Business Strategy and Policy | The Schools of Strategy

Strategic planning can be thought of as an organized business model that grows along with demand and supply. It is a broad topic that includes management setting goals, analyzing the competitive market, analyzing internal organization and evaluating stratagems for the purpose of improvement, progression and the maximization of the resources available. While all attempt to reach a strategic goal, there needs to a deliberate choice amongst them if the company wishes to optimize their efforts. 

The planning school of strategy is highly objective, highly structured, and inflexible. Strategies result from a controlled, conscious process of formal planning, deconstructed into deliberate steps, each outlined by checklists and checkpoints. Execution of this strategy is ensured through deliberate controlled mechanisms, such as balanced scorecards, to keep track of individual processes. This strategy has more of a focus on stability and structure, as scenario planning is frequently used as a means of accounting for the unpredictability of future events within the plans. Microsoft is a company with a stable foothold in the operating system market that go through multitudes of plans and countless revisions to perfect their products.

The positioning school focuses more so on the strategic element rather than planning aspect for strategic decision-making. The processes and end results are more identifiable and generic within the competitive marketplace. For instance, the strategy formation process is selected based on analytical calculations of competitors, suppliers, customers, substitutes and new entrants. A restaurant must establish prices for their foods that cover costs and allows them to turn a profit. However, they must be mindful, as they have competitors within the area that offers more for less.

Resource-based school of strategy revolves around the concept of competitive advantage, but unlike its two predecessors, it’s more so focused on internal factors rather than the market. The sustainability of competitive advantage is based on to which the extent of their resources can be management, their uniqueness and their availability. Resources such as cash, equipment and vehicles are valuable, but an organization’s competitors can readily acquire them. Instead, a resource is strategic to the extent that it is valuable, rare, difficult to imitate, and non-substitutable. WestJet’s culture provides the firm with uniquely strong employee relations in an industry where strikes, layoffs, and poor morale are common. Their ‘culture’ is a resource that is hard to replicate, which provides them with an effective strategy for staying within the marketplace.

References

Edwards, J. (2022). Mastering Strategic Management. Retrieved from https://ecampusontario.pressbooks.pub/strategicmanagement/

Hattangady, V. (2019). Evaluating Mintzberg’s 10 Schools of Thoughts for Strategy Formulation. Retrieved from https://www.financialexpress.com/opinion/evaluating-mintzbergs-10-schools-of-thoughts-for-strategy-formulation/1609541/

Ritson, N. (2013). Strategic Management. Retrieved from https://my.uopeople.edu/pluginfile.php/1567123/mod_book/chapter/331954/BUS4403StratMgt.pdf

Out-Nyarko, D. & Sarbah, A. (2014). An Overview of the Design School of Strategic Management. Retrieved from https://www.scirp.org/html/11-1530092_48145.htm