differentiation,(ÐrÐµnd, 2006 ), while on the other hand RBV gives importance to the leadership level of the organization and views the firm as bunch of resources which is said in the above. However, organization who effectively able to use both of them effectively it would benefit the organization in order to reach their goal and know where they stand, for example they are able to use the SWOT analysis to identify their strength, weakness, opportunities and threats and at the same time use the resource based view to identify what values or brand name in the organization which can be seen as a large asset to the organization. The biggest advantage of resource-based view is that the resource one company holds are hard to be practiced by a competitor.
How do these different approaches allow to gain insights into the way successful organizations execute strategy?
In order to succeed, companies have to deal with different parts of strategies independently and practice balanced strategies and apply a balanced approach to business system. Many organizations have successfully used these different approaches and executing strategy.
I would be using 3 case studies in order to give a better on how this organization uses these different approaches to execute their strategy.
Case study #1
Business Management Case Study: How Cisco Applies Companywide Expertise for
Integrating Acquired Companies
Cisco is a IT company which uses resource based view and the design school. Cisco uses acquisition of other companies to rapidly offer new products, reach new markets, and grow revenue (Cisco, n.d.). Since 1993, the organization have acquired more than 120 companies which consist of small startups to large established firms such as Linksys, Scientific Atlanta, and WebE (Cisco, n.d.). The phases, which is followed by Cisco, clearly illustrates that the organization is effectively using resource-based view and designing school. By using their internal resources such as cross-function teams, common principles, and standard processes, Cisco has developed a formal, repeatable approach to acquisition integration (Cisco, n.d.). The acquisition integration is done by using 3 phases, firstly discovery and planning, where the organization they assess their scope, model their business and integration planning, the second phase, execution, the organization ensure that they are operational readiness and activate their employee, resources and integration task in order to execute the deal with the acquired company, and the final phase, monitoring, ongoing measurement an adjustment of the integration activity (Cisco, n.d.).As stated by Graeme Wood, Direct of the acquisition integration, in the case study, Cisco centralizes acquisition integration as it is effect and allow them to capture best practices, use their skills and resources more effectively and apply discipline and over sight to the entire acquisition process (Cisco, n.d.). Another statement from Pat Belotti, senior manager of sales acquisition in the case study, integrated Cisco worldwide sales operation, the most important benefit of Cisco's standard integration process that the process help Cisco avoid a purge in revenues, in fact the organization is able to increase their revenues rapidly by applying the organization's resources to assist the acquitted sales department reach their maximum potential (Cisco, n.d.)
Case Study #2
Adding value through asset optimization, an Anglo American Case study
In this case study Anglo American, a mining company which has a vision of becoming the investment partner and employer of choice in the mining industry, one of its strategy to achieve that ambition is asset optimization and by executing its strategy has been able to achieve on its stated target of saving $1 billion from core operations by 2011 (Anglo American, n.d.). This strategy was executed using the school of planning and resource based view theoretical approaches, in order to achieve their ambition and decided a target of $ 1 Billion from their operations (planning), they decided to optimize their assets. A important feature of development within the asset optimization program was its design, piloting and introduction into Anglo American's day-to-day business in order for this strategy to be executed a formalized internal process called Operation reviewers, this team was full consist of Anglo American's internal resources, initially they reviewed their operations, Anglo American consistently review their process to make sure that the process is efficient as possible, the operations reviewers apply a structured evaluation process in three functional areas which are operational improvement , technical assessment , safety and sustainable development assessment they combined their central technical capacity with the operational expertise to create a team and focused on delivering value from operational improvement (Anglo American, n.d.). Anglo American's optimization process sets out a clear view of how operational improvement can be planned for. There are five phases, starting with recognizing an opportunity (investigate numerous ways to lower the mine's carbon footprint) followed by the idea stage (found out that a mobile flare design would solve the problem) followed by the initiative stage (a detailed plan were created by technical expert from Anglo American) and finishing with putting an improvement into practice (Anglo American, n.d.). Anglo American has effectively used the school of planning and resource based view by effectively planning the asset optimization using their resources and as a result has gained sustainable benefits worth billion of pounds. (Anglo American, n.d.)
Case Study #3
Delivering a business strategy, a TNT case study
In this case study, TNT, a business to business express delivery service and how the organization is delivering a business strategy using school of positioning and resource based view .In the case study TNT has identified that their organization has a distinctive position and that their market position is based on differentiating itself from rival through their intangible resources (resource based view) (TNT, n.d.), TNT has developed a strategy map that puts the customer on the top at their highest priority of the business (TNT, n.d.). The organization wants everyone involved with the business informed on how the organization will be able to achieve its goals (TNT, n.d.).The TNT case study of "Delivering a business strategy' shows that Operational Excellence is achieved through a strong foundation of fast, reliable and quality services (TNT, n.d.). From there, by understanding what different customers expect, the organization is able to improve the customer relationship and experience (TNT, n.d.). By building a stronger customer relationship the organization is able to build a higher level of loyalty and commitment. The organization views the innovation process is about identifying the future needs of the organization's customers and by establishing a stronger relationship the business is able to develop a joint approach and shared vision (TNT, n.d.). This strategy map involves quality employees in order to meet their aims and effectively carry out the strategy. In the case study, TNT have stated their mission to surpass customers' expectations and experience in the transfer of their goods and documents all around the world and by delivering value to the organization's customers by providing the most reliable and efficient solutions through their delivery networks and seek to lead the industry by instilling pride in their people and at the same time creating value for our stakeholders and be socially responsible around the world (TNT, n.d.). In order to achieve their aim TNT's biggest resource is their employees from various departments such as distribution, sales and marketing, finance, customer service and HR. .To ensure employees standards keep on growing, TNT emphasizes on development of employees (TNT, n.d.). By developing the organization's biggest resource, people, the organization ensures that it will have the capability to meet and implement quickly any necessary changes in the organization's strategy (TNT, n.d.).The organization also nurture new employees fresh from the market by offering a in house a five year apprenticeship program for people under 22 years old (TNT, n.d.) .TNT has successfully have used the positioning school and resource based view and successfully have a crafted an effective strategy.
A competitive advantage gives organization-enhanced capabilities for developing and delivering strategic value. Companies should have several competitive advantages, difficult to copy or duplicate, and sustainable over the long-term (Williams, 2007). The three companies above from the three case studies above has clearly have illustration combining school of taught to achieve their mission and vision.