STRATEGIC MANAGEMENT

Semester III
Assignment 1

TOPIC: THE ORIGINS AND EVOLUTION OF BUSINESS

STRATEGY FROM ANCIENT TIMES TO MODERN
BUSINESS.

Submitted To:
Prof Pradip Mittra

Submitted By:
Medha Sur
 We can say that different businesses have different goals and take different routes to fulfil those goals.
These routes constitute the business strategies of these businesses. A business strategy is the
combination of all the decisions taken and actions performed by the business in order to accomplish
business goals and to secure a competitive position in the market. With the increase in the competition,
the importance of business strategy is becoming apparent and there’s a huge increase in the types of
business strategies used by the businesses.

Bartering is an Effective Business

Phase I:
Strategy. Barter system is defined as
Strategy in 6000BC exchange of goods for other goods
Ancient Times without the use of any medium of
exchange. Barter system was
prevalent at an early stage of
man’s economic life when the wants
were very limited in number.

The Industrial Revolution transformed

economies that had been based on
agriculture and handicrafts into 1760s
economies based on large-
scale industry, mechanized
manufacturing, and the factory system.
New machines, new power sources, and
new ways of organizing work made
existing industries more productive and
efficient.

During this time the Tactics and

1800s strategies were applied to war
situations in which tactics involve the
use of armed forces in the engagement
whereas strategy is the use of
engagements for the objects of war.

During this time Strategic planning was

the main focus. Alfred Sloan of General 1920s
Motors mentioned development of
strategic plan based on its strengths and
weaknesses.

1930s Chester Bamard of New Jersey Bell

emphasized the importance of
strategic factors and organizational
personal action to deal with
competition.

During World War II the Allied nations 1940s

emphasized strategic thinking and use
of some strategic planning tools for
allocating the scarce resources.
 Drucker’s biggest contribution to
1950s business strategy was the introduction
Phase II: of the concept of management by
Budgetary objectives. He was the first to see that the
purpose of business is external in
Planning creating and satisfying customer needs.
(1950-1960) The period of the 1950’s is marked by
budgetary planning and control.

For the first time, the managers brought Phase III:

1960s
the concept of corporate planning to the Corporate
forefront. Companies created separate Planning
corporate planning departments that were
(1960 – 1968)
entrusted with the task of using
sophisticated forecasting techniques and
plan growth and diversification.

Phase IV:
Corporate Ansoff in his book Corporate strategy
Strategy 1965s played a key role in the development of
(1968 – 1975) strategic planning. He also introduced
about the gap analysis and thus he left an
incredible mark on the practice of
strategic management.

There was disenchantment with strategic

planning as developed in the stable 1970s
environmental conditions could not cope Phase V: Industry
with the challenges of the new turbulent and Competitive
environment. Corporate strategy’s
adoption in the 1970’s was largely
Analysis
influenced by portfolio planning and (1975 – 1985)
large companies need to establish
synergy between the business units and
corporate parent. The 1970’s also
witnessed the beginning of the mammoth
PIMS (Profit Impact of Market Strategy)
study in an attempt to understand the Here the maturity of strategic planning
correlation between performance and 1980s-1990s starts in which strategic management
strategy. slowly progressed to identify the reasons
why some companies outperform others.
Porters in his Competitive Strategy
addressed the issue that how a company
sustained the competitive advantage. His
important contribution to strategic
management includes five forces model,
value chain and the concept of generic
strategies. It helps to understood how
these forces operates in the industry and
affect the company specific situation.
During this time, strategic planning
becomes an integral part of business 1990s
operations. A new shape of competition
took place in terms of cooperative
strategies. Strategic innovation and
survival with cooperation were chief
characteristics during this stage
 Phase VI: Internal
Sourcing of
Competitive
Advantage (1985 –
1995)

Phase VII: Strategic 2000-2005 Strategic innovation and implementation have

dominated the period of the mid 1990’s through
Innovation and
2001. The importance of strategic innovation has
Implementation been exacerbated by the application of
(1995 – 2001) technology to the business process. Companies
that once aspired to securing sustainable
competitive advantage have realized that it no
longer exists.
Walmart becomes the largest company in
the world. Finding new and unexplored
international markets and outsourcing to
cut down growing overheads were the 2010 Phase VIII: Strategic
hallmarks of the strategies. The “Wal- Thinking & Simplification
Mart Effect” occurs as giant companies (2003 and beyond)
enter local communities and eliminate
small business owners who simply can’t
compete on price. However, money starts
to leave local markets, unemployment
and under-employment rises, and the 2010-2015 The prominent emerging topics of
local communities start to stagnate. strategic management research in recent
years is corporate social responsibility.
There is rapid change in buying habits as
more and more shopping is conducted
online. The brick and mortar assets of
traditional retailers start to become
liabilities.
The door has been opened for another
transformation. In combination with the
increasing understanding of the role 2015-2020
small business plays in a healthy
economy, and the availability of
advanced information technology
that’s user friendly and low cost, small
business can start to offer everything in Big Business started reacting quickly
Big Business and complement it with enough – smaller, more flexible
personal service. enterprises leveraging information
technology, market intelligence, and
2020-2025 providing customers with personalized
service and attention, gain traction in
local markets whereas the small
businesses are able to effectively
transform themselves into “virtual”
The information on social responsibility
businesses and focus on aligning
in the hands of the managers of small
2025-2030 customer needs to an infinite range of
and medium-size enterprises (SMEs)
products available from all the leading
informs a positive tendency toward the
global manufacturers.
performance of responsible actions toward
the natural environment. Customer choice
is unlimited and manufacturers'
commitment to the Platform Hubs is
unavoidable to ensure their products have
the opportunity for resale.

Conclusion: -

Looking to the future, it appears that strategic management will prove to be more important than ever. In response,
researches who are interested in strategic management will work to build additional knowledge about how organization
can maximize their performance. The evolution of business strategy has moved through the following phases: 1. Budgetary
Planning 2. Corporate Planning 3. Corporate Strategy 4. Industry and Competitive Analysis 5. Internal Sourcing of
Competitive Advantage 6. Strategic Innovation and Implementation 7. Strategic Thinking & Simplification. Taking time to
look back at the business strategy landscape will only help in forging future paths to business success.