A Model for Doing Business in Africa: Principles of Strategic Management and Corporate-Level and Competitive Strategies

A Model for Doing Business in Africa: Principles of Strategic Management and Corporate-Level and Competitive Strategies

DOI: 10.4018/978-1-4666-4570-7.ch008
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Abstract

The chapter focuses on developing a business and competitive model to create and successfully manage a business in Africa. This includes strategic positioning of a firm in a market, corporate-level and competitive strategies that firms need to develop in order to successfully create a sustainable competitive advantage in the industries, and market segments they will compete in. Strategy and strategic management are defined and described fully. The perspectives and paradigms of formulation, implementation, and evaluation of a strategic intent are fully explored and covered here including determining the sources of a sustainable competitive advantage for a firm in an industry through the creation of a variety of competitive advantages.
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1. Introduction To Strategy And Strategic Management Insights

Effective strategic management enables a company to grow and to compete successfully in its industry and market segments. It is able to develop a sustainable competitive advantage in these markets. Therefore, strategic management is a comprehensive and fundamental framework for achieving the firm’s fundamental goals (Porter, 1996; Lymbersky, 2008).The concept of strategy has been borrowed from the military and adapted for use in business. Strategy is a term that comes from the Greek word strategia, meaning “generalship in the military” (Mintzberg, 1987).

In the military parlance, therefore, strategy often refers to maneuvering troops into position before the enemy is actually engaged. In this sense, strategy refers to the effective preparation and deployment, in advance, of troops in war. Once the enemy has been engaged, then attention shifts to tactics of implementation of the war strategy. Here, the effective employment and use of troops and equipment is central and critical to war success. Substitute “business” for war and “resources” for troops and the transfer of the concept of strategy to the business world begins to take form (Hart 1967).

Notwithstanding, various scholars have defined strategy in a number of different ways. Strategy is management’s action plan for running the business and conducting operations. It is a process of selecting and performing unique activities to create unique value for a unique set of customers (Mintzberg 1994; Porter 1996; Thompson 2008). Crafting a strategy represents a managerial commitment to pursue a particular set of actions, decisions, and moves taken to attract and retain customers, and grow the business. The strategy aims at competing successfully to improve the company’s market share and eventually financial performance. Managers always try to create a strategy that gives their firm a sustainable competitive advantage and hence develop barriers to entry by competitors in their market segment (Thompson 2006; Porter 1985).

Other scholars have described strategic management as the art, science, and craft of formulating, implementing, and evaluating cross-functional ideas and decisions that will enable an organization to achieve its long-term goals and objectives of satisfying customers and ensuring successful financial performance. It is a creative and analytical process of specifying the organization's vision, mission, goals, and objectives; developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives and then allocating resources accordingly to implement the projects and programs (Chandler, 1962; Andrews, 1980; Mintzberg, 1994).

Strategic management is at the highest level of management. Strategies are typically initiated, planned, and guided by the Chief Executive Officer, approved by the Board of directors, and then implemented by employees under the supervision of the management team. However, when designing a strategy, the senior management must engage, explain the strategy, seek ideas, and clarify expectations to all employees to have employee ownership of the strategy. Thus, reduce resistance to changes required in the successful implementation of the strategy. Otherwise, if the employees are not engaged, involved, explained, and expectations are not made clear to them, you will experience resistance and opposition to initiatives to implement the strategy from all parts of the organization (Mauborgne, et al., 2005).

It is important to remember that organizations are open systems. They often obtain resources from the external environment, which they convert into products and services by adding value through their transformation process. They in turn deposit the products and services into the external environment for the customers and consumers. Therefore, organizations should always ensure that there is a match between their internal conditions and the external environment. An organization achieves this match through an effective strategy. Without this match there will be a strategic problem for the organization that can only be corrected by developing an effective strategy that matches the organization’s internal conditions with its external conditions (Hart, 1967; Mintzberg, 1987, 1988).

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