Strategic Management

Posted: October 17th, 2013

Strategic Management

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Introduction

            Strategic management is a tool employed by companies that involves maximization of the available resources to enhance the company’s ability to perform tasks. Strategic management ensures production and delivery of goods and services that satisfy the clients’ expectations. Strategic management involves integration of various steps where the company specifies its mission, vision and its objectives, the company’s policies, its plans are stated, and the terms under which it intends to achieve its plans are laid out (Whittington, 2001). There is an allocation of resources in an initiative to achieve the laid down plans where the overall performance is monitored using a balanced score card, hence its progress in its achievement of its goals can be deduced Bain & Company is one of the world’s top consulting firms in matters relating to business. In the essay, the concept of strategic management as implemented by the company will be highlighted, expounding on how it has been effectively applied in making the company achieve its main goal. This essay highlights Bain & Company, a firm that has effectively applied the strategic management concept to achieve its goal by using its resources in effectively achieving its set goals that are in line with their external surroundings.

One of the main strategies that make a business successful is implementation of the corporate strategy that covers the creation of the corporate goals, the mission and the values of an organization (Mukhtar, 2010). Corporate, strategic management is a concept that if used effectively can help a firm make a name for itself by creating a reputation of setting a mission, a purpose and the ability to achieve its set mission. A firm should set policies that will guide the activities; these are the rules that will govern the employees and procedures that are aimed at meeting a certain objective. The concept employed in strategic management differs, in various firms depending on their size and their field of interest. For instance, Bain & Company is a multinational firm with a diverse client base and great resources that when well utilized will bring in returns hence resulting in the growth of the firm and the achievement of the company goals (Bain & Company, 2012). Through realizing what the firm aims to achieve, through the set objective, vision and mission, the employees can be guided to work towards that goal by the provision of resources aimed at making the attainment of a certain set goal possible.

In the case of Bain & Company, the company is a business management consultant hence the employees fully understand the importance of strategic management in attracting clients. They fully realize the benefits that a formal management plan can give to a company. Hence, they come up with vision and mission statements that precisely inform the client on what to expect and what the firm aims at. The vision statement simply outlines what the firm wants to become in the future. Through the mission statement, the firm distinguishes itself from other similar competitors by identifying what it does for the benefit of the client (Whittington, 2001). In Bain & Company, the company’s mission is to provide a partner-like working environment for clients to increase their knowledge of the clients. This makes the client feel that the company will fully understand the objectives and realities they face while working. Hence, will be able to provide a solution that will cater to the clients needs. By stating this mission, the company creates an impression of understanding of the consumers’ requirements, thus creating a more trusting relationship with the clients, a strategy that aids in attracting more clients to them.

Another strategic management practice that Bain & Company employs in ensuring the highest level of success is by maximization of its human resources. The firm is organized into different levels of operations, incorporating strategists placed in positions where each will be able to offer the most benefit to the organization. These strategists are placed into different categories such as chairperson, worldwide managing director, regional managing directors a strategy that enables the firm to cater for every region in a manner specific to the needs in each region that will result in the achievement of the most suitable solution (Bain & Company, 2012). The company ensures that the relation between the management and employees is one that allows trust and provides an environment where the team can manage to get work done.

Under the corporate strategy, there are the daily operations that keep a business running hence making up the functioning of a business (Whittington, 2001). In order to realize the potential profit from the functions of a business, the functional strategies should be undertaken. This will be implemented to ensure that both the internal strengths and external opportunities are realized and fully exploited. Hence, a key area that Bain & Company incorporates in getting the best results from their work is maximizing on its internal strengths and potential. Some of these strengths are the ability to perform activities well, smart marketing strategies, and an organized management team able to provide guidance and motivation to its clients. Bain & Company maximizes on all these strengths in that it works towards providing the best performance of its tasks. The firms sets out to understand the clients objectives and the real issues that the clients go through which enables them to align the incentives with the clients policies thus providing the clients services that are relevant to the situation (Bain & Company, 2012). Therefore, the company lives up to its promise of providing a solution that will be specific to every required task by the client.

Some of the external opportunities that Bain & Company have are availability of technology where there is easy access to the internet. This aids the company in that they are able to interact with their clients through the web. They are also able to share their electronic material on problem solution and strategic management on the net. Through the net, the company can market itself and reach a wider clientele base from a wider region unlike when there was no internet connection. Bain has the advantage of having clients in the technology field, and they can seek these services from them creating a favorable business environment between it and its clients (Bain & Company, 2012). One of its key strengths in the use of the web is the setting of standards and security in its sites hence protecting both its information and the clients’ information.

The firm has the external opportunity that is the economic societal factor. In the unpredictable economy, many corporate businesses are finding it necessary to seek advice on strategies to employ in the business to stay on top of competition; hence, the management consultation business has grown. This presents an opportunity for Bain & Company to grow and attract more clients by the provision of the best insight and advice. They ensure that the services they give are of excellent quality and the most relevant to the client’s situation. The satisfaction of their clients is evident as Bain & Company’s clientele consists of high performers in their field. Bain & Company members are able to give advice relevant in any field with their clients ranging from financial services, media, retail, healthcare, technology and industrial goods and services (Bain & Company, 2012).

Bain & Company’s other internal strengths are its strong marketing skills. This they are able to do through the various publications they produce in line with their area of expertise. The firm has also maximized on technology, making use of the internet to market itself. This is a strategy as this ensures that the clients can use these publications as reference points hence increasing the reliability of this company as strategic management counseling providers. The professionalism of this company has seen it gain reputation internationally as marketing its mission and objective and backing it with knowledge from a team of highly professional and educated personnel (Bain & Company, 2012). In its day-to-day operations, cost effectiveness must be maintained hence an operational strategy should be implemented. This ensures that the activities stay within budget, and since they are fixed operations, the set amount located is not prone to adjustments. This ensures that the company maintains cost effectiveness and focus that would result in meeting of deadlines, effective solution implementation and hence greater customer satisfaction resulting in reliability.

In its running Bain & Company, take on the systemic approach that is a strategy implemented with the satisfaction of the consumer (Whittington, 2001). Here, the firm is not only expected to take from the society in its quest for profit maximization but to give back to the society. Therefore, the consumers expect the firm to act in a responsible manner. In this, the decisions and the action that the firm takes will be tailored to suit the community hence giving their clients solutions that will have the most effect on their clients. Bain & Company implements this strategy by working with clients who deal with actions that have a positive impact in society, such as healthcare and media. The firm also participates in community service and corporate responsibility hence giving back to the society and making a positive impact in the society through the work, they do (Bain & Company, 2012).

There are various theories that have been attributed to management strategies as the view on strategic management has undergone evolution over the years. Initially in the 1970’s growth and portfolio strategy was considered to cover the entire concept of strategizing (Liebeskind, 1996). It mostly dealt with the size of the firm and the growth it experienced. Through extensive study, it encompassed the relationship between implementation of strategy by a firm and the resulting rise in profit margin. This theory insisted on the study of the portfolio of a firm to realize its size, which would then result in gained economies of scale.

However, in the 1990’s there was a creation of the ecological theory that recognizes the fact that the world is a competitive place. This was based on the Darwinian scientific theory about the evolution of man where man had to compete for the limited resources and the best won (Liebeskind, 1996). Hence, the existent firms at the time would use the available resources to compete for clients regardless of giving back to the society. The notion of community service was inexistent as the firm’s goals were lowering of costs and maximization of profits.

In the late 1990’s, this strategy was taken over by the information technology era. Here, an information technology-driven strategy (Liebeskind, 1996) was to be applied, and for it to work effectively a firm had to have the following characteristics. It had to be structured in a manner that the employees constantly received motivation to learn and a new pattern of thinking, different from that previously employed would be adapted. In addition, the firm would employ new schedules allowing the employees continuous expansion their knowledge base. Teamwork is also encouraged as it results in growth of an individual’s skill (Liebeskind, 1996). This is the theory that Bain & Company has adapted as their strategy as the five disciplines identified in this model are quite vital in the field that this firm operates.

These five disciplines include the skill of self-reliance, which is adapting a sense of personal responsibility that is the individuals driving force to acquire certain skills to deal with a problem or exploit an available opportunity (Liebeskind, 1996). The second discipline is people’s mental models, which are the ideas a person has; hence, we understand how they affect that person. The third discipline is the firm’s vision that is a shared vision, which brings the workers together. The leaders of the firm are responsible for developing this and explaining its significance to juniors and steering them in a way that the achievement of this vision will be possible. The fourth is team learning where employees learn in teams and share insights on what they learn. This is crucial in Bain & Company as they are then expected to work with the clients when trying to come up with the solutions to their problems (Bain & Company, 2012). The fifth discipline is systems thinking that involve viewing the four disciplines as integral parts of one system; hence, they need to be utilized together for the complete success of a strategy.

Strategic management is driven by a psychological sense in the leaders of any business. With the competitiveness of business, leaders have the drive to keep the business at the top, to provide solutions to problems, and to create diversity from the rest of their competitors in the industry. Hence, strategy will always demand creativity to bring about differentiation and innovation to keep the business relevant to the diverse consumer needs (Whittington, 2001). The complexity of the changing demands due to the growth change in technology will require the leader to pool employees of creative nature. This is the backbone of strategy where the creative minds in a business come together to provide the most relevant yet outstanding solution to a problem.

Strategy is the responsibility of senior managers and directors, hence, as they are constantly faced by situations that are not predictable, they become adapted to taking the decisions that are dynamic and flexible (Whittington, 2001). This therefore proves that decision-making becomes part of a psychological process for the managers where they make decisions based on intuition. In Bain & Company, the decisions are made from the top managers and communicated down to the other employees. Therefore, the major decision making burden is on the leaders. With the experience they have, their decisions may be based on intuition based on their knowledge of the market and their clients.

References

Bain & Company. (2012). “About Bain & Company”. Retrieved from: http://www.bain.com/about/index.aspx

Liebeskind, J. P. (1996). “Knowledge, Strategy, and the Theory of the Firm”, Strategic Management Journal, vol 17, winter 1996. Print.

Mukhtar, K. K. (2010). “Key Terms in Strategic Management”. Retrieved from: http://management4best.blogspot.com/2010/03/key-terms-in-strategic-management.html

Whittington, R. (2000). “What Is Strategy and Does It Matter?” Cengage Learning, EMEA. Print.