"The reason why firms succeed or fail is perhaps the central question in strategy" stated Porter. While traditional strategy approaches can soundly answer this central question in stable environments, these approaches are not directly applicable to dynamic environments and there is currently no final and complete answer that determines the causes for a company’s failure or success with their strategies in dynamic environments. Nevertheless, there are many examples of companies that outperform their competitors even in dynamic environments, such as Microsoft and Intel, and there are many examples of companies that have not been successful at all, such as Siemens and BenQ with their mobile phone division.
One critical point of each strategy is the strategic management process during which the strategy is developed and implemented and during which strategic tools such as the famous SWOT analysis or Porter’s five forces are used, for example, to structure or collect data. The purpose of this paper is to explore if strategic tools developed in stable environments are still suitable in dynamic environments or if there are certain constraints. Therefore, the paper builds on existing literature to develop a thorough understanding of dynamic environments and successful patterns of strategy in dynamic environments, and based on this understanding, an analysis framework is developed to analyze several strategic tools.
The new finding is that the use of strategic tools is still desirable in dynamic environments, but that there are limitations that must be considered to obtain useful results when using tools. This finding is used to develop a categorization of strategic tools and to propose a new framework for the use of strategic tools in dynamic environments.
Inhaltsverzeichnis (Table of Contents)
- 1 Introduction
- 2 Background
- 2.1 A Short Review of the History of Strategy
- 2.2 Strategy and Firm Performance
- 2.3 The Strategic Management Process
- 2.4 Dynamic Environments
- 2.4.1 Literature Review
- 2.4.2 Velocity
- 2.4.3 Complexity
- 2.4.4 Uncertainty
- 2.4.5 Unpredictability
- 2.5 Strategy in Dynamic Environments
- 2.6 Analysis Framework
- 3 Strategic Tools in Dynamic Environments
- 3.1 Literature Review
- 3.2 Basics of Strategic Tools
- 3.3 Use of Strategic Tools in Practice
- 3.4 SWOT
- 3.4.1 Basics of SWOT
- 3.4.2 Shortcomings of SWOT
- 3.4.3 SWOT in Dynamic Environments
- 3.5 Porter's 5 Forces
- 3.5.1 Basics of Porter's Five Forces
- 3.5.2 Shortcomings of Porter's Five Forces
- 3.5.3 Porter's Five Forces in Dynamic Environments
- 3.6 PEST Analysis
- 3.6.1 Basics of PEST Analysis
- 3.6.2 PEST Analysis in Dynamic Environments
- 3.7 Scenario Analysis and Forecasting
- 3.7.1 Basics of Scenario Analysis and Forecasting
- 3.7.2 Critical Factors of Scenario Analysis and Forecasting
- 3.7.3 Scenario Analysis and Forecasting in Dynamic Environments
- 3.8 Discussion of Findings
- 4 A New Framework for Strategic Tools in Dynamic Environments
- 4.1 Foundations of the Framework
- 4.2 Opportunity Recognition
- 4.3 Opportunity Analysis
- 4.4 Opportunity Evaluation
- 5 Limitations
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This thesis aims to develop a framework for utilizing strategic tools effectively within dynamic environments. It explores the limitations of traditional strategic tools when faced with velocity, complexity, uncertainty, and unpredictability and proposes a new framework to address these challenges.
- Analysis of existing strategic tools (SWOT, Porter's Five Forces, PEST analysis, Scenario Analysis).
- Evaluation of the limitations of traditional strategic tools in dynamic contexts.
- Development of a novel framework for strategic tool application in dynamic environments.
- Exploration of opportunity recognition, analysis, and evaluation within the proposed framework.
- Discussion of the limitations of the developed framework.
Zusammenfassung der Kapitel (Chapter Summaries)
1 Introduction: This introductory chapter sets the stage for the thesis by defining the problem of applying traditional strategic tools in dynamic environments. It outlines the research objective and the course of investigation that will be followed to achieve this objective. The chapter establishes the context and scope of the research.
2 Background: This chapter provides a necessary background on strategic management. It offers a brief history of strategic thinking and its relationship to firm performance, explaining the strategic management process. Crucially, it delves into the nature of dynamic environments, reviewing existing literature and elaborating on the dimensions of velocity, complexity, uncertainty, and unpredictability that characterize such contexts. The chapter concludes by presenting an analytical framework that guides the subsequent analysis of strategic tools.
3 Strategic Tools in Dynamic Environments: This central chapter undertakes a comprehensive review of common strategic tools, examining their fundamental principles and practical applications. The chapter assesses the strengths and weaknesses of SWOT analysis, Porter's Five Forces, and PEST analysis in static and dynamic settings. A thorough analysis of scenario analysis and forecasting is also included, including its critical factors and application in dynamic environments. The chapter lays the groundwork for the development of the new framework by highlighting the insufficiencies of existing approaches in handling dynamic market conditions.
4 A New Framework for Strategic Tools in Dynamic Environments: This chapter presents the core contribution of the thesis – a novel framework designed to improve the effectiveness of strategic tools in dynamic environments. Building on the analysis of the previous chapters, the framework focuses on opportunity recognition, analysis, and evaluation. It details the processes involved in leveraging the identified opportunities to create a strategic advantage, demonstrating how to use traditional tools within a more flexible and adaptable framework for dynamic settings.
5 Limitations: This chapter acknowledges the limitations of the proposed framework. It discusses potential areas for further research and improvements to the framework, reflecting the self-awareness that is characteristic of strong academic work. It realistically identifies the boundaries of the study and its findings.
Schlüsselwörter (Keywords)
Strategic management, dynamic environments, strategic tools, SWOT analysis, Porter's Five Forces, PEST analysis, scenario analysis, forecasting, opportunity recognition, opportunity analysis, opportunity evaluation, framework, complexity, uncertainty, unpredictability.
Frequently Asked Questions: A Framework for Strategic Tools in Dynamic Environments
What is the main topic of this thesis?
This thesis focuses on developing a new framework for effectively using strategic tools within dynamic and unpredictable market environments. It addresses the limitations of traditional methods like SWOT, Porter's Five Forces, and PEST analysis when dealing with rapidly changing circumstances.
What strategic tools are analyzed in this thesis?
The thesis examines several common strategic tools, including SWOT analysis, Porter's Five Forces, PEST analysis, and scenario analysis and forecasting. It analyzes their strengths and weaknesses, particularly their applicability in dynamic environments characterized by velocity, complexity, uncertainty, and unpredictability.
What are the key limitations of traditional strategic tools in dynamic environments?
The thesis argues that traditional strategic tools often fall short in dynamic environments because they are designed for more stable contexts. Their limitations are explored in detail, highlighting how factors like rapid change, intricate market interactions, and unforeseen events render these tools less effective.
What is the core contribution of this thesis?
The main contribution is a novel framework designed to enhance the effectiveness of strategic tools within dynamic environments. This framework emphasizes opportunity recognition, analysis, and evaluation, offering a more adaptable approach to strategic decision-making in volatile contexts.
How does the new framework address the limitations of traditional tools?
The new framework overcomes the limitations of traditional tools by providing a more flexible and adaptable process for strategic planning in dynamic environments. It integrates aspects of opportunity identification and evaluation into a systematic approach, allowing for a more effective response to changing market conditions.
What are the key stages of the proposed framework?
The proposed framework comprises three main stages: opportunity recognition (identifying potential opportunities), opportunity analysis (assessing the viability and potential of identified opportunities), and opportunity evaluation (determining the best course of action based on analysis).
What are the key themes explored in the thesis?
Key themes include the analysis of existing strategic tools, evaluation of their limitations in dynamic contexts, development of a novel framework for dynamic environments, exploration of opportunity recognition, analysis, and evaluation within the framework, and a discussion of the limitations of the proposed framework.
What are the chapters of the thesis?
The thesis is structured into five chapters: 1. Introduction; 2. Background (including a review of strategic management and dynamic environments); 3. Strategic Tools in Dynamic Environments (detailed analysis of existing tools); 4. A New Framework for Strategic Tools in Dynamic Environments (presentation of the novel framework); 5. Limitations (acknowledging limitations and suggesting future research).
What are the keywords associated with this thesis?
Keywords include: Strategic management, dynamic environments, strategic tools, SWOT analysis, Porter's Five Forces, PEST analysis, scenario analysis, forecasting, opportunity recognition, opportunity analysis, opportunity evaluation, framework, complexity, uncertainty, unpredictability.
- Quote paper
- Cornelius Herzog (Author), 2010, Strategic Tools in Dynamic Environments, Munich, GRIN Verlag, https://www.grin.com/document/156625
