Topic 2: Approaches to Business Strategy

In the previous topic, we discussed the different levels of business strategy, the elements of a strategic framework, and the strategy development processes. Now, we will delve deeper into the approaches to business strategy.

Approaches to business strategy refer to the different ways in which organisations can formulate and implement their strategies to achieve their objectives. These approaches provide a roadmap for organisations to navigate the complex and dynamic business environment.

1. Prescriptive Approaches

Prescriptive approaches to business strategy focus on providing a clear and structured framework for organisations to follow. These approaches are based on the assumption that there is a “best” strategy that can be identified and implemented to achieve success.

One popular prescriptive approach is the Porter’s Generic Strategies framework, which suggests that organisations can gain a competitive advantage by either pursuing a cost leadership strategy, differentiation strategy, or focus strategy.

2. Descriptive Approaches

Descriptive approaches to business strategy focus on understanding and analysing the strategies that organisations have actually implemented in practice. These approaches aim to provide insights into the real-world complexities of strategy formulation and implementation.

One example of a descriptive approach is the case study method, where real-life business cases are analysed to understand the strategies adopted by successful organisations. This approach helps students gain practical knowledge and learn from real-world examples.

3. Emergent Approaches

Emergent approaches to business strategy emphasize the importance of adaptability and flexibility in a rapidly changing business environment. These approaches recognize that strategies may need to evolve and emerge over time based on environmental changes and organisational learning.

An example of an emergent approach is the scenario planning technique, where organisations develop multiple scenarios and strategies to address different possible future scenarios. This approach helps organisations prepare for uncertainties and make informed decisions.

4. Combination Approaches

Combination approaches to business strategy acknowledge that a single approach may not be sufficient to address the complexities of the business environment. These approaches advocate for a combination of prescriptive, descriptive, and emergent strategies to achieve organisational goals.

One example of a combination approach is the balanced scorecard framework, which integrates financial and non-financial performance measures to evaluate the overall strategic performance of an organisation. This approach considers both internal and external factors to provide a holistic view of the organisation’s strategy.

In conclusion, approaches to business strategy play a crucial role in helping organisations navigate the challenges and uncertainties of the business environment. By understanding and applying these approaches, students can develop a comprehensive understanding of how organisations formulate and implement their strategies to achieve success.