Corporate Strategy Essay Research Paper The 21st

Corporate Strategy Essay, Research Paper

The 21st century heralds business opportunities that transcend global barriers. The world witnesses volatile business models – what seems strategically appropriate today may be considered ‘passe’ or inapplicable in a matter of months. Before progressing further let us focus on the central task of critically analysing the statement at hand: “In a fast changing world where businesses are benefited by external forces, managers need to be enabled to respond capably, to keep the company on track and to meet its objectives. They must be outwardly focused, aware of important trends that will impact on business or industry. They need to be opportunistic aware without loosing the inwardly looking focus on doing things better and responding to threats.”

The underlined words/phrases draw one’s immediate attention and social scrutiny.

The interpretation of the word ‘fast’ has been exchanging over time periods. Circa 1900s, ‘fast’ change was deciphered as a change over a period of 10 years or so. As technology and society developed around the 1950s, fast change was relative to a change which occurred in 3-4 years. The last decade of 20th century witnessed a proliferation of scientific technologies and business trends and scenarios could alter in the matter of months. The world in the 21st century promises to be more dynamic than ever before and the term ‘fast’ shall invariably be redefined to a much shorter time-span than hitherto. In essence, business managers need to be aware that it is imperative to be on their toes, so to speak, and preempt the expectations and demands of the fast changing business environment.

The phase from the topic ‘businesses are benefited by external forces’ is controversial and debatable. It is agreed that the changing environment throws up opportunities for organizations to exploit. It is also agreed that if an organization exploits these opportunities then it can benefit. The assumption, thus, in the phase is that the organization will exploit the opportunity created by the environment and external forces. There are a plethora of incidents which indicate otherwise. External forces and environment alternatives have compelled many organizations and industries to down their shutters or made them uncompetitive. So, it is injudicious to conclude that external forces always benefit businesses. This brings us to the twin paradigm – ‘outwardly and inwardly focused’. The statement covers that an organization must be well aware of the environment, both outside and inside the organization. The outside or external environment refers to the Political, Economic, Social, and Technological (PEST) scenarios. Another component of the external environment is the competitors. The focus, thus must be on PEST and Competitor analysis. The internal environment refers to the organization’s strategic capability, that is, strengths and weaknesses. The stakeholders are also a part of the internal environment. Thus the focus must also be on analysing the strategic capability and stakeholder analysis.

The topic statement provides us with a strong guideline. The discussion must centre around the fast changing environment and its implications thereof to an organization. The organization must endeavor to conduct a strategic analysis (external and internal environment) to sustain. With these guidelines, let us further our discussion, with the aid of some local (Indian) examples.

“Strategic Analysis is conducted with the strategic position of the organization. What changes are going on in the environment, and how will they affect the organization and its activities. What is that those people and groups associated with the organization – managers, shareholders or owners, unions and so on who are stakeholders in the organization – aspire to, and what is expected for the future development of the organization.[1]

Based on this definition we can extrapolate that strategic analysis is a two pronged process.

As iterated earlier, external environment analysis attempts to analyze the PEST scenarios and competitors.

The internal environment analysis is concerned with the start capability (strength and weaknesses) and stakeholders.

External environment analysis answers some very basic, yet essential questions. It indicates the emerging trends in the environment and enables a firm to determine the responses to these changes in the environment. In other words, on environment analysis aims at evaluating the trends and events in the environment. These events and trends may figure out to be favorable or unfavorable from the firm’s standpoint. In essence, environmental analysis attempts to highlight the Opportunities and Threats that may emerge for an organization due to political, economic, social, and technological changes or events. An instance which springs to mind instantly is the Essar group. With the economic reforms in India, the power sector was opened to private investments. The government had promised several sops and concessions in order to abet private investment in this sector (economic change). The Essar Group, during this time was involved in setting up of a power plant that was to provide power for its own consumption. With the opening up of the power sector for the private participation, the Essar Group saw an opportunity. They promptly converted their power unit into a p