Page 25 - Strategic Management

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

Download free ebooks at bookboon.com

25