Leadership in strategy formulation Assignment Example | Topics and Well Written Essays - 750 words

Leadership in strategy formulation - Assignment Example .As the headline itself suggest, the article is an effort to emphasise the crucial role of leadership in strategy formulation and implementation. It has been pointed out that ‘strategy’ as such has undergone a change over the years and in today’s context the market forces play a key role in influencing strategy formulation.It has also been stated that, â€Å"†¦.Strategy must be a dynamic tool for guiding the development of a company over time†. This implies that strategist must be constantly on the watch regarding the process of implementation. In addition, in order to come out with desired results, the strategists must also monitor the policies being adopted by companies in the competition. Michel Porter, suggested that a company could gain sustainable competitive advantage provide it follows any of the three generic strategies, namely; If the company is able to become the lowest cost producer of the product or service in the industry and is able to e ffectively pass it on to the customers, then it can very well acquire the cost leadership. To support the argument Montgomery has cited the example of Ryan air, a successful low cost airline. Ryan air started off as a full service airliner priced at less than half the fares of rival companies, but soon realised that in order to make inroads into the customer base of rival companies it has to do something innovative on prices front, and thus converted to no-frills, low cost airline. Product or Service Differentiation: The article too emphasises the importance of product differentiation in order to be able to do successful business, gain profitability and establish a brand identity. Montgomery points out that this has been possible with the infusion of economics into strategy formulation. In this strategy, companies try out efforts to offer some pleasant surprises to the customer. Some innovative features are added to the product or service so that the customer could perceive some uniqueness in the product or service. Montgomery cites the example of IBM, when its CEO solicited views from the employees of IBM on; If our company disappeared tonight, how different would the world be tomorrow Is there something about our company that makes a unique contribution to the world The article further emphasises that, "It (strategy) has become more about formulation than implementation and more about getting the idea right at the outset than living with strategy over time". This statement depicts the dynamic and evolutionary nature of strategy formulation. The rapid pace, with which changes are taking place, makes it pertinent on the part of the strategists that they should formulate the strategy in such a manner that it can deliver the optimum benefits to the company the very first time itself. Because, once the strategy is known to competitors, they are bound to come out with a counter-strategy. As has been elaborated in the article itself that while gaining depth, the strategy has lost breadth, which implies that the strategy has become more focused towards its objective/s. 2. How do these three current views of strategy - the RBV(resource-based view), strategy positioning and emergent theory - fit with Montgomery's idea that strategy must be a "dynamic tool "and needs to be "lived with over time". Three current views of strategy include, the Resource Based View (RBV), strategy positioning and emergent theory. RBV is a method for analyzing the strengths and weaknesses of the company. Such a view helps in explaining the competitive edge of the company based on the resources and capabilities of the company. For the purpose of RBV analysis, resources for a company can be classified in three broad categories, namely tangible assets, intangible assets and organisational capabilities. Positioning of the strategy is another crucial aspect which determines the success or failure of the strategy. It is