Strategic Analysis

 Strategic Analysis
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ASSIGNMENT
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Strategic Analysis
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QUESTION 1
You are a strategic planning manager in a large international oil company. Explain what
strategic style you would adopt and why. Cite relevant examples from the oil and gas
sector. Refer to models learned on the course such as SWOT analysis, Porter’s Five Forces
Contemporary companies operate in industries characterized by constant evolution of business
environment. For example, the internet and computer industry, or even other technology-based
industry, is synonymous with rapid changing environment due to invariable technological
breakthroughs. Companies that fail to change in tandem with technological breakthroughs slide
into oblivion due to efficiency differentials in the industry brought by adoption of new
technology. Scholars assert that companies should, therefore, adapt their strategy to their
aggressive environment in order to remain competitive. Nevertheless, it is difficult for strategic
managers to align strategies with respective business environment due to the unpredictable and
volatile nature of some business environments. For instance, companies in the computer industry
operate in highly competitive business environment typified by constant superior innovations,
which make it easier for these companies to gain or lose market base easily, making it impossible
to predict business outlook. However, there are companies that operate in predictable
environments, affording strategic managers those companies opportunity to match strategy with
predicted environment; a good example of such industry is the oil and gas industry. Due to
disparity in business environments, Reeves, Love and Tilmanns (2012) posit that different
companies use different strategies depending on business environment predictability and
influence on the changing environment.
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Reeves, Love and Tilmanns (2012) point out four strategic planning styles that strategic
managers use to choose strategy to deploy in their respective business environment. The strategic
styles are namely, adaptive, classical, visionary and shaping. Companies operating in business
environments which are predictable but whose control is difficult deploy classical strategic
planning style. This form of strategic style is highly effective in mature and stable industries such
as the oil industries. In this case, a company set an objective to control market share, which it
deems favourable, and then engages in planning in an effort to capture and strengthen that
market base. Due to globalization, technological innovations, intense competition and economic
fears, technology industry is impulsive and unpredictable. Companies operating in the industry
are constantly refining tactics and goals and promptly shifting resources to adapt to the reactive
business environment. Reeves, Love and Tilmanns (2012) observe that companies operating in
fast changing business environment are disadvantaged since predictions are often wrong and
long term plans un workable. The only remedy is to engineer flexibility in their strategies by
adopting adaptive planning strategy. Shaping is another strategic planning strategy that is highly
effective in volatile and predictable industries. However unlike adaptive strategic planning style,
companies deploying adaptive strategy try to influence the erratic business environment before
their competitors in the industry (Reeves, Love and Tilmanns, 2012). Another distinction
between the two, adaptive and shaping strategic styles, is that shapers move beyond the
confinements of their company to attract new markets, technologies, standards and business
mannerisms. However, just like companies deploying adaptive strategic planning style,
companies using shaping strategic planning style, are flexible in their planning cycle, with short
term planning successions. Lastly is visionary strategic planning style. In this style, companies 
Strategic Analysis
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predict the future and devise strategies to realise the desired end result (Reeves, Love and
Tilmanns, 2012).
Companies operating in the oil industry operative in relatively stable business environments
(Johnston and Johnston, 2006); though, there are changes in the oil industry they are predictable
with few erratic cases. As a strategic manager in a oil company I know that business
environment in the oil industry is shaped by geopolitical forces, weather conditions, discovery
and exploitation of new oil resources, income levels, weather conditions and GDP‟s of
economies of the world. These business shapers factors are beyond any of the oil industry
players. Therefore, I will adapt a classical strategic planning style. In this strategic planning
style, I will aim at consolidating my market share by engaging in formalized planning efforts,
aligned to the predictable business environment, to captu