PRESCRIPTIVE AND DYNAMIC APPROACHES

Prescriptive and Dynamic Approaches

Prescriptive and Dynamic Approaches

Introduction

The phenomenon of strategic management and its allied concepts, such as crafting corporate strategy help in determining the overall scope and purpose of an organization. From a modern-day outlook, it involves developing long-term objectives and goals that will magnify the overall value of the business and deal with the uncertainties that a business face both in the short, as well as long term. As a practice, it includes making strategies for efficient and effective allocation of resources that, in turn, helps in attaining the overall goal of the organization. The two most widely used, and recognized theories for developing corporate strategies are emergent and perspective approaches to strategy development, both the approaches must be observed within the framework of highly dynamic, increasingly competitive and sensitive global environment. There are some influential external factors that force the organization to alter their processes, craft strategies to reduce cost and specify emerging opportunities for growth. Some businesses make strategic improvements just to gain competitive advantage others merely adapt strategic practices to survive. This brings us to the significance of identifying how efficiently and effectively the emergent and perspective approaches can fulfill the demand of today's contemporary framework when devising corporate strategy. In the next section, we will conduct a comprehensive, critical analysis of emergent and perspective approaches using examples based in organizations where these can add value to our analysis and justifying our arguments by referring to appropriate theory.

Discussion & AnalysisPerspective Approach

The perspective approach to strategic development is referred as deterministic and systemized approach where comprehensive analysis of the organization, its external environment and performance leads to the development of long-term, coherent plan. The top management is usually responsible for formulating the final mission and objectives, once the objective is formulated, appropriate action plans are executed across various layers of organization. Tactics and techniques that are being used in this approach contains Porter's Five Forces model for rigorous examination of the value chain and industry analysis which enlightens existing capabilities as a substantial basis for a competitive edge. It is commonly seen that organizations in competitive and fast paced environments that utilize a systematic process most often lead the market in which they operate. Further techniques that are being used in prescriptive approach include BCG growth/ share matrix and porter's value chain.BCG matrix (Boston consulting group)

The BCG matrix is a tool used by many marketers as the Ansoff matrix. It allows planning for your portfolio. This matrix is constructed from two axes of analysis: the relative market share (compared to competition) and market growth. Each range of products is taken individually and is placed on the matrix. One can then weaves competitive products and give them a reasonable market share. The four quadrant of the BCG matrix include Question mark, Stars, Cash cows, and Dogs.

Question mark (dilemmas) produced small but rapidly growing market share. They are highly competitive and generate modest profit. However, they could be improved if investments are made. Their disappearance or their maintenance must be questioned.

Stars (stars) are fast-growing products with high market share. The strategy is boosted with appropriate investment to follow the growth of their market and to remain in a strong ...