Wednesday, March 29, 2017

The formation of strategies

The formation of strategies

For this week, I choose the article named: “Your strategy needs a strategy” (Martin Reeves, Claire Love, and Philipp Timmanns) to my first reading material of Strategy Development course. I remember last year, I played a business strategies competition game in Hyundai company and this is the first time I realize how the strategies playing a powerful role and showing infinite potential effects within a business case. For our daily life, strategies are everywhere. When we buy a coffee in Starbucks or eat food in MacDonald, the companies carefully marshal their own brand culture and set a unique supply chain from raw materials, transportation systems, distribution flow, testing processes to finished goods to maximise the efficiency. When we use social media such as Instagram or Facebook, the business strategies always play a big role in the operation process. By creating inspiration news and make a sense of immediacy, these new media attract massive users and its market is continuing to grow. In 2015, it was the fastest growing social network, and it shows no signs of slowing down, with 2016 growths estimated at 15% (and another 11% in 2017). [1] Thus, strategy will become more and more important with the development of enterprises and will change a lot with predictable and operable ways.
This paper gives two very critical factors: predictability and malleability and put them into a matrix which divided into four parts labelled with classical, adaptive, shaping and visionary. This matrix gives a clear structure of how to identify a right strategic style for different environments. This matrix is the key takeaway for my blog.
The Classical circumstance happened when the environment is predictable but you can not change it such as Oil & Gas industry and Automobile companies. It named with classical because it fixes the one everyone learned in business school and the strategy is set a logical goal, hit the market position and enhance it by executing sequential planning, use the analytical and statistical method to predict the future market. Compared with classical, adaptive environment is unpredictable because the market demand and operation feedback loops change a lot. Thus, in this kind of environment, strategies must be updated with the market and long-term plans are useless. From my perspective, computer hardware industries need to adapt a flexible strategy by subtly capturing market changes and reduce the time lag of internal reaction time to fit new environment perfectly. Additionally, no matter whether companies can predict the future market or not and the industrial fragments are not monopolized by a few incumbents, we can call these shaping and visionary. In the end, the writers emphasise that a company needs to apply more than one strategy to fit different parts of the company even managers should change strategy style within the different stage of operation lifecycle. Personally, I think the actual operation environment is much more complex than these four categories. This article doesn’t talk about how we can coordinate these four situations within one company.
Above all, executives should identify the environment for each part and sections within their company by its functions and market type. Multi-strategies and rapid response mechanisms to adapt volatile environment is the future trends.

Reference:1.            "Instagram Marketing Strategy for 2016." ShortStack. N.p., 25 Jan. 2016. Web. 28 Mar. 2017.

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