Historical Development Of Strategies In Businesses Commerce Essay

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Different definitions of Strategy have been developed from a past history. Basically strategy deals with making major decision which affects the long term direction of the business Ensor et al (2008). Strategy can be obtained by observing the environment and its effect on the organization behavior. According to Grant (1995) corporate strategy deals with the ways in which a corporation manages a set of business together. Johnson and Scholes (1999) cited strategy as an organizational scope and direction for the long term period, organization must utilize their resources properly to meet the proper need of markets and to fulfill stakeholder expectations Johnson and Scholes (1999). While Porter (1990) states Strategy as a frame work which stands organization unique in the market. According to him strategies involves different aspects such as firm decision and fitting of activities into the organization structure.

Strategy and a corporate/strategy plan are two different terms. The general concepts of future competitive advantage can be defined by strategy, whereas the terms such as selection, resources, sequence, timing and certain objects which are required to achieve the strategy can be defined by corporate/strategy plan. Ensor et al (2008).

This figure summarizes the difference between the Strategy and corporate/strategy plan. The basics of strategy cited in Ensor et al (2008), p.5


Major decision

Long-term direction

Business Definition


Environment analysis

Integration of activity




Core Competences

Competitive advantage


Resource implication


Of approach

Corporate/Strategy plan(s)



Strategy is a word which means being different and making different choices, it means different things to different people and companies. Strategic management typically deals with difference between business strategy and corporate strategy. It is proved from past history that profitability differences between firms totally depend on industry, business and corporate factors. According to Rumelt (1991) this factors in the field of strategy especially effects to individual businesses by giving a large portion of profitability followed by smaller industry effects. Hoskisson, Hill and Kim (1993) supported theory of Rumelt. According to resource based view in strategy Barney (1991) stated that to determine competitive advantage within market business level resources are as important as industry level factor. According to Porter (1990) without a strategy an organization can flounder without direction, wasting time, energy, and resources. Porter (1980) devised a five force model which describes that environmental condition which favors organization performances and process to achieve the objective. His five force model also helps for suggesting the threats and opportunities in an organization. Prahlad and Hamel (1990) supported this concept later; they mentioned the importance of core competence in the new business development and stated that "A core competences is something that you do better than anyone else." According to Johnson et al (2008) there are three levels in strategy and they are different from each others. According to Simon (1993a) strategy is part of the study of decision making about external, internal and historical issues. It involves external decisions because it is about the 'big decisions' facing organizations.


A strategy depends upon the environment of an organization and organization involved eight main types of strategy at any time:

A good and successful growth strategy states that resources is the most important factor which support growth of an organization to stand out in a global market rather than competing in the market.

Consolidation strategy plays an important role for any organization. A proper stability must be there in an organization before a period of growth, organization must follow proper system and clear procedures during the period of stability before moving on.

Seeking profit for any organization is one of the most important strategies which termed as Profitability and shareholders have considerable influence over it.

Efficiency is an important Strategy for public sector service organization where taxpayers fund must be properly use. Efficiency is totally depends on how the organization use its resources. For efficiency organization must use its resources in proper way to achieve the objective.

Market leadership strategy is all about being number one amongst all other in the market. Organization must be able to gain considerable cost advantages over rivals and to become a leader in the market.

Survival is an essential business strategy for any organization. By surviving organization is able to develop other strategies, hence Survival plays as a key to most organization in a highly competitive business world.

Globalization is the most important strategy which gives expansion and international exposure for an organization. Globalization involves different concepts such as manufacturing, distribution/sales, import, and export of products globally.

Merger and Acquisition strategy plays an important role in an organization. Some organization adopts integration which is a process of joining together with another part of production process which results to get synergy and leverage off the cost base. Merger and acquisition, enables business of an organization to get benefit from the advantages of integration. http://www.thetimes100.co.uk/theory/theory--devising-implementing-strategy--383.php (Accessed:15/12/2009)

Growth and Choice of strategy affects organization crucially. According to Kourdi, Jeremy (2003) growth of a strategy it is very important to increase awareness of the need for cost control, and growth of a strategy will affect corporate culture of an organization. While according to Morden (2007) strategy choice depends upon the organizations capability, capacity to generate customer value, and resources to gain competitive advantage.

Let us discuss an example of brand NIVEA FOR MEN to show the importance of strategy in an organization:

The history says NIVEA FOR MEN brand was launched in UK in 1998. From the period of 1998 sales of male skin care products have been steadily increased and the market in 2008 was over than £117 million with £49 million facial products. The objective states to increase market share through qualitative growth. To obtain this objective organization implemented marketing strategy and promotion have been done by distributing free samples in the market which results in the brand awareness and consumer familiarity of the products amongst the public. Results shows that, NIVEA FOR MEN was the best skincare range winner in the FHM grooming award 2008 for the fifth running year and got an excellent image in the global market as compared to other brand.

http://www.thetimes100.co.uk/case-study--developing-marketing-plan--87-346-6.php (Accessed: 16/12/2009)


After discussing and analyzing all concepts about corporate strategy it can be said that corporate strategy does really matters in the organizations, but as there is a revolutionary changes occurred in history of corporate strategy and hence there is a scope of further research which can be done in the field of corporate strategy and thus results which are derived can be incorporated in the future studies.


Barney JB. 1991. Firm resources and sustained competitive advantage. Journal of Management 17: 99-120

Ensor et al .2008, Strategic Marketing Planning and Control, 3rd edn, Oxford, Butterworth-Heinemann

Grant, R.M (1995) Contemporary Strategy Analysis, 2nd edition, Basil Blackwell: Oxford

Hoskission RE, Hill CWL, Kim H. 1993. The multidivisional structure: organizational fossil or source of value? Journal of Management 19: 269-298

Johnson, G and Scholes, K (1999) Exploring Corporate Strategy: Text and cause (5th edn). Harlow: Person Education.

Kourdi, Jeremy (2003) Business Strategy: A Guide to Effective Decision Making(Internet).London: Profile books ltd. Available From: http://site.ebrary.com/lib/nclcol/docDetail.action?docID=10210694&p00=business%20strategy.(Accesed:16/12/2009)

Morden (2007) Principals of Strategic Management (Internet). Hampshire: Ashgate Publishing Limited. Available From: http://lib.myilibrary.com/Browse/open.asp?ID=109887. (Accessed: 16/12/2009)

Porter, M (1980) what is Strategy? Harvard Business Review, USA

Porter, M (1990) Why are firms successful? Paper presented at the Fundamental Issues in Strategy Conference, Napa, CA

Prahalad, C.K, Hamel, G (1990) The core competences of the corporation. Harvard Business Review 68(3): 79-91

Quinn, J.B (1980) Strategies for Change: Logical Incrementalism. Homewood, IL: Irwin. Available from


(Accessed: 15/12/2009)

Rumelt RR. 1991. How much does industry matter? Strategic Management Journal 12(3): 167-185.

Simon HA. 1993a. Strategy and organizational evolution. Strategic Management Journal 14: 131-142

Times 100 website (Accessed: 15/12/2009) link:


Times 100 website (Accessed: 16/12/2009) link: http://www.thetimes100.co.uk/case-study--developing-marketing-plan--87-346-6.php