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SWOT Analysis Nike, Inc

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SWOT Analysis Nike, Inc

Arab Open University

    Business behaviour in a

    changing world - B300

    TMA04

    Tutor : Ms. Farah ADAWIEH Done by: Rowaydeh Khaled Masadeh

ID Number: 040086

    Monday 23/01/2008

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Question: Answer in maximum 2000

    words in essay format. Be sure to

    reference your work.

    Discuss why strategies in different industries can be different. Give examples from organisations which you

    have studied on the programme, and from your own

    knowledge of your region to support your discussion.

    What is strategy? The word ―strategy‖ derives from the ancient

    Athenian position of strategos. Generally, the definition of strategy is regarded

    as a complex combination and there are lots of debates about the definition

    itself.

    ―A number of reasons contribute to this complexity. First, the field represents the convergence of multiple disciplines, including economics,

    organization theory, general business, marketing, finance, and geography (to

    name but a few). As a result, strategy is often viewed through different lenses,

    depending on one’s background and purpose. Second, and perhaps more

    important, business strategy is a very young field. As a result, not all of the

    concepts and approaches to analysis are yet well established or agreed on.‖

    (1)

    According to Mintzberg and Waters (1985), there are five kinds of strategies in their model:

    1. Emergent strategy.

    2. Intended strategy.

    3. Deliberate strategy.

    4. Realized strategy and

    5. Unrealized strategy.

    Their definition of these is:

    Emergent strategies; can be seen as responses to unexpected

    opportunities and problems and are usually developed from the locations at

    which business-level strategies are usually implemented, i.e. within business

    units and not at corporate headquarters. The pure definition of emergence

    requires the absence of intentions. Such as when we faced imitation problem

    to one of our most important and vital product, it is called "Glatt hair

    straightener", there were Chinese and Egyptian imitated products, we acted

    fast and increased our prices which we never planned before and we

    succeeded in counter fighting the imitated products.

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    Realized strategy; is a blend of intentions and emergence which can be interpreted by reference to the strength of pressure from the external

    environmenta kind of environmental determinism.

    Intended strategy; is strategy as conceived of by the top management

    team. Even here, rationality is limited and the intended strategy is the result of

    a process of negotiation, bargaining, and compromise, involving many

    individuals and groups within the organization.

    For example, Procter and Gamble; of the biggest personal care

    companies in the world; introduced different brand names into the market for

    the same product such as Pantene, Pert Plus, Head and Shoulder these all

    hair shampoos, and they all have excellent market share which is taken from

    their competitors. Each brand have market share combined together can be

    very remarkable.

    Mintzberg and Waters mentioned that Realized strategy the actual

    strategy that is implemented is only partly related to that which was intended

    (Mintzberg suggests only 1030 percent of intended strategy is realized). The

    primary determinant of realized strategy is what Mintzberg terms emergent

    strategy the decisions that emerge from the complex processes in which

    individual managers interpret the intended strategy and adapt to changing

    external circumstances. This should also been seen as a process and

    especially if you include the variable of time. The realized strategy effects the

    intended strategy as times goes by. This is an important part since it shows

    that current strategies will affect future strategies.

    There are two extreme types of organizations, the ones that have only

    deliberate strategies and the ones that have only emergent strategies.

    These two pure forms are very rare and perhaps there is no organization that

    has one of these pure types of processes. For a pure deliberate strategy, the

    organization must have pure intentions with a relative concrete level of detail.

    This plan has to be carried out exactly as intended.

    For a strategy to perfectly emergent there has to be consistency in

    action over time but without any intentions. Except for these two pure types of

    strategies that are extremely rare according to Mintzberg & Waters (1985 pp

    257-258) but they argue that between those two extremes are several

    different type of strategies that are common in companies today.

    Mintzberg and Waters (1985) classifies eight different types of

    strategies:

    1. The planned strategy;

    The planned strategy is clear intentions back by formal control. The

    leader is the centre of authority with their intentions being very clear and

    precise and the goal is to transform the intention to collective action with

    minimum distortion. Programs and systems are built in to the plan to ensure

    that no one acts in another way then intended.

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    For this type of strategic process to be effective the environment has to be extremely stable or the organization has to be able to predict it with great

    accuracy. When organizations put large quantities of resources in a mission

    or project they might not tolerate unstable environment. When they have plan

    several years ahead and don’t allow avoiding behaviour and commit

    themselves firmly. An example of this can be yearly budget in our division,

    where the head of the division should prepare sales and purchasing plans for

    the whole year ahead of him and must be applied -/+ 5%.

2. Entrepreneurial strategy;

    The second type of strategy there is has tolerance for a little emergent strategy, but is still very much planned. The owner controls the organization

    tightly and can impose his vision or direction on the organization. This type of

    strategy is very common in young organizations and in entrepreneurial

    organizations. The central actor is the one that places the organization were

    he/she wants to in the world.

    Compared to the planned strategy the intentions are harder to identify and are less specific, but as long the actors in the organizations respond to

    the will of the leader the strategy appear to be rather deliberate. Because the

    strategy comes from a single person there can be sudden changes in it and

    reformulation isn’t unusual. The adaptability of the entrepreneurial strategy is

    what distinguishes it from the planned one. Visions in the brain of a person

    are more flexible then articulated ones. The adoption and ―emergentness‖ of

    planned strategies are discouraged by the articulation.

3. Ideological Strategy;

    Vision can be collective when the members of an organizations share

    a vision and the members identify so strongly with it that they pursue it as an

    ideology. This leads to patterns in their behaviour so that clear realized

    strategies can be identified. Since an ideological strategy is likely to overt and

    becoming articulated one can see intentions. That is why one can say that this

    type of strategy is deliberate. These intentions would be viewed as

    organizational, differing from the entrepreneurial and planned strategy by

    being embraced by everyone in the organization and not originate from one

    centre and then being accepted passively.

    The collective vision makes it harder to change, because all members of the organization have to accept the changes. Moreover, the ideology is

    rooted in traditions and precedents. Therefore people resist changing it.

4. Umbrella strategy;

    For the umbrella organization Mintzberg and Waters relax the condition of tight control over the actors in the organizations and in some cases control

    over the environment. Leaders have only partial control over the members of

    the organization and can design the umbrella type of strategy.

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    An umbrella strategy is when there are general guidelines for behaviour, defined boundaries and the other actors in the organization can

    maneuver within them. This means that strategies can emerge within these

    boundaries.

    The umbrella strategy can not only be labeled as deliberate and emergent but also ―deliberate emergent‖ in the sense that the central

    leadership creates conditions which allow strategies to emerge. Like the

    entrepreneurial strategy there is a certain vision emanating from the central

    leadership, but in the umbrella strategy don’t the ones controlling the vision

    also control the realization. For example; sales and increasing our sales is the

    sole target for our division. We are always ready to face the competitors by

    conducting heavy campaigns, special trade and consumer offers and extra

    incentives for the sales force to achieve unexpected sales. Within this specific

    target several different strategies emerged, as various problems were solved

    by different specialized employees.

5. Process Strategy;

    The process Strategy is similar to the umbrella strategy. The leadership functions in an organization in which actors must have considerable discretion

    to determine the outcome. This is because the environment is unpredictable

    and uncontrollable. Instead of controlling strategy on a general level with

    boundaries and target the leadership influences the strategy indirectly.

    In other words they control the process of strategy making instead of the content of the strategy. This results in a behaviour that would be

    deliberate in one respect but emergent in another. The leadership designs the

    system from which patterns of action evolve from.

6. Unconnected strategy;

    The unconnected strategy is perhaps the most straightforward of all. One part of the organization, a subunit or sometimes even an individual is

    able to realize its own pattern in its stream of action. Since these unconnected

    strategies doesn’t come from the central leader ship or from intentions from

    the whole organization the can be considered relatively emergent. But for the

    subunit/individual they clearly can be deliberate or emergent depending on

    the prior existence of intentions. Thus the unconnected strategy may be

    deliberate or emergent for the actors involved but always emergent from the

    perspective of the organization.

7. Consensus strategy;

    In this strategy the condition for prior intentions are totally dropped, this type of strategy is clearly emergent. In this strategy different actors converge

    on the same pattern or theme so that it becomes pervasive in the

    organizations, without need for central direction or control. The consensus

    strategy grow out of the mutual adjustment among the different actions as

    they learn from each other and from their responses the environment and

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thereby finds a common pattern that works for the organization. This means

    that the convergence is not driven by intentions by management or by prior

    intentions shared by the organizations as a whole; rather it evolves around the

    results of a host of individual actions.

    Sometimes actors might promote the consensus and try to negotiate others to accept it, but the point it that this strategy comes more from

    collective actions then from collection intentions. One example of this is when

    the Marketing Department suggests marketing campaign or different way to

    promote for a new product they must have the sales team to approve it to go

    ahead with their plans.

8. Imposed strategy;

    This time the strategy comes from outside the organization, it's imposed on the organization. This means that the environment can directly

    force the organization into a pattern in its stream of actions regardless what

    the central control does. The clearest case is when an external group or

    individual with a great influence over the organization imposes a strategy on

    the organization. For example, we used to import from Heinz Company baby

    food called "Farley's Rusks" it was available in different supermarkets and

    superstores, the Jordanian ministry of Health forced all companies dealing in

    baby food to sell their products to pharmacies only. Therefore, all our sales

    plan and purchases were affected by this new regulation.

    The strategy was clearly deliberate but not by anyone in the organization. Given the inability to resist, the organization had to pursuit the

    given strategy and thus it became deliberate for the organization. Sometimes

    can the environment rather than individual/group that impose strategies on

    organizations by restricting their options. The organization has to make the

    external strategies, imposed on them, internal. In reality the organizations

    have to compromise between determinism and free choice. Environment

    seldom pre-empt all choice and just as rare the environment seldom offers

    unlimited choice. As most real world strategies have some umbrella strategy

    characteristics, so to does the environment set boundaries for most

    organization.

    These eight types of strategic processes is a big part of Mintzberg & waters (1985) theory. They claim that there aren’t many, if any, companies

    that can be classified as the two extremes but that they have the

    characteristics similar to one of the above mentioned types of processes.

    Thus all companies that are taking part of this study should be describable by

    one of them.

    Strategy is about establishing direction into the future. But the future is unknown and, with accelerating changes in the world, is increasingly difficult

    to predict. However, some regularities are evident in terms of industries'

    evolutionary paths.

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References:

     (1) (http://www.ache.org/PUBS/Luke1.pdf, 2005-11-22)

     Case study, strategy for business, A reader, (p 59-141).

     http://www.open.ac.uk/socialsciences/__assets/lv2hct6pjf0q9th5gj.pdf

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