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Deciding on Strategic Options
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Introduction
After the determination of a firm’s strategic direction and the evaluation of the firm’s
internal and external environments, the next step in the strategic management process is deciding
on the strategies to adopt for implementation. A firm has to be extremely careful in the strategy
adoption process to avoid selecting unsuitable strategies. The process of deciding on a
competitive approach help organizations increase the likelihood of making the right decision. A
company has to decide on its competitive scope, production/distribution scope, and geographic
scope (Gamble et al., 2019). Strategic thinking helps consider all the necessary issues before
deciding on its competitive, geographic, or production/distribution scope. The SWOT decision
model can be of great assistance when deciding on the strategies to adopt and implement.
Process: Deciding on a Competitive Approach
There are several competitive approaches that a firm can adopt in the endeavor to gain a
competitive advantage over its competitors. The five generic competitive strategies that firms
can adopt are differentiation, best-cost provider, low-cost leadership, focused low-cost, and
focused differentiation (Gamble et al., 2019). All the strategies provide benefits to companies.
However, generic strategies have limitations and disadvantage (Gamble et al., 2019). The
competitive approach selection process would help companies select the best strategy.
Step one in the competitive approach selection process is the articulation of the business
purpose. The purpose will help inform the strategy that can help best fulfil the same. Step two in
the process is the determination of the businesses core competencies (Gamble et al., 2019). The
company will evaluate the competitive approach that best leverages on the core competencies
and provides the business with a competitive advantage (Gökkaya & Özbağ, 2015). Step three in
the process is the determination of the primary method of growth. A business has preferred
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methods of growth. The most suitable method of growth can help determine the best competitive
strategy to adopt. Step four is the determination of priorities regarding products or markets. Step
five is determining the strategies competitive strategies that competitors are utilizing and the
success of the strategies. Step six is to select the competitive strategy that satisfies the concerns
in the previous steps. The strategy selected through the rigorous process will likely be the best.
Strategic Thinking: Deciding on Competitive Scope
Strategic thinking involves intentional and rational thinking regarding critical factors that
affect the long-term success of a company (Goldman et al., 2015). The decision on strategies to
adopt requires serious strategic thinking. Rumelt (2011) argues that a good strategy is coherent
and has coordinating actions, policies, and resources. The strategic management team has to
engage in effective strategic thinking to adopt a coherent strategy and one that has all the critical
elements that Rumelt observes are crucial to a good strategy. The three scopes that a company
has to evaluate before selecting the best strategies are competitive, geographic, and production/
distribution scopes (Gamble et al., 2019).
Regarding the competitive scope, the strategic management team has to engage in
strategic thinking regarding the firm’s competitiveness, the competitive environment, and
competitors’ strategies, among other things, before selecting the most suite competitive strategy.
Geographic scope refers to the regions an organization operates within or plans to set up
operations (Gamble et al., 2019). Strategies regarding geographic scope are critical to the success
of a firm. Operating in unfavorable geographic regions can lead a business to make losses.
Serious strategic thinking is critical to making the right decisions. The production/distribution
scope also requires effective strategic thinking. Good strategic thinking relating to the specific
scope will aid ensure that the business operates within the right value chain.
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Decision Model
My decision model of choice is the SWOT model. The model is instrumental in
evaluating organizations’ internal and external environments (Sammut‐Bonnici & Galea, 2015).
A good SWOT analysis details a businesses’ strengths, weaknesses, opportunities and threats
(Krogerus & Tschäppeler, 2018). The good SWOT analysis provides great input for strategic
thinking concerning deciding on strategies (Sammut‐Bonnici & Galea, 2015). The SWOT model
provides information that can help the strategic management team adopt competitive strategies
that leverage the firm's strengths and available opportunities and help address weaknesses and
threats. A good SWOT analysis also contains details that can help enhance decision-making
regarding geographic and production/distribution scopes. The model helps gain an adequate
understanding of a company's internal and external environments, and that would help make
well-informed geographic and production/distribution strategies.
Conclusion
The competitive approach that a business decides to adopt can lead to success or failure.
Therefore, caution is needed to ensure that a business selects the best competitive approach. The
process of deciding on a competitive approach helps consider critical factors and variables, thus,
increase the likelihood of selecting the best competitive approach. Strategic thinking regarding
competitive, geographic, and production/distribution scope is also essential to making the best
strategic decisions. The SWOT model provides an internal and external environments analysis
which is critical to the adoption of the best strategies.
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References
Gamble, J., Peteraf, M., & Thompson, A. (2019), Essentials of Strategic Management, McGraw
- Hill Higher Education (6th ed.), New York, NY.
Gökkaya, Ö., & Özbağ, G. K. (2015). Linking core competence, innovation and firm
performance. Journal of Business Research Turk, 7(1), 90-102.
https://www.ceeol.com/search/article-detail?id=690358
Goldman, E. F., Scott, A. R., & Follman, J. M. (2015). Organizational practices to develop
strategic thinking. Journal of Strategy and Management. https://doi.org/10.1108/JSMA-
01-2015-0003
Krogerus, M., & Tschäppeler, R. (2018), The decision book: 50 models for strategic
thinking., W. Norton & Company, Inc., New York, NY.
Rumelt, R. (2011), Good strategy/bad strategy: The difference and why it matters., Crown
Business, New York, NY.
Sammut‐Bonnici, T., & Galea, D. (2015). SWOT analysis. Wiley Encyclopedia of Management,
1-8. https://doi.org/10.1002/9781118785317.weom120103
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Annotated Bibliography
Gökkaya, Ö., & Özbağ, G. K. (2015). Linking core competence, innovation and firm
performance. Journal of Business Research Turk, 7(1), 90-102.
https://www.ceeol.com/search/article-detail?id=690358
Summary of Key Points
One key point that the authors make in the article is that organizational resources
and quite important in organizational performance and competition. The resources help
enhance a firm’s competitive advantage. Another key point made in the article is those
core competencies are different from organizational resources. The authors argue that
examples of an organization’s core competencies are uniqueness, extendibility, and
inimitability. Gökkaya and Özbağ (2015) observe that like organizational resources, core
competencies are also crucial to competition and performance.
Evaluation of the Quality of the Publication
The publication is of superior quality. One reason why the publication is of
superior quality is that it is a peer-reviewed research article. Peer-reviewed articles are
the most reliable scholarly material. The article was published in the Journal of Business
Research Turk. Another reason why the publication is of superior quality is that it is
thoroughly researched. The authors cited many reliable sources to support their ideas.
Evaluation of the Quality of the Author
The authors of the article are Öznur Gökkaya and Gönül Kaya Özbağ. Both
authors are of great quality. One of the reasons why the authors are of great quality is that
they are management scholars. Both have attained higher education in business and
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management. Another reason why the authors are of great quality is that they have huge
experience in the research and publishing of peer-reviewed articles in reputable journals.
Where the Publication Fits into the Discussion
The publication was used in the discussion to emphasize the importance of
evaluating an organization’s core competencies in the process of deciding on the
competitive approach. The article provides evidence for the claim that core competencies
help enhance a firm’s competitive advantage and should inform the firm’s competitive
approach.
Goldman, E. F., Scott, A. R., & Follman, J. M. (2015). Organizational practices to develop
strategic thinking. Journal of Strategy and Management. https://doi.org/10.1108/JSMA-
01-2015-0003
Summary of Key Points
The main purpose of the article was to research the methods used by
organizations to enhance their employees’ strategic thinking abilities. One key point
made in the article is that strategic thinking is critical to strategic planning. Effective
strategic thinking helps organizations adopt the most appropriate strategies in attaining
their ends. Another key point is that enhancing leaders’, managers’ and employees’
strategic thinking abilities help become effective in strategic management. The third key
point is that organizations use a limited range of practices to enhance their employees’
strategic thinking abilities.
Evaluation of the Quality of the Publication
The publication if of superior quality. One reason for claiming that the publication
is of superior quality is that it is a peer-reviewed research article. Thus, it is a reliable
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source of knowledge. The article is published in the Journal of Strategy and Management.
Another reason is that the article is thoroughly researched. The researchers collected and
analyzed crucial data and presented the data effectively in the report.
Evaluation of the Quality of the Author
The publication’s writers are Ellen F. Goldman, Andrea R. Scott, and Joseph M.
Follman. The three are great quality authors. The three are business scholars. They have
researched published several other peer-reviewed articles in the field of business. Their
knowledge of business, particularly management, and experience in researching and
publishing peer-reviewed articles make them great quality authors.
Where the Publication Fits into the Discussion
The article fits in the discussion of the importance of strategic thinking in
determining competitive, geographic, and production/distribution scopes and strategies.
The article provides evidence for the importance of strategic thinking in strategic
management.
