Strategy Essay Example | Topics and Well Written Essays - 2000 words - 1

Strategy - Essay Example In fact the strategic management process is a continuing, integrated process that requires constant consideration. The internal and external factors that impact the working of an organisation are considered during the environmental scanning process. This scrutiny paves the way for strategy formulation. The final step of strategy implementation entails reassessing all aspects since the business environment is really dynamic. This paper discusses the various factors that a strategist needs to consider while implementing a strategy. The paper follows the sequential order of strategic management. It dwells on the Michael Porter’s Five Forces Model and highlights the importance of SWOT Analysis. It refers to the importance of organisational structure in the implementation of strategy. An attempt has been made in the paper to figure out which resources and capabilities are employed in implementing strategy and achieving competitive advantage. 2.0 Five Forces Framework There are five competitive forces in an industry that play a role in shaping strategy. A careful analysis and evaluation of these forces enables a strategist to create a position for the organisation that makes it less vulnerable to attack.  Porter (1979) suggests that the attractiveness and profit potential of the industry depends on threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products and intensity of rivalry among existing firms in the industry referred to as jockeying among current contestants.   The quantum of profit that an organisation can eek out will depend on the collective strength of these five forces. A strategist needs to consider these forces, understand how they impact business and chalk out a way to grow business even if some of these forces are not favorable. If, in a particular industry, all these forces are extremely favorable, it will attract many players and, in the ultimate analysis, it would be very difficult to earn profits in this industry. If these forces are collectively weak, it provides an opportunity for a particular firm to provide superior performance and thrive in the industry. A strategist cannot assign equal weight to all these forces. These forces, which determine the ultimate profit potential, impact different industries in varying degrees. In the steel industry, the threat of substitutes plays a key role. For example, the steel industry may jostle with the aluminum industry and the plastic manufacturers to provide raw material to the packaging material industry.    2.1 Political-Legal Forces During the implementation stage, the strategist must consider the ease of entry into a particular industry. The ease or difficulty in entering a particular industry is contingent on the entry barriers prevalent in the industry and the likely reaction from the existing players. The strategist would think twice before venturing into an industry with deeply entrenched players who would be hostile to any new firm attempting to enter the industry.   The barriers to entry may also arise due to the following; economies of scale, product differentiation, capital requirements, cost disadvantages independent of size, access to distribution channels and government policy (Porter, 1979). The government can exert a lot of control over the functioning of organisations. It can, from time to time, frame rules and regulations and provide a regulatory framework within which organisations have to operate.