“If you can always remember danger when you are safe and chaos in times of order, be on the lookout for danger and chaos while they are not yet in shape, and avoid them before they arise; this is the best strategy of all. ” (Sun Tzu, general, strategist, and Chinese philosopher, 5th century BC).
1.- Introduction and conceptual clarification
Curiously, the main exponent of our language provides scarcely three definitions for the concept of strategy: "Art of directing military operations"; "Art, trace to direct an issue"; and, "In an adjustable process, set of rules that ensure an optimal decision at all times." However, by examining the common factors in such descriptions, and by omitting the word's military origin, we can infer the importance attached to the concepts of leadership and decision-making.
The meaning of the term strategy comes from the Greek word Strategos ("army chiefs"), traditionally used in the field of warrior operations. In recent years the concept of strategy has evolved in such a way that, on the basis of this, a new school of management and a new way of directing organizations, called «Strategic Management», have emerged. The use of the term strategy in administration means much more than its military meanings. For the military world, strategy consists of the science and art of employing a nation's armed forces to achieve certain ends that are decided by policy.
Management strategy is a more difficult term to define, and in fact very few authors agree on the meaning of strategy. However, the definition of strategy arises precisely from the need to have it.
In the face of technological and political changes, the global economy and different social crises, it is confirmed that the world poses novelty, diversity and transience. In many countries you can see great uncertainty, the variables are less and less controllable, the most precious value seems to be speculation, dealing with assumptions, the ability to interpret. These changes limit people's creativity and innovation, and this has to do with strategy. In this context, the strategy is more focused on discovering, and not necessarily on programming; it is rather the ability to guide, and not precisely control. Rather, it refers to leading ideas.
The strategy allows us to find the answer to two fundamental questions: what is our business? and what should it be? It is a present decision with future effect; however, the timing of the strategy is undetermined, because most likely, the established strategy will only be valid until the next maneuver by ourselves or by our competitors.
From a broader approach to strategy, issues such as positioning, a vision, a plan, and an integrated pattern of behavior are used to define strategy.
The strategy is a coherent, unifying, and integrative decision model that determines and reveals the organization's purpose in terms of long-term goals, action programs, and resource allocation priorities. Selecting the current or future businesses of the organization, trying to achieve a long-term sustainable advantage and responding appropriately to the opportunities and threats that arise in the external environment of the company, taking into account the strengths and weaknesses of the organization.
Management strategy basically means adapting the organization's resources and skills to the changing environment, taking advantage of opportunities and evaluating risks based on objectives and goals. We resort to strategy in uncertain, unstructured, uncontrollable situations, that is, in those situations where there is another side whose behavior we cannot predict. Having a strategic purpose implies having a vision about the future, it must allow us to orient, discover, explore. The sense of orientation is clearly linked to the business vision, and should help us respond: What company do we want to be? Where do we want to go? One of the business keys is to be clear about the current and future business, you cannot decide without knowing where you want to go.
While the strategy allows us to understand in general terms what to do, the tactic instead shows us guidelines on how to do it and execute it, so the latter is more related to the operational field. Although the design of the strategy has been conventionally more linked to decision levels at higher levels -whether they are of a corporate or managerial nature-, the modern vision of the administrative sciences requires viewing it based on a "commitment" of horizontal and participatory in people. This is because although the strategy is commonly "created" at the upper levels of the company -related directly as the necessary result to achieve the landing of the vision and central objectives of the organization-, the ideal is that it is not only executed by the following levels,but that it be shared, believed, assumed and even discussed by them, achieving a commitment and participating in the philosophy that distinguishes the company, allowing higher levels (through a correct feedback process) to determine and rethink the what, when and how strategies should be modified and / or adapted to changes, whether they originate internally or externally to the organization.
2.- Different definitions and approaches
Reference will be made to different authors who have provided various arguments to define the strategy. It is a fairly difficult concept to define and also over the years it has evolved according to the changes that the context has undergone. Since the late 1950s, the classical authors of the administration have raised innumerable concepts of strategy, and there was a tacit agreement that their applicability in the long term was implicit in their conception. Surely, in competitive times but with a less effervescent technological life cycle than today, explaining the strategy as a long-term decision was credible.
a) Peter Ducker: He was one of the first to mention the term strategy in administration. For him, the organization's strategy was the answer to two questions: What is our business? What should it be? (note the link with modern concepts of mission and business vision). In one of his best-known books, Drucker manages to explain the concept of business strategy and shows us how existing businesses have to focus more on opportunities than problems to be effective, given that opportunities allow growth and develop. His text "Management by Results" was the first book to deal with what is now called "Business Strategy", and it is still one of the most widely used books on the subject. Drucker himself noted, "When I wrote it,Over twenty years ago, my original title was, in fact, 'Business Strategies', but 'Strategy' in those days was not a commonly used term. Indeed, when my publisher and I decided to test the title with well-known executives, consultants, management professors, and booksellers, we were strongly recommended to drop that term. "Strategy," they told us over and over, "belongs to the military or perhaps to political campaigns, but not to businesses."it belongs to the military or perhaps to political campaigns, but not to businesses ».it belongs to the military or perhaps to political campaigns, but not to businesses ».
b) Alfred Chandler jr: Defined the strategy as the determination of goals and basic long-term objectives of the company, the addition of courses of action and the allocation of resources necessary to achieve those goals. For him, structure follows strategy. His interest was in studying the relationship between the way companies followed in their growth (their strategies), and the design of the organization (its structure) planned to be managed in its growth.
c) Kenneth Andrews: Combined the ideas of Drucker and Chandler in their definition of strategy. The strategy is the pattern of the objectives, purposes or goals and the essential policies and plans to achieve these goals, established in such a way that they define what kind of business the company is or wants to be in, and what kind of company it is or wants to be..
d) Igor Ansoff: Strategy is the common link between the activities of the organization and the product-market relations such that they define the essence and nature of the businesses in which the organization is, and the businesses that the organization plans for the future. Ansoff said, "When a manager understands the environment and recognizes that the environment is constantly changing, then he can make the right decisions by leading organizations into the future."
e) Henry Mintzberg: Possibly he is the one who provides one of the most complete definitions of strategy, since he identifies five visions from various uses of the term.
- Strategy as a plan: it is a course of action that works as a guide for dealing with situations. This plan precedes action and is developed consciously. Strategy as a guideline of action: works as a maneuver to win an opponent. Strategy as a pattern: works as a model in a flow of actions. It refers to the desired behavior, and therefore the strategy must be consistent with the behavior, whether it is intentional or not. Strategy as a position: strategy is a position with respect to an organizational environment. It works as a mediator between the organization and its environment. Strategy as a perspective: corresponds to a broader vision, implies that it is not only a position, but also a way of perceiving the world. Strategy is a concept,an abstraction in the minds of the actors. The important thing is that the perspective is shared by and among the members of the organization, through their intentions and actions.
Mintzberg has been quite critical (and criticized), as well as unconventional when referring to issues of strategy. In fact, he has raised the decline of strategic planning in one of his best-known works, and identified three false premises or fallacies about strategic planning:
- The prediction fallacy: the future environment cannot be predicted, since it is impossible to predict the behavior of competitors. The fallacy of independence: the formulation of the strategy cannot be separated from the management process; a planning department cannot capture all the information necessary for strategic formulation. Nor should it be a periodic formal process, but rather a dynamic process. The formalization fallacy: formal strategic planning procedures are insufficient to cope with constant changes in the environment. To do this, organizations need informal systems and must promote learning by combining thought and action.
According to Mintzberg, the strategic management school has two approaches: the normative, which recommends a method for developing a strategy, is devised by experts and then put into practice by workers; and, on the other hand, the descriptive approach that refers to how strategies are created or formed and assumes that the formulation and execution phases interact and recreate. It states that companies do not deliberately create their strategies, but rather arise from their activities.
f) Arnoldo Hax: For this renowned Chilean academic, the company's purpose and mission define its policy, strategy is the application of said policy in the environment, and tactics are the means of applying the strategy.
For Hax, the competitive strategy is related to the following:
- It is a coherent, unifying and integrating decision pattern. It determines and reveals the organizational purpose in terms of long-term objectives, action programs and priorities in the allocation of resources. It selects the business of the organization or those in which it will be. It seeks to achieve a long-term sustainable advantage in each of its businesses, responding adequately to the threats and opportunities in the environment of the firm, and the strengths and weaknesses of the organization. It covers all the hierarchical levels of the firm (corporate, business and functional).Defines the nature of the contributions, economic and non-economic, that it intends to make to its associated groups.
g) Jack Trout: He is the author of the concept “Positioning” so well known in marketing, which is interpreted as the “place” that a client's brand or consumer's mental perception has, which constitutes the main difference between this and its competition, and also the product's ability to alienate the consumer. In a recognized text, this author specifies the importance of strategy in business, and describes it as the main factor of success. He even goes so far as to argue that having the right people, adopting the right attitude, using the right tools, following the right models or having the right organization are factors that help success, but they will always be subject to the essential: having a correct strategy,which will ultimately allow a certain company to achieve excellence. Trout proposes eight ways of understanding the concept of strategy, focusing it on marketing:
- Strategy is a matter of survival: the only way to survive is to outline a strategy and constantly communicate it to customers, employees, and shareholders. Strategy is a matter of perceptions: the success or failure of the strategy essentially depends on the good or bad understanding the five most important elements that make up the positioning process (brain capacity is limited; brains abhor confusion; minds are insecure; minds do not change; and, minds increasingly lose their perspective on brands). Strategy is a matter of being different: differentiation is the key to distance yourself from the competition, as the author commented in his book "Differentiate or Die". Strategy is a matter of competition: to succeed,a company must look at the competition. You must look for your weak points and attack them with the marketing weapon. Trout classifies, in homologation to the military world, different types of "wars" to explain this point of view (defensive warfare is the one used by market leaders; offensive warfare is the strategy of companies number two or number three; Minor contenders or newcomers trying to step foot into a category while avoiding the battlefront follow a flanking war strategy, and use the element of surprise; finally, guerilla warfare is the domain of smaller companies.) It is a matter of specialization: specialization is the ideal to which many brands that do not compete on a global scale tend.The companies that will have problems will be those in limbo, that indefinite medium field in which they are not big enough to compete with global ones, nor flexible enough to compete with specialists who are smaller. The strategy is pure Simplicity: Complicated strategies, like complex battle plans, are doomed to failure. The holy grail is simplicity. According to Trout, research can confuse the individual, so the author only believes in certain kinds of research and also in not being dazzled by the data and trusting instincts. The strategy is purely a matter of leadership: the disconnect between high management and the market is one of the biggest problems of large companies.Trout advises that we focus on the customer's mind and follow our instincts. Once a strategy is in place, some time must be allowed to develop. Leaders must possess the qualities of good generals: they must be flexible in adjusting the strategy to the situation, they must have courage, they must attack when the time comes, they must know the facts to outline their strategies, and lastly they also need to have something of luck and knowing how to exploit it. The strategy is purely a matter of reality: according to Trout, in reality, it is not always worth growing up, although it is certainly sometimes good to explore new ideas that can be better. Advises that, although CEOs may not be able to do all that is expected of them,at least they know the reality of the market and do not accept any project that the marketing department presents to them. As an example, he states that when a company is large and successful, it looks suspiciously at all inventions that do not respect the main product. IBM did not want to move to small computers, nor General Motors to small cars. Big companies don't realize that these inventions can be improved upon to become the kind of milestone technology.Big companies don't realize that these inventions can be improved upon to become the kind of milestone technology.Big companies don't realize that these inventions can be improved upon to become the kind of milestone technology.
One of the ideas of the author that I rescue the most is the following: “it is not the strategy that should dictate the tactics that must be used. Rather, the strategy should be developed from the bottom up and not from the top down. Tactics should define strategies or, in other words, communication tactic should dictate marketing strategy. A tactic is a competitive mental angle, that is, a differentiating element. The strategy on the other hand is not an end, but the way, a coherent direction for marketing ”.
h) William Duggan: the author makes a distinction with respect to ordinary intuition, arguing that strategic intuition resembles a glow that clarifies the mind and allows us to see clearly what to do. This, in my opinion, may seem somewhat difficult to understand at first sight by the same definition of intuition, but conceptually in our language it can be related to at least two meanings:
- "Faculty of understanding things instantly, without the need for reasoning." "Intimate and instantaneous perception of an idea or a truth that appears evident to those who have it."
In my opinion, it is the second definition that is closest to the spirit that the author wishes to instill: in his text he is not saying that by intuiting reasoning is dispensed with, but rather refers to the perception that certain people, as a kind of "natural gift", to understand the advantages or disadvantages about a certain idea. While Jack Trout explained the different principles for understanding strategies in a more structured and analytical way, William Duggan, while prone to the idea that strategic intuition is more like a "spark of insight" that brings together elements of the past in our minds to find a solution to a problem never known before. They seem irreconcilable points, but I see that there is a common point:that this "spark" as the author calls it is determined by a leader's ability (remember that Jack Trout also referred in one of his eight principles that "strategy is pure leadership").
Duggan analyzes the history of Napoleon a lot, its forms of tactical and strategic analysis, and tries in a certain way to standardize the strategic thinking that has been obtained by intuition (in the sense of natural gift) with the business world: “the flash of Insight into strategic insight is formed from diverse elements, many of them outside the scope of the person concerned. And this is precisely what makes those flashes so much more intense when all the pieces come together. ”
The author, based on the historical analysis of Carl von Clausewitz, refers in four steps to how flashes of insight occur (which according to Duggan is the essence of strategic intuition): examples from history, tranquility of spirit, the flash of insight in itself and resolution.
- Examples from history: what we call 'expert intuition' falls on experience itself, while strategic intuition is not so restricted, but is nourished by the experience of many others. Peace of mind: the mind is freed from all expectations and preconceptions that your mind may hold, and even your own mind, empties itself of the objective it pursues. The flash of insight: in a liberated mind, elements selected from various examples from the past come together in a new combination. As an example, Napoleon knew military history, but did not know beforehand what elements were going to come together in his mind at that precise moment. Resolution: not only do you see what you have to do, but you are prepared to do it. The flash is accompanied by the force that prompts you to take action.This is a transcendental component, because the first thing that can happen is that someone important laughs at your own face. Resolution is needed to step forward and put into practice what the flash of insight advises to do. Basically, the author relates it to perseverance and self-confidence in the leader's gifts.
In my opinion, what I find novel about William Duggan's proposal is that he makes a historical comparison between two students of strategy. On the one hand with Carl von Clausewitz (of whom already it was exposed about the flashes of insight), and with a direct collaborator of Napoleón, with the baron Antoine Jomini.
While von Clausewitz talks about strategic intuition, Jomini develops strategic planning. Jomini's basic thinking about strategy can be summed up in three steps:
- First you have to determine where you are (point A). Then you have to decide where you want to be (point B). Finally, a plan is drawn up to go from point A to point B.
In this formulation you can recognize the same type of strategic planning that most companies work with today. The three steps of Jomini's strategic planning are completely different from the four steps of von Clausewitz's strategic intuition. However, the two authors claim that their theories derive from Napoleon. Is it possible that both are correct?
For Jomini, it is won because they have more forces than the enemy at the target point. For von Clausewitz, it is won because they have greater forces at the decisive point. In Jomini's vision the goal is chosen first and then a plan is drawn up to achieve it. According to von Clausewitz, you don't start with a preconceived goal, you trust in the intuition and in the conditions of the leader.
In his memoirs, Napoleon supports in his own words von Clausewitz's theory: “The art of war consists, with a numerically inferior army, in always having more forces than the enemy at the point that must be attacked or defended… It is a Intuitive way of acting that constitutes the genius of war ”.
Napoleon needed a superior force wherever the battle took place. That was his turning point. He did not mark an objective point and directed his army towards it. However, Jomini's three steps were much easier to understand than von Clausewitz's four. The North American army embraced Jomini's three steps, and when this army was divided in the Civil War, both sides followed Jomini's ideas. This explains the terrible and bloody battles that took place, as both parties chose the same objective and marched impassively towards it. The same happened in the type of battle that prevailed in World War I (bloody trench warfare to gain a few meters, often without any strategic importance). Only in World War II, armored general George Patton,Military leader and firm admirer of von Clausewitz's ideas, he managed to change this evolution of battles.
From William Duggan's proposal, and based on everything he explains in military and historical terms, it is deduced his intention to emphasize the importance of the decisive points of where, how, when and with what resources to compete with adequate strategies, more than forming objectives and goals in advance that can mean a fight without quarter with a certain competitor, which would not guarantee success. Determining these decisive points attributes it to unmatched conditions of well-informed and prepared leadership, which would motivate intuitive decision-making.
In fact, Duggan allows himself to criticize Porter's ideas regarding the Competitive Strategy: “Porter fails to explain how strategic ideas really arise. The analysis gives you a deep understanding of the situation facing the sector in which a company operates. But it doesn't give you an idea of what to do about it, because strategic analysis is not the same as formulating a strategy. ”
I agree with Duggan's point regarding the previous review. If we link this and compare it in detail with a text proposed by Michael Porter, we can see that the latter has really dedicated himself more to showing what happens or fails when there are no strategies, to the detriment of delivering some practical initiative that makes it easier for us to understand the formulation in the design of these. Given that Porter's article is focused rather on explaining the strategy-differentiation relationship, I am left with a particularly empty space since it does not refer in detail to how to design a strategy, but rather has delved into analyzing the problems caused by the absence of it in the company. However, I do not agree with Duggan if he wanted to generalize his proposal,given that with your contribution I think that you are certainly giving us a hypothesis regarding the “creative spark of the strategies” (intuitive), coupled with good leadership to carry them out, but I believe that they cannot be generalized based on historical facts of people who lived in unique - and perhaps unrepeatable - circumstances in history.
In summary, I think Duggan's proposal is quite interesting in terms of the possibility of considering that the strategies are not born exclusively from a scientific analysis or prior planning, but that the innate can also be given as a causal factor, but I consider this rather exceptions to the rule. We must remember that history is also full of similar cases in all disciplines and arts: sports, singing, mathematics, philosophy, Nobel prizes, etc., and even cases in which someone who has formally studied a discipline is sometimes less advantageous than someone with a privileged brain, or with a special gift. In short, I see the bias in Duggan's contribution in terms of its extension and application, and may lack external validity.
i) Michael Porter: according to this well-known academic, the strategy is a unique and valid position, considering a different system of activities. It is choosing what to do and what not to do, which markets to enter and which ones not. It is not possible to cover all the markets and all the positions simultaneously, but the strategy implies choosing a path, leaving aside other options. It is necessary to highlight the difference between strategy and operational effectiveness. The latter is based on the efficient development of the processes we carry out (through methods such as reengineering, total quality) and not on the determination of a unique and differentiating course. If companies only compete from an operational improvement, they follow a path that leads them to "competitive convergence",where everyone competes in the same way and in the same dimension. The strategy should be considered as the discovery of new business models, not products. The most important thing is to change the mental model and play a different game. As an example, something different may be complementing each other in order to compete; a case of accessories are the cinemas with the Blockbaster videos, from the same town, where both are located within a radius of no more than 3 kms. Taking classical strategy theory would be substitute products, and competing for the same customers. But when getting a ticket for the cinema, a discount coupon is delivered for the video club, and in this way they share the market.The most important thing is to change the mental model and play a different game. As an example, something different may be complementing each other in order to compete; a case of accessories are the cinemas with the Blockbaster videos, from the same town, where both are located within a radius of no more than 3 kms. Taking classical strategy theory would be substitute products, and competing for the same customers. But when getting a ticket for the cinema, a discount coupon is delivered for the video club, and in this way they share the market.The most important thing is to change the mental model and play a different game. As an example, something different may be complementing each other in order to compete; a case of accessories are the cinemas with the Blockbaster videos, from the same town, where both are located within a radius of no more than 3 kms. Taking classical strategy theory would be substitute products, and competing for the same customers. But when getting a ticket for the cinema, a discount coupon is delivered for the video club, and in this way they share the market.Taking classical strategy theory would be substitute products, and competing for the same customers. But when getting a ticket for the cinema, a discount coupon is delivered for the video club, and in this way they share the market.Taking classical strategy theory would be substitute products, and competing for the same customers. But when getting a ticket for the cinema, a discount coupon is delivered for the video club, and in this way they share the market.
On the other hand, it is necessary to understand that the basis of the strategy is to understand the concept of “value migration”, to know to which markets value migrates, what it is that gains and loses value, based on changes in the preferences of consumers.
j) Philip Kotler: this renowned academic and author branded as the “father” of modern marketing has several texts to his credit, and considering that he focuses mainly on the advances in marketing, we can induce that it is directly related to competitive business strategies, since what it raises is generally linked to "what to do" within a customer-focused organization. Kotler has defined marketing in the following terms: “It is the business administration technique that allows anticipating the structure of the demand of the chosen market, to conceive, promote and distribute the products and / or services that satisfy and / or stimulate it, maximizing at the same time, the company's profits ”. In my opinion, and based on Kotler's own description,This "anticipation of the demand structure" necessarily requires competitive strategies. Likewise, the conception, promotion, distribution of products and / or services, customer satisfaction and / or stimulation, and the maximization of profits - all concepts implicit in the definition of marketing - also require conceiving, designing, executing, controlling and adapt competitive strategies, which are clear, shared by the entire organization, distinctive and innovative, and which allow the fundamental purpose of marketing to be fulfilled within a given business model, area of the organization, or the company in general. Another definition that Kotler makes about marketing is "the social and administrative process by which groups and individuals satisfy their needs by creating and exchanging goods and services."
Considering the changes resulting from globalization and the crises that have occurred in recent years in world markets, Kotler offers us 7 strategies that he considers “winners” in the face of these new scenarios and in view of the fact that the markets are increasingly competitive, since They have been tested in different business models and have shown that they can provide us with strategic models to take into account to be implemented:
- Low-cost strategy: it is not just a matter of reducing some costs, but of applying cost reduction in almost all areas of the company, but without deteriorating the expectation that the client himself has, nor the essence of the business itself, considering Two important points: be resourceful and introduce a good dose of creativity in this process; And, make the most of the benefits of the entire business model that works, without discarding aspects of that same model that could be taken advantage of by the closest competitors. Create a unique consumer experience: another strategy that has been proven to work - and it is a safe bet if it can be carried to term-, it is to focus on getting the client to live an exceptional, unique experience,different and that will make you willing to pay even more money for a product or service similar to what you can find in the competition (examples: Harley-Davidson motorcycles; Starbucks coffee shops). Reinventing our business model: on many occasions Kotler tells us, we strive to improve our product or service, adding features, functionalities, flavors or textures and yet we do not achieve the intended objectives. There are times when all this does not work and, before continuing on the same path, it is advisable to stop and consider what is the true business model that we undertake and try to reinvent ourselves, not focusing on doing better but doing it different.Offer maximum product quality: penetrate the consumer's mind and leave a brand footprint,It is the objective of any marketing department, although that destination has different paths, and one of them is to associate our brand with the image of quality, so that just by thinking about it, the client does not need us to provide more information about it. There are customers who want the best and only the best, and if we give it to them we will have captive customers and addicts to our brand. Focus on niche markets: Another way to maximize the probability of success is to focus on niche markets. This is not new, however we see how many companies today have not yet learned that this approach exists and try to sell to everyone, finally managing not to sell to anyone.in some companies this is a maxim that persecutes them in any approach because they have assumed it as one of their competitive advantages, and if we wanted to give this concept a name, Sony is one of the brands that we could say has adopted this principle with more assiduity over time. If the client perceives that our brand is constantly launching products that represent a step forward, it associates it, and reinforces it against the competition. And this does not mean that we are only talking about technology products, but that it is applicable to any sector and any type of company. Being the best in design: this strategy is based on something as simple as there are a type of people who not only like and prefer, but need, to be around and live with devices and elements that are well designed.It is a reality and we must take advantage of it, since there is a market for products with design (Examples: Apple technology; Bang & Olufsen).
k) Charles Hofer and Dan Schendel: in an important text, these authors elaborate on the implicit concepts in the field of strategic administration, contributing with a different proposal regarding the general design of an organization, which according to them can be Described only if achievement of objectives is added to policies and strategy as one of the key factors in the strategic management process. Hofer and Schendel focused on the most representative aspects of the concept: goal setting, strategy formulation and implementation, and activities related to management change and achievement. From these concepts the strategic administration as it is known today is molded.
For these authors, the strategies are generalized dispositions of the actions to be taken to fulfill the general objectives; If there are no clear and well defined objectives, surely there will not be an appropriate strategy to achieve them. The strategies proposed must contemplate the use of resources necessary to carry out the activities that will lead to results, and must take into account how these resources will be obtained and how they will be applied to increase the probability of success.
l) Robert S. Kaplan and David P. Norton: For these authors, strategy is not just a management process, or at least it should not be. There is a continuum that begins, in the broadest sense, with the mission of the organization. The mission must be translated so that the actions of individuals are in line with and supportive of the mission. A management system must ensure that this translation is actually carried out. The strategy is a step in a continuous logical process that moves an organization from a high-level mission statement to the work done by front-line and core services employees.
I consider it propitious to delve into what was stated on page 4 of this work, in relation to the fact that I visualize that the strategy necessarily entails a "commitment" of a horizontal nature and of a participatory nature in people. The same authors, Kaplan and Norton (creators of the Balanced Scorecard) refer to this in an important text in the following terms: “Executives should use communication processes similar to those used in introducing new products when launching their new strategy. Processes start with learning (creating strategic awareness), and are followed by ensuring that employees understand the message (mentally sharing the strategy), ensuring that they believe the strategy is being followed (loyalty to the strategy), and finally,determine how many teach strategy to others (become a missionary of strategy). As with their customers, companies can measure each of those moods and engagement. Companies should authorize budgets to communicate and train their employees, in the same way that they commit to advertising and promotion expenses for new products ”.
3.- Business strategy and competitive advantage
As a definition, the business strategy is "the set of commitments and acts, integrated and coordinated, that the company uses to achieve a competitive advantage by exploring its core competencies in certain product markets."
In marketing and strategic management, competitive advantage is an advantage that a company has over other competing companies. To be truly effective, a competitive advantage must be unique (differentiating), possible to maintain (including the concept of viability, being able to be modified and / or adapted to conditions), clearly superior to competition (aiming for excellence), and applicable to various market situations (versatility condition).
Senior management requires capitalizing on attractive opportunities and facing challenges by strengthening the competitive strategies of each of the businesses. This requires deciding:
- "Where to sell competitively", selecting the competitive area. "Where to compete", defining the terms of the competitive war. "How to sell competitively", deciding the strategy to develop sustainable competitive advantages in each of the functional areas of business.
To decide where to sell competitively, companies should review their strategies to select the most attractive markets and the products in which they are most competitive to ensure their viability and improve their profitability. In the new competitive environment, the most successful companies thoroughly review their strategies, selecting the segments of the national and export markets and the product lines in which they can develop a stronger position in the face of growing national and international competition. Now it is more important to determine in which markets and products you are more competitive and in which you are not, and accordingly guide marketing programs and investment projects.
To decide what to compete in, companies must review their strategies to define the nature of competition itself, even taking it internationally. The traditional competitive game has been to compete on the basis of "standard" quality products at a reasonable price. However, the new competitive environment is changing the key factors for success in many industries, as it has now become more important to sell a wide range of high quality products, at competitive prices and with a good level of customer service. Many companies introduce “total quality management” programs in order to improve the quality of their products by introducing statistical process control, establishing quality circles and managing customer-supplier relationships in all areas of the company,seeking to achieve international quality standards in its products. In order to sell at competitive prices, some companies have introduced cost reduction and productivity improvement programs to ensure a low cost structure. Other more aggressive companies have achieved greater reductions in costs, restructuring their operations through developing reliable suppliers, closing unaffordable lines or plants, expanding and modernizing their production processes in the most efficient plants, and optimizing the logistics of distribution of their products.Other more aggressive companies have achieved greater reductions in costs, restructuring their operations through developing reliable suppliers, closing unaffordable lines or plants, expanding and modernizing their production processes in the most efficient plants, and optimizing the logistics of distribution of their products.Other more aggressive companies have achieved greater reductions in costs, restructuring their operations through developing reliable suppliers, closing unaffordable lines or plants, expanding and modernizing their production processes in the most efficient plants, and optimizing the logistics of distribution of their products.
In order to be able to offer a good level of service to their clients, some companies have improved their programming and control processes for production and inventories of finished products. Other more aggressive companies are developing close relationships with their customers through computerized systems that allow them to plan and control their customers' inventories and purchases. They have also introduced “just-in-time” and “flexible manufacturing” delivery systems, allowing them to provide a distinctive level of service to their customers and thus create an effective barrier against domestic and foreign competitors without having to resort to war. of prices. Companies also compete by offering attractive financing plans to their clients. For example, auto companies like Chrysler, Ford,General Motors, Nissan and Volkswagen developed their own companies to promote their sales by offering their clients various financing plans, including financial and operating leasing and self-financing, in a wide variety of plans in terms of amount, rate and terms. But, most importantly, the most internationally competitive companies improve at the same time in several key factors for success in their industry. In other words, they do not trust themselves to be competitive only in one factor such as price, but they reinforce their competitiveness in all the key factors: product range, quality, price and customer service. For example, Carplastic managed to increase its sales from zero to more than $ 180 million dollars, mostly exports,through a significant increase in its production and sales volumes, an increase in the degree of integration in car dashboards, continuous improvements in product quality (Ford Q1 award), cost reduction and delivery management “Just in time” for shipments to auto plants in the United States.
In deciding how to sell competitively, companies can only develop long-term sustainable competitive advantages in key factors for success in the industry, such as broad product range, high quality, low price, and good customer service, through reinforcing its business system, introducing improvements in each of the functions of marketing, distribution, production, supply and technology.
In marketing, companies - particularly food manufacturers - are reviewing their plans to improve positioning both in current product lines and in the introduction of new products and in launching aggressive promotional and advertising campaigns in distribution channels.. Various companies are reinforcing their plans and sales forces in a wide range of consumer and industrial product industries. For example, several capital goods manufacturers have reorganized their commercial area by market and reinforced their sales force to strengthen their promotion with important clients in the industry.
In distribution, consumer goods companies are improving the productivity of their sales force and the efficiency of all their distribution logistics, including the programming and control of primary distribution - from the plant to the distribution centers -, and the secondary - from the centers to the distribution channels.
In production, companies are carrying out capacity expansions and integrating total quality programs, improving productivity, reducing costs and improving service, and introducing the concepts of "flexible manufacturing" and "just-in-time deliveries" for production. and for the supply of suppliers. This type of programs is mainly observed in all those classified as "highly exporting companies".
In sourcing, companies are re-evaluating their traditional sources to improve the quality, cost and reliability of supply, and for this they are developing their current suppliers and new national and foreign suppliers. For example, the work of terminal automotive companies such as Ford, Chrysler, GM, Volkswagen and Nissan stands out, in the development of auto parts manufacturers for national supply and, above all, for international supply.
In technology, traditionally it had not been given all due importance since it was acquired from foreign companies. However, now technology has gained new value, because innovation has become a key competitive factor, and companies are beginning to reinforce their technology to develop new products and optimize production processes permanently. For example, in the automotive industry, once again exporting auto parts manufacturers have introduced new systems for the statistical control of production processes, improving the quality and productivity of components and spare parts for domestic and export sales.
4.- Summary and conclusions
We have seen over time how different authors, academics, specialists, and scholars on issues of strategy, and particularly on competitiveness, have been "educating" us about new trends and models in "what to do."
From the particular vision of Peter Drucker, who practically was the mentor of the term "strategy" for the business world, different schools and visions have written a lot about it. In fact, when we investigated in one of the most famous search engines on the internet –Google-, we found the term “strategy” with approximately 851 million results. Meanwhile, the term "business strategy" -only in this same search engine- appears 918 million times. This helps us to understand the wide range of bibliography that exists on the subject - by the way, some more useful and truthful than others as information - and that to this day different authors do not always deliver with the same concepts and visions.
Considering the dizzying technological advances of the last decades, the growing innovation in other fields and disciplines, the different and growing commercialization in world markets as a result of globalization, the constant changes in consumer preferences and tastes - due to their different mentality, changes in cultural and social customs-, we can see that it can even be considered as “logical” that there are so many trends and thoughts about the competitive strategic issue in business, and this would be explained by how people and technology change That surrounds us naturally changes the ways in which we try to answer the permanent questions that we have asked ourselves regarding the organized way of marketing (where, in what, how).
Particularly, Porter's proposal is shared regarding the main characteristics of sustainable competitive advantages, which refer fundamentally to strategic positioning (causing differentiation) and operational efficiency (doing the same but better). However, operational efficiency, in Porter's own words, should not be confused with strategy: “Another mistake managers make is confusing operational efficiency with strategy. Good operations can drive performance, but the problem with best practices is that everyone imitates them. The real challenge is that one must do both at the same time: it is necessary to continue with the best practices, and at the same time to solidify, clarify and increase the unique positions ”, he stated. And adds:"Management tends to allow gradual improvements in operations to affect the larger strategy, which is the construction of a unique position that ensures competitive advantage. To prevent this from happening, you have to have that advantage in mind at all times. At each meeting, when making each decision, it should be clear whether it is an operational best practice or something that will contribute to strategic differentiation. ”
In this way, it is clear that Porter's intention is to separate the concept of good performance from that of strategy formulation, which is what allows us to be unique. Mistakenly, many executives confuse doing things well and even improve them and attribute them to a good achievement of strategies that they have designed. This is not strategy. In my opinion, the strategy will consist of that management that allows the organization to be unique or exclusive in what it does, and to print its own stamp.
In our opinion, companies that do not apply clear strategies from the start will only be drifting, waiting for the wind to take them to port. The strategy of a company should be its main guide, but not for that reason should it be on paper only as a letter of intent, but actually represent a kind of "corporate constitution" that is known by levels, is carried out, is executed with tactics as far as possible also innovative, and that are original from their conception to create in the conscience of the consumer the idea of novelty, that allows them to recognize the seal and brand identification of the company that makes it possible to put these strategies into practice with the distribution products or services.
Particularly noteworthy is the leadership-strategy relationship, given that the best design, acquisition, execution (implementation), monitoring and control of a company's strategies could be carried out more effectively if a lower turnover of high-level executives is maintained.. The ideal is that when executive changes exist, they only occur when they have not been faithful in obtaining expected results from strategies for which they have been responsible, given that if their estrangement from companies is due only to personal or economic considerations, years of professional expertise, strategic knowledge of competitors and of the company itself are lost, which can be used by the market,but they could in some way harm the continuity of unique strategies in companies that obtained good results and that have shown leadership in terms of differentiation.
What best summarizes Michael Porter's thinking about the importance of strategy is the following sentence from an article: “Strategy is about discovering how to be unique, exclusive, unique. Not because it is the best way to compete, but to offer a value that the competition cannot match. ”
It can be induced that the best sustainable competitive advantage is in the people, and that is why they have to be constantly learning and understanding change. Leaders must make sure of this and be open to change. They must know that change is the only thing that guarantees their success, and in this sense they must keep learning all the time, focus on the new, accept and share innovations and make sure that all team members collaborate with creative ideas at all times. Reward good ideas and make this process a constant practice.
Bibliography
- Dictionary of the Spanish Royal Academy, version No. 22 (2001). Jack Trout on Strategy, McGraw-Hill Editorial (2004). The Organization focused on Strategy, Robert Kaplan and David Norton, Editorial Gestión 2000 (2001). Trendmanagement MBA Notes in Marketing and Business Management, International School of Business Management, ESEM, Spain (1999-2000).WikipediaGoogle
