When talking about strategy, most people simply associate it with a long term direction and plan. In fact, the components and development of strategy are far more diversified and complicated than people normally imaged. In this essay, by an review and evaluation of different approaches to strategy, it critically discuss the current debates of different approaches and discuss whether the definition of Chandler(1962) is appropriate to apply to the organization today.
Within 1960-1980,the planning approach from the business historian Chandler(1962), and the organizations like , consulting group Mc Kinsey and BCG has significantly reflected in the definition of Chandler (1962). Chandler (1962) formed a formal approach called Multi-divisional form(1962) . Multi-divisional forms means that the parent company owns smaller sub-companies and most sub-companies have autonomous divisions and decisions. Through this kind of approach and “visible hand”, the company can not only utilize potential economics of scale in production and distribution but it can coordinate functionally with different cadre of professional managers. As a result, the managers can easily achieve the objectives of the enterprise.
More important is that ,Harvard Business School(1960s), Ansoff (1965) and consulting group Mc Kinsey and BCG have successfully develop the approach and thus form different matrices to enhance analysis and thus adopt to the courses of action. Harvard Business School (1960) formed the SWOT analysis, examining the internal factors of strength and weakness and the external factors of opportunity and threat. Ansoff (1965) also developed the SWOT analysis, by emphasizing the distinctive competences in the long term, Ansoff's Product/Market matrix was introduced, which explain the relationship between existed or new product and market,becoming a part of the elements of the SWOT analysis. Moreover, the popular strategy consulting firms, BCG and Mc Kinsey also formed the BCG Growth-Share Matrix and a GE/McKinsey nine-box (three-by-three) matrix respectively. Those matrices are practical enough to be adopted into action by the enterprise and thus enhance the manipulation to achieve the strategic objectives.
Within 1980-90s, The direction of the approaches has changed from corporative planning to strategic thinking with competitive advantage, a way to focus on the performance and profitability. The reason behind is that the unstable economic environment such as the growing influences of Asian markets and oil price rise issues force the need of the competitive advantage. In the view of Michael Porter(1980, 1985), it is essential to define the attractiveness of industries and sectors, their potential changes, successful strategic groups, valuable market segments, threats and opportunities in the marketplace. Through Porter Five Force analysis, it can reflect that how external factors including suppliers, customers, new entrants and threat of substitute affect...