My thoughts on the role of strategic thinking in my experience
Strategic thinking applies innovation, strategic planning, and operational planning in developing business strategies. Innovation is the process of developing something new or improving on an existing product or service. All businesses need to innovate to respond to market dynamics or serve customers better. A business strategy requires some measure of innovation to address strategic issues such as how to help new customers or pricing a product to compete (Graetz, 2002). Strategic planning, on the other hand, is a management activity for setting priorities, resources, strengthening operations, and engaging stakeholders to work towards a common goal. Operational planning is the process of developing strategic goals and transforming them into tactical goals or short-term deliverables designed to achieve a broader strategic aim. The objective of operational planning is to address questions such as where the organization is, where it wants to go, the means of getting there, and how to measure progress.
For any business, strategic thinking is critical for success. If a business is in a highly competitive market, it needs strategic thinking to address competition. Some of the most successful companies today achieved their progress through the application of strategic thinking (Graetz, 2002). For instance, Apple, which is one of the most successful tech companies in America, used the principles of strategic thinking to revive its business in the late 90s and early '00s. First, the company decided to invest in innovating new products and services. Secondly, it conducted strategic planning to align resources to a few priority areas. After that process, the company reduced the number of products and focused on a few. The final part was strategic planning that addressed short term issues such as how to fund innovation, how to attract new employees, retaining them, etc. The case of Apple shows that without strategic thinking, companies lose direction and decline.
Delegate your assignment to our experts and they will do the rest.
Given this information, I would approach strategic thinking in a very systematic way. The first part is to innovate, then embark on strategic planning and, finally, engage in operational planning. Those three elements address the issues surrounding a business holistically.
Prospect and challenges (reflections)
Starbucks & Dunkins has different operating philosophies, although they predominantly sell coffee. However, for Starbucks, its target market is the upscale buyer who is not price-sensitive. In the United States, the company owns a substantial amount of the stores, which increases its operating costs. Dunkins targets the ordinary coffee buyer and not necessarily high-income buyers. The result is that the target market for Dunkins is bigger. Also, Dunkins operates via franchises, which lowers operating costs. Franchisees fund the capital investments for new stores such as kitchens, dining equipment, and other investments needed to establish a new store. In an economic downturn, Dunkins might prove more resilient than Starbucks.
Disney and Planet Fitness have a very different business model. The former is involved in everything, ranging from films for entertainment in Disney world. The model serves the company well as a content producer. In large cities, Disney world is exciting places to visit for families. However, the experience sometimes involves dining, watching films, and engaging in sedentary activities. In modern society, where people spend most of their time mainly sitting passively in office or school, planet Fitness seeks to address a clear market need for people to remain fit. Therefore, in a world where obesity is a growing concern, Planet Fitness has a bright future.
Linens 'n Things (LNT) and Bed Bath & beyond (BBBY) are emerging big box retailers. The two companies were founded at the same time and follow a similar strategy. They focus on cost leadership while giving customers high-quality housewares, but with no frills (Nicknam-Retana, 2010). Nevertheless, the decision by LNT to establish more centralized warehouses brought the company into more direct competition with Target and Wal-Mart. In contrast, BBBY adopted greater decentralization in decision-making and therefore, at the local level, stores can customize their products to fit local conditions (Nicknam-Retana, 2010). BBBY has, therefore, successfully managed to differentiate itself more from mainstream retailers such as Wal-Mart. With such a clear strategy, the prospects for BBBY are brighter, given its approach of cost leadership and the ability to respond more to local customer tastes.
Netflix is an innovative company that pioneered a new way of watching films. The company started as a DVD rental company before investing in streaming movies only. A few years ago, the company producing its content, and the results were great. The model of distribution fits customer tastes, which is watching films on demand. The online streaming model is the future of watching movies and even TV. For Apple, the company developed innovative devices such as the iPhone, the first smartphone with colossal adoption. However, in the last few years, the company has not produced anything groundbreaking, and without innovation, the prospects of the company are bleak.
In the case study “Belmont Abbey College: Strategy Formulation in Turbulent Times” by Anderson and Roberto (2016), it is evident that the success of any business requires strategic thinking. The approach to strategic thinking helped Steve Jobs guide Apple from the brink of collapse to success.
References
Graetz, F. (2002). Strategic thinking versus strategic planning: Towards understanding the complementarities. Management Decision, 40 (5), 456-462. doi:10.1108/00251740210430434
Nicknam-Retana, F. C. (2010). Let's Take This Private: Linens 'n Things Versus Bed Bath & Beyond. Retrieved from https://hbr.org/product/lets-take-this-private-linens-n-things-versus-bed-bath-beyond/909M61-PDF-ENG
Roberto, R. A. (n.d.). Belmont Abbey College: Strategy Formulation in Turbulent Times. Retrieved from https://hbr.org/product/belmont-abbey-college-strategy-formulation-in-turbulent-times/W16357-PDF-ENG
