STRATEGY

STRATEGY
Strategy allows a business to sustain its competitive advantage over time. Michael. E Porter claims that an organisation can do better than its rivals if only it can establish an advantage that it can preserve, this can be done by delivering products at a reduced cost, delivering great value to customers or doing both (1996). Strategy can be defined as “the match an organization makes between its internal resources and skills, and the opportunities and risks created by its external environment” (Grant, 1991).

This is a definition that takes into account both internal and external factors and the relationship between an organisations resources and opportunities or risks that might come about as a result of its ever changing environment. As said on my previous post for Strategy and improving on that post, my understanding of strategy is a set of activities an organisation carries out to ensure its goals or objectives are achieved by effectively managing its assets and giving considerable thought to external factors.

Knowledge Management, a useful tool for organisations can be employed in such a way as to provide the organisation with a competitive advantage. It is therefore necessary that the Knowledge Management strategy of an organisation be closely aligned with the overall business strategy. If this is done, it will produce a substantial result to the organisation as a whole. This could be done by making the knowledge management strategy a sub-strategy for the business strategy. What I mean by this is making the knowledge management strategy in such a way that its success aids in achieving the organisations business strategy.

Using Abercrombie & Fitch as a case study, it would be helpful to see how such an organisation employs strategies and what type of strategies it employs. Although Abercrombie does not have an advertising campaign, they pride themselves in the brand name and the shopping experience customers get from visiting their stores shoppers all around the world get the same experience when visiting different stores as all the stores are set up in the same way. Some of the ways they have chosen to stand out from their competitors such as American Eagle Outfitters and Gap are the shirtless men in front of their stores and the girls dancing inside. The stores are also very dark inside with very loud music playing and fragrance is sprayed throughout the store and on the merchandise. Although this condition is not ideal for the older generation, it is ideal for their target age group (16 – 35). A lot of money is also spent in employing overnight staff to ensure the merchandise is folded to perfection to give the feeling of luxury to otherwise casual clothing. The feel a customer gets from the store is unique to Abercrombie and with an annual revenue of 3.7 billion dollars in 2008, it is obvious their strategy is working.

An argument that arose during one of the seminar classes was whether strategy was always long term or could it also be short term? After extensive research and reading, I can say that strategy need not always be long term as the objectives for a short term strategy might be the building blocks for a long term strategy. This obviously depends on the changing external environment.


REFERENCES


· Grant, R.M. (1996), “Toward a knowledge-based theory of the firm”, Strategic

Management Journal. Vol 17.
· M. Mazucatto (2002). “Strategy for business”. The open university press. London
· Porter, M.E. (1996), “What is strategy?” Harvard Business Review,

November/December, pg 61-78