Prescriptive strategy is one where the objective has been defi ned in advance and the main elements have been developed before the strategy commences. However, it should be noted that there are many variations on this basic approach
- prescriptive strategy starts with an analysis of the competitive environment and resources of the organisation This is then followed by a search for an agreed purpose, such as the maximisation of the return on the capital involved in a business (Ansoff , Porter). 1 It should be noted that the objective is not necessarily profi t maximisation: for example, in a publicly owned enterprise or social co-operative, the objective could have social service standards as its major aim. One test for prescriptive strategy is to see whether a clearly defi ned objective has been identifi ed in advance of the commencement of the strategy. In the case of CP, the purpose was related primarily to the delivery of profi ts to shareholders
- Against the background of the competitive environment and an agreed purpose, various options are identifi ed to enable the business to achieve the purpose. One option is then selected which isbest able to meet the objective. , CP had a complete range of options with regard to choice of customer targets, possible countries for entry, choice of product range and choice of brand names.
- The chosen option is implemented by the organisation’s managers. At CP, the strategic decisions to acquire a company in the UK and launch a special range in Spain and Portugal were then implemented by the actual purchase of a company, Shredded Wheat, and the launch of a range of products into south western Europe. You can see the more detailed story in the free fi lm on the we
- In summary, the advantages of the prescriptive process are that it assists in providing a complete overview of the organisation, thus allowing a comparison with the objectives of the organisation. In turn, this allows an assessment of the resources of the organisation, especially those that deliver competitive advantage, and the allocation of resources that are scarce. Finally, the prescriptive process lends itself to assessing the implementation and monitoring of an agreed plan.
In studies of prescriptive strategy, close parallels have been drawn with what happens in military
strategy – for example, as seen in the early Chinese military historical writings of Sun Tzu; the writings
of the nineteenth-century German strategist, Clausewitz, 2 and those of Captain B H Liddell Hart 3
who wrote about the First World War. All these have been have quoted by corporate strategists. 4
Prescriptive business strategy is sometimes seen as being similar to sending the troops ( employees )
into battle ( against competitors ) with a clear plan ( the prescriptive strategic plan ) that has been drawn up by the generals ( directors ) and then has been implemented (by launching innovatory products, etc.).
The Kelloggs/ CP breakfast cereals strategic battle is a good example – CP doing battle against Kelloggs worldwide.Prescriptive strategic analysis has also borrowed from economic theory . Adam Smith, writing in the eighteenth century, took the view that human beings were basically capable of rational decisions that would be motivated most strongly by maximising their profi ts in any situation. 5 Moreover, individuals were capable of rational choice between options, especially where this involved taking a long-term view. Adam Smith has been quoted with approval by some modern strategists, economists and politicians.
However, it should be noted that he lived in the eighteenth century and wrote about an era before modern organisations were conceived: for example, he had never seen a factory; only the craftsman’s workshop. 6 Subsequently, modern strategy theorists, such as Professor Michael Porter 7 of Harvard University
Business School, have translated profi t maximisation and competitive warfare concepts into strategy
techniques and structure that have contributed to prescriptive strategic practice. Porter suggested
that what really matters is sustainable competitive advantage vis - à - vis competitors in the market place: only by this means can a company have a successful strategy
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