The positioning school was the dominant view of strategy formation in the 1980s, promoted by Michael Porter. It views strategy as selecting generic positions through formal analysis of industry situations, making planners into analysts. It emphasizes calculating optimal strategies through positioning firms based on analyses of factors like competitors and customers. Critics argue it focuses too narrowly on economic factors over social/political ones, and favors traditional large businesses over other contexts.
The positioning school was the dominant view of strategy formation in the 1980s, promoted by Michael Porter. It views strategy as selecting generic positions through formal analysis of industry situations, making planners into analysts. It emphasizes calculating optimal strategies through positioning firms based on analyses of factors like competitors and customers. Critics argue it focuses too narrowly on economic factors over social/political ones, and favors traditional large businesses over other contexts.
The positioning school was the dominant view of strategy formation in the 1980s, promoted by Michael Porter. It views strategy as selecting generic positions through formal analysis of industry situations, making planners into analysts. It emphasizes calculating optimal strategies through positioning firms based on analyses of factors like competitors and customers. Critics argue it focuses too narrowly on economic factors over social/political ones, and favors traditional large businesses over other contexts.
This was the dominant viewer of strategy formation in the 1980s It was given impetus especially by Michael Porter in 1980, following earlier work on strategy positioning in academe and in consulting, all proceeded by the long literature on military strategy, dating back to 500BC and that of Sun Tzu, author of the Art of War. This view gives literal meaning to strategy and strategy reduces to generic positions selected through formalized analysis of industry situation hence planners become analysis. OVERVIEW OVERVIEW The approaches embrace the saying
Nothing but the Facts
Realized Strategy Calculate (Value than create or commit)
Intended Strategy
Analyze Optimal strategy for literal positioning of armies in battlefield Segregate types of strategies and match to most suitable conditions Imperative Imperatives and hence MAXIMS. E.g. Subdue enemy without fighting Sun Tzu: Study of Enemy and Positioning of army Strategy involves many calculations feeding off one another and less calculations means less chance of success. Von: Strategy is open-ended, creative, contradictory as it requires discipline yet feeds off all members involved. FIRST WAVE: Military School THE SECOND WAVE: THE SEARCH FOR CONSULTING IMPERATIVES BOSTON CONSULTING GROUP GROWTH SHARE MATRIX EXPERIENCE CURVE BCG: THE GROWTH SHARE MATIX * STAR ? PROBLEM CHILD $ CASH FLOWS X DOGS G R O W T H
P O T E N T I A L
HIGH LOW CURRENT MARKET SHARE EXPERIENCE CURVE CONCEPT THE THIRD WAVE: THE DEVELOPMENT OF EMPIRICAL PROPOSITIONS
Consisted of empirical search for relationships between external conditions and internal strategies Porters COMPETETIVE STRATEGY proved a trigger for this wave He put basic approach of design school and applied it to industry COMPETETIVE ADVANTAGE consisted many of concepts, of which, prominent were:
MODEL OF COMPETETIVE ANALYSIS
I. Threat of new entrants Economies of scale, switching costs, etc. II. Bargaining power of supplier Concentration, differentiated inputs, etc. III. Bargaining power of customer Level of awareness, loyalty, etc. IV. Threat of substitutes Switching, buyers propensity to substitute, etc. V. Intensity of rivalry amongst competing firms Industry growth, product differentiation, etc.
THE THIRD WAVE: THE DEVELOPMENT OF EMPIRICAL PROPOSITIONS GENERIC STRATEGIES A. COST LEADERSHIP Via experience, economies of scale, etc. B. DIFFERENTIATION Via development of unique product, brand loyalty, etc. C. FOCUS For narrow market segments, differentiation focus (differential offerings in focal market) and cost leadership (low price in the focal market)
VALUE CHAIN
position school reasearch Critique of the Positioning School Concerns about focus: The positioning schools focus has been described as being quite narrow by aiming mainly on the economic rather than the social and political. The approach is not wrong, but the focus tend to be narrow.
Concerns about contexts : The positioning school has a narrow context The positioning school is very bias towards traditional big business. Bias toward the external condition, especially of industry and competition.
Concerns about process : The message is not to get out there and learn, but to stay home and calculate.
Concerns about strategies : Strategies have a narrow focus More of a generic positioning rather than a unique perspective. At the limit, the process can reduce to a formula, whereby such a position is selected from a restricted list of conditions. First mover advantage.
Contributions to the Field Its emphasis on analysis and calculation. Reduced its role from the formulation of strategy. Focus on hard facts. Shifting the role of planner to Analyst. The role of the positioning school is to support the strategy making process rather than to be the process. Systematic way to the existing way of looking at strategy. Opened up avenues for research and provided various effective concepts to be built upon. Finding ways to combine it with the views of the other school.
Discussion of Organization's Approach To Strategic Management of Knowledge and Organizational Learning. Evaluation of Its Use of Strategic Frameworks and Tools.
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