Strategic Management in a Dynamic Environment

Assignment Brief

MGMT660 – Strategic Management in a Dynamic Environment

Course Description

This is the capstone course of the core management curriculum that unites the various functional subjects taught in a business school. The center of attention in the course is the total enterprise perspective in a dynamic business environment. It is designed to integrate knowledge of the functional areas of business with the design and execution of competitive strategies. Strategic management requires the application of strategic intelligence and competitor analysis to shifting economic conditions, industry forces, business practices, and managerial variety. The focus of the course is decision making that results in competitive advantage and long term growth potential for the enterprise. Towards that end, strategic audit methodologies and procedures are introduced to analyze environmental variables external to the firm, and their impact on internal resources, capabilities, and management practice.

Course Learning Outcomes

Upon completion of the course, students should be able to:

1. Apply strategic management theories, frameworks and various analytical tools to formulate strategies at corporate, business, and functional levels.
2. Create a real-world strategic audit of an organization with focus on the environment in which the firm operates and the industry in which the firm competes.
3. Analyze inputs from organizational analysis to formulate realistic strategic alternatives and propose methods and procedures for effective implementation of strategic plans
4. Apply research methods to gather organizational information/data and write business reports with appropriate content, substance, and documentation.
5. Deliver multi-media business presentations to executives in a professional manner.

Sample Answer

Introduction

Strategic management is essential for organisations seeking to achieve long-term success and competitive advantage in a rapidly changing business environment. Over time, several strategic management frameworks have been developed to help firms analyse their position, make informed decisions, and implement effective strategies. This essay compares two widely used frameworks: Porter’s Five Forces and the VRIO framework. The discussion evaluates their relevance, strengths, and limitations, using real-world examples to illustrate their practical application in strategic decision-making. By comparing these approaches, this essay highlights how organisations can use them complementarily to guide strategy formulation and sustain competitive advantage.

Porter’s Five Forces Framework

Developed by Michael Porter in 1979, the Five Forces framework offers a tool to analyse the competitive environment of an industry. The model identifies five key forces that shape the intensity of competition and profitability: the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and industry rivalry. This framework enables managers to understand external pressures and to position their firm effectively within the market.

A key strength of the Five Forces model is its structured approach to industry analysis, which allows companies to anticipate changes and devise strategies accordingly. For example, in the airline industry, high bargaining power of customers and intense rivalry contribute to low profit margins. Firms like Ryanair have responded by adopting a low-cost strategy, focusing on operational efficiency and price competitiveness.

However, one major criticism of the Five Forces framework is its static nature. In today’s dynamic global markets, industries evolve rapidly due to technological innovation and globalisation. The model also underplays internal factors, such as resources and capabilities, which are crucial in shaping a firm’s success. Furthermore, it assumes that industry structure determines profitability, which may not always hold true in sectors disrupted by innovation, such as the technology industry.

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