MNG3701
EXAM PREP
FOR 2022.
Critically differentiate between the concepts of strategy, strategic planning and strategic
management.
Strategy
Strategy is the art of aligning the company’s strategies in order to out-compete one’s competitors in a rival
business market with a view to achiev...
1. Critically differentiate between the concepts of strategy, strategic planning and strategic
management.
Strategy
Strategy is the art of aligning the company’s strategies in order to out-compete one’s competitors in a rival
business market with a view to achieving the desired competitive advantage by ensuring that all the relevant
departments within the firm are receiving similar information and training. Strategies are incorporated into the
business as the tools to improve the business’s current plans and adapt to new and vibrant procedures which are
guaranteed to take the business to the next level, where it is rising above its fellow-similar-product-based-
companies and also to ensure that sustainability is incorporated in the new strategic formulation procedures as it,
(sustainability) ensures secured future of a business in a competitive rival business environment. Similarly,
Leopold and Harris, (2009), define strategy as, ‘the pattern emerging over time in an organization as actions, (of
both planned and unplanned nature), are carried out to enable the organization as a whole to carry it into the
future’. Also, Quinn, (1990), and Mintzberg, (1994), corroborates that; ‘strategy is seen not as a pattern and
procedure a company follows through, but as a pattern which unfolds over time in which formal planning can be
found to occur to a greater extend’.
Strategic Planning
Strategic planning is the coordination of all the business units being put together in a more resourceful manner
that encompasses the deliverables and goals and aims of the organisation. It is about achieving the desired long
term goals of the business through strategic intent. Strategic planning involves strategic formulation and strategic
intelligence for running the organization and also a view on both internal and external environments within which
the business is or going to operate. Neil Ritson, (2013:63), maintains that, ‘the purpose of the strategic
alternatives generated by SWOT analysis should be to build on organisation strengths in order to exploit
opportunities and counter threat in order to correct organizational weaknesses’. Also, Kotler, (1997:89), shares
some light by stating that, ‘Market-oriented strategic planning is the managerial process of developing and
maintaining a viable fit between the organization’s objectives, skills, and resources and its changing market
opportunities. The aim of strategic planning is to shape and reshape the company’s businesses and products so
that they yield target profits and growth’. Kotler, below, displays the concept of how the strategic intent helps the
organizations to grow, penetrate the market and as well as how to stay in the game.
Strategic Management
Strategic management is the thinking process of strategy formulation and it involves spotting the trends and
understanding the competitive landscape into which an organization performance its activities. It coordinates all
the organization’s resources and core-competencies into a ‘chain of command’ and ‘bureaucracy’. In the same
manner, Ehlers and Lazenby, (2012:3), corroborates, ‘strategic management can be defined as the process
whereby all the organizational functions and resources are integrated and coordinated to implement formulated
strategies which are aligned with the environment, in order to achieve the long-term goals of the organization and
therefore gain a competitive advantage through adding value for the stakeholders’.
2. Describe the different levels of strategy in an organisation.
Corporate Level
This is the top management level and it affects the strategic decisions of the organization as managers and the
board of directors makes decisions here from the top to the bottom, the ‘top-bottom’, approach. Here CEO and
the board of directors can be found. Neil Ritson, (2013), describes the corporate level as ‘knowing what
businesses we are in and what business should the organization be in?’.
The Business Level
This is where the staff and other middle and operational managers can be found. Here we can expect to see
divisional managers and the staff of separate business units.
, The Functional Level
Finally the functional level, the staff on the floor implements the activities from the top managers. Here we can
expect to see the functional managers and the staff in each functional area in a business unit. The line of
bureaucracy and the chain of command takes place within these three levels.
3. Critically discuss the importance, benefits and risks of strategy.
It is important to ensure that an organization develops a working strategy that it will rely on in the long-term
planning process of the organization because strategy serves as the blueprint of the organization and promote
high profitability, high productivity, empowerment and some improved communication within the rest of the firm,
thereby improving the internal participation of every employee from every level and functional area. Identifies
industry changes and key external trends, indicates the company’s future direction, strategy and business model
creates a pro-active organisation. Ehlers and Lazenby, (2012: 13), argue about some risks which include risks of
‘time’ where managers spend too much time on planning. They also warn about the risk of ‘the uncertain chain of
implementation’ where they warn that most employees who are the implementers, don’t usual understand
properly how and why they are implementing, ‘this’. They further warn about against ‘culture of change’, where
they elaborate that change is inevitable and as a result, there must be flexibility and creativity incorporated onto
the strategy planning in order to ensure success
4. Describe the tests for a winning strategy
Grant and Jordan, (2012: 10-12), identify the following common winning tests for strategy:
Goals that are consistent and long term
An in-depth understanding of the competitive environment
An objective appraisal of resources
Effective implementation
1.0 The Concept of Strategy
Strategy which is all about gaining competitive advantage, it can also be seen as the art of marking the most
intelligent choice that will help use our limited resources to win the competition for value creation , greater value
for your customers and greater profit for your company.
Strategy as a concept focus on how an organisation strategic direction and strategic action plan can help to attain
a sustainable competitive advantage and achieve its long terms objectives in the rapidly ever changing business
environment.
While Strategic Planning – a key element of strategic management is based on the concept of strategic thinking
and strategy focus on;
deciding on the future of the organisation
analyzing the organisation external and internal environment
And finally selecting appropriate competitive strategies.
Above all Strategic Management combines the two concepts, looking at how organizations achieve a
competitive advantage, superior performance and sustainability. Strategic management involves managers from
all part of the organisation in the formulation and implementation of strategic goals and strategies. it integrate
strategic planning and management into a single process.
2.0 The Different Level of Strategy in Organization
Corporate entities have four level strategies, corporate level strategy at the corporate level, business level
strategies at the business level and the tactical and functional level strategies at the lower level.
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