The report defines the concept of strategy and strategic management offered by different authors with applied examples on M&S case studies. Some definitions offer fragments of the whole concept and the purpose of this paper is to critically analyze and form a complex and detailed understanding of what is strategy and strategic management. The first part of the report is about strategy and aims to apply the mission and vision statements, strategic choices theory and the value preposition theory to the M&S case study.
The second part refers to the strategic management or the process of strategy (Mintzberg and Lampel: 1999) , presenting different perspectives and angles as well as the M&S case study analyzed regarding the formulating, implementing and evaluating the decisions, the flexibility and the competitive advantage. Because the M&S case study offers an illustration of unsuccessful strategy, the examples in the report applied to the theory show what concepts were neglected or applied in an ineffective way and the consequences represented by ineffectiveness.
Introduction Strategy and Strategic management are two different but related concepts (Eden, Ackerman: 1998) which are defined in different or similar ways, depending on different authors and used differently depending on the organizations. The two complex concepts (Johnson, Whittington, and Scholes: 2008) are explained from different angles and perspectives (Lynch: 2009). Something that is common regarding strategy and strategic management is the fact that they are the means that lead to an organization success or failure (Hooley, Piercy, Nicoulaud: 2008).
Different perspectives on Marketing Strategy According to Chandler(1962) the concept of strategy is described as being “the determination “ (Chandler: 1962, p.17) of a long time process that has as a purpose the achievement of an organizations’ goals including the distribution of the resources for making it successful. Other authors offer a division of strategy. Depending on the context and on each organization the marketing strategies can be divided into formal, decisions being taken from top to down (Varadarajan and Clark 1994) as in M&S case study( Collier:2004), either emergent or improvisational (Moorman and Miner 1998). Analyzing the strategy concept from the angle of Andrews (1971) it also has the purpose of defining in what business the company is in as well as what kind of company it is. In order to make this aspect clear the strategy statements have their role.
Strategy statements: Mission and vision At the base of the strategy stay the mission and vision statements that define the direction of the company (Blythe: 2003) and refer to the goals that the company want to achieve (Johnson, Whittington, Scholes: 2011). The mission strategy helps the managers to concentrate on what is essential in terms of strategy (Kaplan, Norton:2004). An example of failure in knowing the business in which the brand was in and the inability of adapting to the changes that took place along time is the M&S example that lost what is central in their strategy.
Also the vision statement for M&S was difficult to be put into practice because the brand was left behind due to the market changes and their vision was to reinforce the old established traditions that were no longer effective in a new changed marketplace (Collier:2004) Also another example that M&S was not clear regarding the mission statement was the fact that was respecting none of the 5 characteristics of vision offered by Blythe(2003), some of them being the inability to differentiate from the competitors that were offering same goods at lower prices and a the lack of excitement and inspiration as well.
Strategic choices Porter (1996) sees strategy from different angle, more exactly that: “Strategy is not about doing things better –this is the concern of operational effectiveness” (Grant: 2008, p.19), as well he describes strategy as “making choices” (Grant: 2008, p.19) and the strategic choices should answer to the questions” Where to compete?” and “How to compete?” answers that divide and delimit corporate and business strategy (Morgan: 2011).
Jain (1999) sustains the same perspective on strategy and sees essential in the foundation of a strategy the first two questions sustained by Porter (1996) in Grant (2008), Jain completing with the 3rd question: “When to compete?” (Jain: 1999, p.24, Green: 1995, Lieberman and Montgomery:1998). Jain (2009) formulates the three questions on the concept of the three C`s :customer, corporation and competition.
In order to create a successful strategy the customer needs should positively meet the corporation needs and must be better than the competitors`. In the M&S case study (Collier:2004) the organization was not familiar with the customer needs, misreading the target market and ignoring the changings that lead to being over topped by competitors represented by niche organizations that kept updated to the change in customer needs.
Value preposition According to Slater and Nerver (1995) the value preposition is another aspect on strategy. The positive context is when the product/services value conveyed by the organization is perceived in the same way by customers. Kaplan and Norton (2004) describe on the other side the value preposition and its clarity as being the:” single most important dimension of the strategy” (2004: p. 10) In the case of M&S the products were not meeting the customer needs because the brand was product focused lacking massively the customer approach. Different perspectives on Strategic Management.
The process of strategy In Lynch (2009) view the strategic management is represented by identifying and achieving the purpose of a company. Strategic management is also the strategy in process (Mintzberg and Lampel: 1999). David (1995) has a different angle on the concept more exactly that it is about “formulating, implementing and evaluating cross-functional decisions” (1995:p.4) in order to achieve the objective.
In terms of formulating the decisions for M&S case study, the company used an ineffective and wrong strategy based on the misanalysing of customer needs, offering something that they were not attracted anymore. In terms of implementing and evaluating decisions, many inappropriate and ineffective decisions were taken by M&S like not focusing on long term, but on day to day aspects, excess of stock that lead to many discounted items and in the end to loss of profit, also ignoring the customers preferences, expansions initiatives in Europe where were not positive opportunities, lack of improvement that lead to closing stores (Collier: 2004).
Flexibility Other authors, Doyle and Stern (2006) explain some perspective of strategic management that help leading to success if they are taken into consideration like the flexibility of a company, as example M&S was lacking of flexibility of the environment and lacked of faster response for the market change. Competitive advantage According to Grant (2008) and Johnson, Whittington, Scholes (2011) an aspect of strategy and strategic management is the competitive advantage. Hill and Jones (2008) add more to the concept by explaining that in order for a company to have a sustained competitive advantage should use a strategy that offers an over average profit for a number of years.
On the other hand according to Porter (1985) should differentiate by offering something unique and that cannot be duplicated (Barney: 1991) except a low price in order to enable the company to ask for a “premium price” (Porter: 1985, p.120). Applying to M&S case when the company was successful, the competitive advantage was the fact that they had a good and reliable relationship with the suppliers who assured high standards and simple pricing policy, proved by their massive success regarding profit and market share (Collier: 2004). The sustained competitive advantage was represented by the family nature of the firm, offering a feeling of “camaraderie” and “close-knit family atmosphere” (Collier: 2004) in every store offered by staff and managers who fit in the picture, being owned at that time only by family members.
Summary conclusion To conclude, the strategy and strategic management are effective concepts when used effectively and each company uses them in different combinations and concentrates on different aspects. Some of the key points of a successful strategy are the relationship to the customers, having a clear idea of what the mission and vision statements are, focusing on flexibility to different environmental changes and creating a competitive advantage. Also is essential the way the strategy is implemented, to have a long term direction as well the use of resources effectively and with competence.
Andrews, K .R. (1971). The Concept of Corporate Strategy. Illinois: Richard D. Irwin, Homewood.
Barney, J.. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management. 17 (1), 99-120.
Blythe, J. (2003). Marketing Strategy . Berkshire: McGraw-Hill Education.
Collier, N. (2004). Case Study: Marks and Spencer. Cranfield School of Management.