Strategic Fit

What types of issues can be described as strategic and what distinguishes them from other types of issues in an organisation (such as those as would be regarded as operational)?

The characteristics of strategy is that it is concerned with the long-term direction of an organisation. Strategic decisions are normally about trying to achieve some sort of long-term advantage for the organisation over competing organisations. Some of these strategic decisions are conceived of as the search for effective positioning in relation to the market competitors so as to achieve advantage.

Strategic decisions are certainly concerned with the overall scope of the organisations activities. Scope is very important because its concerned with the way in which an organisation manages itself and recognizes the business environment boundaries. By broadening the business activity boundaries the organisation can find itself in uncertain and unfamiliar waters and so a level of caution is to be exercised. So the organisation should be looking at the strategic fit with the business.

Strategic fit is about developing strategy by identifying opportunities in the business environment and adapting existing resources and competencies so as to take best advantage of these opportunities. As an example, this might take the form of a small business trying to find a particular niche in the market or larger organisations investing in businesses which have found successful market positions.

In a different light strategy can be viewed as building on or stretching an organisations capabilities to create further opportunities on which to capitalize. Strategic Stretch therefore is about leveraging the existing resources and competencies to provide competitive advantage for the business. Small businesses might make an attempt to change the perceived rules of the market to better match their competencies. Of course in reality most organisations develop strategy on the basis of both Fit & Stretch;

To summarize so far…

Strategic Fit;

The underlying basis for strategy development is matching market opportunities to the existing resources, the correct positioning and therefore differentiation of products and services to match market need in the context of being a niche supplier.

Resource Stretch;

Leveraging of resources to improve value for money, differentiation based on competencies suited to market need or to creating a market need and services based on changing the rules of engagement with the market.

The Vocabulary of Strategy

Mission; the purpose of the organisation, in-line with the values and expectations of the main stakeholders

Vision; the desired future state, aspiration of and for the organisation

Goal; a general aim or purpose

Objective; a quantifiable goal

Unique Competencies; resources and skills which provide the competitive advantage

Strategy; long-term direction of the organisation

Control; the monitoring process of the steps to assess effectiveness of strategy and actions

Strategic Management

Its not enough to say that you have a strategy, you have to manage the implementation of the strategy. Strategic Management is different than all other areas of management in that it is greater than any one area of an organisations activities. Strategic management is concerned with complexity, is ambiguous, and deals with non-routine situations with organisation-wide rather than operationally specific implications. This is a major challenge for managers who are principally concerned with routines aimed at specific task goals and normally delivered on a day-to-day basis. Managers have normally been trained through experience as much as anything else over many years to undertake operational tasks and take operational responsibility. Accountants see things in financial terms, IT Managers see things in tech terms, Marketing Managers see things in terms of marketing materials and activities…

The manager who aspires to manage strategy will find that they have to develop within themselves the capability to take an overview, to conceive of the whole, to conceptualize difficult issues.

Once again thank you for reading this far.

Philip

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