Problems with strategy

Difficulties of strategic decision-making and implementation

Strategic decision making implies a choice that will have an impact on the business for many years to come. It cannot be easily revearsed. After many years of dithering Morisons responded to the growth in high-street and mini stores and opened their own. They went on to open 150 stores being opened by the end of 2014. in 2015 the enw boss announced that up to 30% of the stores were unprofitable. Many of the stores went on to be closed and Morisons made huge losses. 

So was the Morrisons problem a failure of strategic decision making or just the implementation of strategy. We can see that as only 23/150 stores were closed then mabye the implementation was the problem (such as the location of stores). But going from 1 store in 2013 to 150 within two years was surley too ambititous.

Planned vs Emergent strategy

IBoardrooms in the 1980's and 1990's were dominated by Porters ideas on strategy and competative advantage. Exemplified most clearly by his 5 forces and generic strategys. Porter siad that strategy is owned by business leaders. In other words it is consciously planned by the directors, who then expect the managers to implement the strategy that was laid out. 

As Microsoft found out with the faultering launch of the xbox one,life is not so simple. Their strategy had been to make the Xbox One the entertainment hub for the family. This meant the product was over equiped and overpriced. It took the business a whole year to simplify the product and cut the price. Then sales improved dramatically. The point is that a planned approach to strategy may overstate the control a business has over the market it operates in.

In contrast with Porters approach we have Mintzbergs strategies. He always emphasised the needs to strategies to be flexible and to adapt to changing circumstances. This is emergent strategy. That is, it emerges from the circumstances rather than being controlled and rigid. It is likely that there is a plan from the outset, but Mintzberg emphasises that strategy…