Competitive strategy: Strategies model by Michael Porter

Résumé du document

The strategy has taken a big place in the firm and it has become the only way to do business. Big companies have special staff to formulate strategies, whereas in the smaller firms it is the CEO and/or the Head Officer who takes and makes the strategic decisions. Some definitions are necessary to understand the complexity of the strategy. The strategic management is defined as "the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives" (David, 1998). According F.R. David, the strategic management includes 3 different stages: the strategy formulation, the strategy implementation and the strategy evaluation. In addition, there exists a Strategic Management Model to guide the managers through their task. Conceptual models are most commonly used in strategic management. But what is the role of these models in strategic management? How do models contribute to decision-making? In the first part, we will try to answer these questions.

Extraits

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[...] A decision-making process can be decomposed in 6 different stages according to Harrison as following: setting managerial objectives, searching for alternatives, comparing and evaluating alternatives, the act of choice, implementing the decision and follow-up and control. In the three first steps the executive managers needs to analyse several criteria about his firm. For the first step the manager has to set some objectives or update old objectives to reach his goals. For the second step, the executive has to look for alternatives. Thus he should study firm's environment. [...]

[...] An error of strategy can lead to a ruin of the company. Apply a model in the process of strategic management is a mean to avoid mistakes and decrease the risks. If we take the three different stages of strategic management, the first one is the strategy formulation. In the strategy formulation the head office has to develop a business mission, often thanks to the research of competitive advantages already present in the firm, then it has to identify not only the external opportunities and threats of the company but also its strengths and weaknesses; for that it may use the SWOT analysis as a model to help in its analysis. [...]

[...] Other risk is the buyers don't care a lot about the difference brand to brand of this type of product (David, F.R. 1998). So the firm needs to really know who are its consumers and buyers. What they want? What is the main goal of this buying? Whereas Porter argues the focus on the cost leadership strategy can often lead to a lack of marketing and product innovation because the company wants to reduce its costs in each stages of product and so invest less in its support structures. [...]

[...] It exists several competitive strategy models such as Porter's Five Forces, Ansoff's Growth matric or Porter's Generic Strategies model. In this paper we will take the example of one model of competitive strategy with Porter's view: generic strategies model” and we will study its strengths and weaknesses and also see the different feedbacks of this model The strategic models' uses in strategic management A strategic model is, according to Cambridge Advanced Learner's Dictionary, a model of detailed plan for achieving success”. [...]