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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