Page 25 - Strategic Management
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Strategic Management 4 School of Strategy
Example: used in mature, stable markets and industries, public sector.
4.3 The ‘positional’ school
• The focus is also on a rational, analytical approach of making strategy
• attempts to place the organisation and its products in a favourable market or environment.
• It is heavily based on performance measurement and decision making tools.
• Porter (1985) competitive advantage factors discussed in detail in other sections
• Boston Consulting Group Matrix - BCG - of four cells - cash cows, stars dogs and problem children, based
on income from market share and on potential market growth
• GE Matrix a large three-dimensional matrix extending the BCG which is only two-dimensional
High
Cash Star
cow
Market
share
Problem
Dog
child
Low
Low High
Market growth
Fig 4.2 The BCG Matrix
4.4 The ‘resource based’ school
Robert Grant 1998,
• This looks to the internal environent instead of the market, and
• incorporates the ‘core competence’ approach of Prahalad and Hamel, 1994
• Based on an ‘inside-out’ approach suggesting that the competitive advantage of an organisation is based on
its own distinctive resources, capabilities and competences.
• Danger of ignoring the external environment.
• However Grant and others do not consider culture and HRM.
4.5 Key points
These schools are not important in individual analysis but in theoretical essays and assignments
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