The School Of Strategies Business Essay

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Strategies are one of the most important fundamental of an organisation in order to achieving their goal and objectives. According to Mintzberg H Quin B (1997, p39) "Strategy is the pattem plan that integrates an organisational goal, policies and action sequences as a whole." Therefore, managers or the top level of an organisation need to be very careful when

selecting the strategy for them to implement in the market, to survive and to win their


In this assignment, the school of strategies which include planning school, culture school and

positioning school of Minztberg will be analysed to show these strategies were put into action

to help organisation be more participating in the global market. This assignment also

illustrates some intemational theories which are Porter's diamond, tive forces, generic

strategies and product life cycle of an organisation by analysing Tesco Plc ' case.

2. School of Strategies overview

It is undeniable that strategic development is the key factor for the survival and success of

every business. Obviously, each organisation should have suitable strategies and adapt it to

the circumstances that arise in a competitive market. Turner (2003) stated that "in an attempt

to guide those whose job it is to put strategy into practice, Henry Mintzberg, el at (1998)

described the process of a 'strategy safari' and has identified ten schools of thought in respect

of strategy development. These schools have varied in popularity overtime". The ten different

schools were divided into the groups of prescriptive, descriptive and synthesis. The difference

point between the prescriptive schools and the descriptive ones is that the former focus on

strategy formulation while the latter emphasize strategy development. The three prescriptive

schools are considered the efficiency and stability foundations which create directions as well

as objectives for the development of organisations. According to Stacey (2007), the tln'ee

prescriptive schools are "the design school, the planning school, the positioning school

.These three schools become both fundamental and preconditioned elements of strategic

development for each organisation.

Added to these schools, the different descriptive schools which are entrepreneurial school, the

cognitive school, the learning school, the power school, the cultural school and the

environmental school give deep insights in strategy formulation. All strategy perspectives

recognize the relevance of entrepreneurship. The last group is synthesis that consists of the

configuration school, "which integrates the views of all the other schools in terms of

configurations or in term of transformations" (Stacey, 2007). This school represents an

attempt at integration which definitively recognizes the complexity of strategy.

This assigmnent will take three schools which are the plamiing school, the culture school and

the positioning school to analysis and apply to Tesco to show these models work and how an

organisation apply these models to achieve their aims, objectives and be successful in global


2.1. The Planning School

2.1.1. Definition

The planning school is a member ofthe prescriptive school which is generally more concern

with how the strategy should be formulated rather than how they should be comprised. This

model deals with issues such as budgeting, scheduling and programming. Every business

needs to have plan for them in order to growth and development, thus this model can be

applied in many firms such as Tesco to help them be the global organisation.

2.1.2. Discussion

Tesco was fotmd 1924 by Jack Cohen. Over many years, nowadays, Tesco become one of the

largest retailers in all over the world. ( How they become successful

like they are now? They need to have a good plan which is base on forecasting how the

economic is going to be, what they want to be, what will be the market and so on. The answer

for these questions should be the planning school.

Ftuthermore, the planning school looks back the Ansoff Model which Tesco used to analyse

their market and products. They want to be globalisation therefore they open Tesco in many

countries of the world where they launch their products to develop new markets. For

example, Tesco opened stores in Japan where people want to buy fresh food everyday ,

therefore, the existing hyper market formats do not meet the needs of local customer. Tesco

also has invested big sum of money on product development. In following Ansoff marketing

strategies, Tesco is seeking to increase number of customer and number of sales.

This school also looks closely at the SWOT model, the internal strength weakness as well as

the external opportunities and threat as mention in Marko Makipaa (2004). Tesco applied

SWOT model which can tell them their strength such as branch name, national store network

to develop and win their competitors. It also shows them their weakness such as lack of

global scale or threat of takeover to help them find the way to tix it and to change it in near

ihture. They realised the extemal opportunities of Tesco can be overseas developing market

in Eastern Europe and Asia and financial service which might be a good opporttmity to focus

on and to become more and more participate in global market. Besides that, the threat of

Tesco is the entry of Walt Mart, the developing of local Sainsbury, etc.

So by using the planning school which relates to Ansolf Model and SWOT analysis, an

organisation will know the possibilities , plan for their new product and market , manage their

budgeting, schedule, programme, select the best choices and techniques to fit their aim and

objectives. This model also priorities its strategies by hierarchy. The long- term strategies is

the ones, which are at highest order, followed by the medium and then by short-term plan.

2.1.3. Limitation _

However, when implementing this model, firm might be faced by some challenges as this

model contains some problem which can affect organisation. Firstly, planners may focus too

much on generating newer strategic concepts, therefore placing the current objectives at sub

standard level, diverting the attention from the original purpose leading to fallacies. Risk is

major issue in this model as people who implement these concepts may decide to try and

compete against rival competitors and hence generate new strategies, which could be very

risky as in Sadler P(2003). Secondly, planning school is all out forecast and predicting future

based on some strategies and current trend of economy, however, it will be very diflicult and

risky to make the decision and implement it before. Basing strategy and decision on

assumption and uncertainties could due to the diverting the organisation' original strategy and

also neglect the organisations requirement of strategy.

2.2. The Culture school

2.2.1. Definition

The cultural school is one of subclasses of descriptive schools. This school sees strategy

formation as a collective process. "The approach of this school tries to involve the various

groups and departments within the company: strategy formation is viewed as a fimdamentally

collective and cooperative process. The strategy that is developed is a reflection of the

corporate culttue of the organisation". ( This model focuses on

the essential role the social processes, beliefs and values are playing in decision making and

in strategy formation. ln addition to this, it not only explains resistance to strategic change

but helps to deal with predominant values in organisations or in regions as well.

2.2.2. Discussion T

The culture of Tesco plays a vital part in the company; this is Very much concerned about the

way in which people in the organisation interact with each other. If people did not interact

well with each other, this could be bad for decision making; this could also lead to poor

decision being made. Tesco have a positive culture. The type of culture of Tesco is a

customer driven culture. Customer driven culture is everywhere in the business and makes a

real effort to improve customer service, market research, employing right people, and

training. The business is trying to update the teclmology e- commerce. It also has a positive

culture where staff and workers communicate well. They also regard change as opportunity

than not a treat. Moreover, the culture of Tesco is seen as a dynamic one. This is proved in

the way a business is looking to change how they work better, and always looking for new

ideas to appeal more customers.

2.2.3. Limitation

A shared commitment to beliefs encotuages consistency in an organisation's behaviour, and

therefore by discourages changes in strategy. It is culture that deeply held beliefs and tacit

asstunptions that act as powerful internal barriers to fimdamental change. Also, the vague of

this model is main reason leading to resistance to change. It can be missed to justify the status-quo. Therefore, each organisation's attention has also been directed at how to

overcome the strategy limitation of organisational culture.

2.3. The Positioning School

2.3.1. Definition

The Positioning school is where the organisation can develop its strategic position within the

industry. In other words positioning is oneself in competitive strategy. This model sees

strategy structure as an analytical development. Porter (1980) was the founder of the

positioning school; he focused on the constitution of industries and their effect on strategies.

The positioning approach looks at the company's situation in the economic market lay whose

goal is to distinguish the organisation from others within the equivalent field. (Steward C, el

at ,2005)

2.3.2. Discussion

This model has been applied in many firms such as Tesco to help them to positioning itself in

the market so that they will situate out among the rest, and how to attain high revenue than

other firms through market position. Tesco use Porter's five force analysis to understand the

competition. Porter's Five Forces Model implies that business are being influenced by five

forces that is supplier power, threat of substitutes, buyer power, barriers to entry and rivalry.

This model also implies that business necessity be able to be aware of the industry

circumstance in which they operate.

For TESCO, their main competitor is ASDA. The competition is firm between the two food

retail companies as healthy as with others like Sainsbury. ASDA is owned by Wal-Mart

which is the leading grocery succession in the United States. They are notorious for low

priced items. This is one of the reasons why people tend to go to their stores for their

shopping needs. When they expanded in the United Kingdom, they brought by way of them

their cost leadership strategy. This resulted to the similar success that they have in the United

States. However, TESCO was competent to prevent ASDA last year. How Tesco conquer

ASDA using Porter strategy is explained as follows

According to Porter (1985), a business position is based on its strength and strength is

classified into two - cost advantage and differentiation. When these strengths are applied, it

wills consequence to three generic strategies - focus, differentiation and cost leadership

strategy. Out of these three generic strategies, cost leadership strategy plays a significant task

in the accomplishment of TESCO's competitive benefit over ASDA. Cost leadership strategy

means that the business is the low cost manufacturer or supplier of a definite quality item in a

specified industry.

2.3.3. Limitation

When looking at the positioning school, manager or an organisation must aware of some

limitation and taking into concern regarding it. Firstly, the top level in hierarchy of an

organisation will be the one who fonnulate the strategies whilst implementation will be done