ISLAMIC UNIVERSITY IN UGANDA NAME: REG NO: COURSE: FACULTY : COURSE UNIT: YEAR\SEMESTER: INSTRUCTOR: MUBARIK ADAM 110-033021-04927

BACHELOR OF BUSINESS STUDIES MANAGEMENT STUDIES PROCUREMENT AND LOGISTICS TWO\two MRS. NAKAFEERO REHMAT

QUESTIONS: 1. Define the term strategy. 2. According to the scholar by names mintzberg who observed that the word str ategy has been uses implicitly. He ended up defining it with five definitions. E xplain these definitions. 3. As far as procurement is concerned, there are five elements of strategic thinking. Explain them in details. 4. Explain the three levels of organizational strategy. The word strategy is derives from the Greek word strategia which means generalship. It has initially been a military concept till after the world war two when it be gan to be used in a business context. According to Johnson and scholes, they defined strategy as:The direction and scope of an organization over the long term which achieves adv antage for the organization through its configuration of resources within a chan ging environment and to fulfill stakeholder expectations. Johnson and scholes came up with this definition after identifying and combining the eight characteristics of strategy which are put as bellow:i. Strategy is likely to be concerned with the long term direction of an or ganization. ii. Strategic decisions are normally about trying to achieve some advantage for the organization over its competitors. iii. Strategic decisions are likely to be concerned with the scope of an orga nizations activities. iv. Strategy can be seen as the matching of resources and activities of an o rganization to the environment in which it operates-sometimes known as strategic fit. v. Strategy can also be seen as building on or stretching an organizations res ources and competences to create opportunities to capitalize on them. vi. Strategies may require major resource changes for an organization. vii. Strategic decisions are likely to affect operational decisions. viii. The strategy of an organization is affected not only by environmental fo rces and resources availability but also the values and expectations of those wh o have power in and around the organization Mintzberg observes that the word strategy has long been used implicitly in diffe rent ways even if it has been traditionally used in only one. He therefore provi des five different definitions as plan, ploy, pattern, position and perspective. 1. As a plan: strategy is some sort of consciously intended course of actio n, a guideline or a set of guidelines to deal with a situation. From this perspe ctive, strategy is concerned with how leaders or managers try to provide organiz ational direction and pre-determined courses of action and also with cognition ( knowing) or how plans or intentions are initially conceived in the human brain. 2. As a ploy: strategy is a specific maneuver intended to outwit an opponen t or competitor. 3. As a pattern: strategy is a stream of actions demonstrating consistency in behavior, whether intended or not intended 4. As a position: strategy is a means of locating an organization in an env ironment. The positional approach sees strategy as a mediating force by which org anizations find and protect their positions or niches in order to meet, avoid or s ubvert competition in the external environment.

5. As a perspective: strategy is a concept or ingrained way of perceiving t he world. Mintzberg points out that strategy in this respect is to the organizati on what personally is to the individual-that is, distinct ways of working derivin g from the culture or ideology of the undertaking that becomes the shared norms, values and determinants of the behavior of the people who collectively form the organization. Mintzbergs five definitions help us to avoid attaching simplistic meanings to str ategy as he observes: strategy is not just a notion of how to deal with enemy or a set of competitors in a market. A contradictory and ill defined uses of the t erm strategy may result in to a good deal of confusion but by explicating and us ing various definitions, we may thereby enrich our ability to understand and man age the processes by which strategies form. The illustration below shows the five elements that make up strategic thinking.

The characteristics of each of the five elements are discussed by Lawrence as be low:Systems perspective: a system is a set of independent and interrelated parts tha t is dependent for survival on its environment. Strategic thinking, from a syste ms perspective, requires an understanding of:i. The external, internal and business ecosystem in which the organization operates and managing within such an ecosystem requires the ability to think str ategically about the position the enterprise within it and the relationships and the alliances with the enterprises that it is comprised of. An ecosystem in a b usiness context is a network of interrelated enterprises that may cross a variet y of industries. ii. How corporate, business and functional strategies relate vertically to t he external environment and horizontally across departments, functions, supplier s and buyers. iii. Interrelationships between the individual parts of the system. iv. Individual roles within the larger system and how the individual behavio r impacts on other parts of the system and the final outcome. Intent focus: strategic thinking is concerned with the identification of goals a nd devising strategies for their attachment. Intelligent opportunism: strategic thinking is openness to new experiences which allows one to take advantage of alternative strategies that may emerge as more relevant to a rapidly changing business environment. Thinking in time: strategic thinking is also concerned with bridging the gap betwe en current reality and future intent. Thus, when current resources and capabilit ies are insufficient, the organization must bridge the gap by making the best of what is available by connecting the past with the present and linking thus to th e future, strategic thinking is always thinking in time. Hypothesis driven: strategic thinking accommodates both creative and analytical thinking. Hypothesis generation poses the creative question what if.? Hypothesis te sting follows up with the critical question if, then and evaluates the data relevan t to the analysis. Taken together and repeated, this process allows an organizat ion to pose a variety of hypotheses without sacrificing the ability to explore n ovel ideas and approaches. Levels of organizational strategy. In a typical large, diversified business by, strategies are formulated, evaluate d and implemented at three levels as shown below. NB: non diversified undertakings and those with only one line of business, corpo rate and business strategies are normally synonymous. Corporate level strategy: generally, corporate strategies are concerned with:-

1. Determining what businesses the enterprise should be into maximize profi tability. 2. Deciding grand strategies (see below) 3. Determining the values of the enterprise and how it is to be managed. 4. Coordinating and managing major resources and relationships between the enterprise, its market, competitors, allies and other environmental factors. 5. Deciding on business locations and structures. Because corporate strategies provide long term direction, they change infrequent ly. Corporate strategies are usually less specific than those at lower levels an d, consequently, are difficult to evaluate. Grand and master strategies referred to above fall into four categories that is to say growth, stability, combination and retrenchment. Growth strategies: these are strategies adopted when an organization seeks to ex pand its relative market share by increasing its level of operation. Classification of growth strategies. Integration strategies: this is the strategy that a firm uses to extend or expan d in to other firms depending on the reason for integration. It may either take the form of vertical integration strategy which reflects the extent of an organi zations expansion upstream in to industries that provide inputs(backward integrat ion) such as a car manufacturer acquiring a steel rolling mill, or downstream (f orward integration) in to industries that distribute the organizations products, such as a car manufacture acquiring a car distribution chain. Intensive strategies: these are termed intensive because they are vigorous effor ts to improve an organizations competitive position in-relation to its competitor s such as product innovation and development, market penetration and market deve lopment. Diversification strategies: these seek to reduce dependence on a single industry or product. Such strategies may include: Concentric which is adding new, but related, products to the existing range. Conglomerate which is adding new, unrelated products or services. Horizontal which is adding new, unrelated products or services for existing cust omers, such as a car distributor offering insurance. Stability: stability focuses on maintaining the present course of action and avo iding, so far as possible, major changes. It is not necessarily a do nothing appro ach but a considered decision that the present way of working is the most approp riate in a given situation. Combination: this is the simultaneous adoption of several strategies according t o the needs of a particular aspect of business. Thus, a divisionalised organizat ion, a strategic organization may be to pursue a growth strategy in some divisio ns and one of stability in others. Retrenchment: also known as defensive strategies are those that clearly are oppo site of those focusing on growth. Typical retrenchment strategies include:o Harvesting: maximizing short term profits and cash flow while maintainin g investment in a product flow. o Turnaround: attempting to restructure operations to restore earlier perf ormance levels. o Divestiture: selling off one or more units of an enterprise to raise cas h or concentrate on core activities. o Liquidation: the decision to cease business and dispose of all assets. Illustration of growth strategies. Corporate growth strategies

Integration ication Strategies Vertical

intensive strategies product innovation &

diversif strategies concentric

Horizontal

devt market penetration conglomerate Market development horizontal Business level strategy: a strategic business unit(SBU) has been defined as: An operating unit or planning focus that groups a distinct set of products or se rvices that are sold to a uniform set of customers facing a well defined set of competitors. Generally business strategies are concerned with:Coordinating and integrating unit strategies so that they are consonant with cor porate strategies. Developing the distinctive competences and competitive advantages of each unit. Identifying product market niches and developing for competing in each. Monitoring products and markets so that strategies conform to the needs of produ ct markets at their current state of development. The selection of a business strategy involves answering the strategic question ho w are we going to compete in this particular business area? Two approaches to business level strategy are the competitive strategy of Michae l porter and the adaptive strategy of Miles and Snow. Porters competitive strategy. Competitive strategies are based on some combination of quality, service, cost a nd time. Porters typology identifies three strategies that can be used to (SBUs) a competitive advantage