Strategy: A Fundamental Element in an Organization's Performance
Strategy is fundamental in an organization's overall performance. The strategy selected depends upon numerous factors. The environment has a direct influence on the relationship between strategy and performance. The combination of several factors contributes to the strategies chosen and influence the performance of an organization. The current dynamic and competitive business environment influences companies to survive, grow and be profitable as an essential goal for all industries. Organizations are challenged by identifying the benefits and limitations of Porter's Five Forces and Kaplan's and Norton's Balanced Scorecard. These powerful strategic management tools can be linked to interact with each other. Porter's work can facilitate managers formulate their strategy making decisions on the basis of organizational external environment. Kaplan's and Norton's work makes sure the strategy formulated incorporates specific objectives to ensure and monitor the strategy is executed by managers within well structured measures. Michael Porter's five forces are business theories that can clarify important issues a business faces. The strategy is determined by a unique combination of activities that deliver a different value proposition than competitors or the same but better. The intent of Michael Porter is to help discover why conditions are the way they are in a deep strategic analysis. The five forces inform and promote the strategic review process, environmental investigation and positional analysis. Porter's model provides a general view of the firm, its competitors, and the firm's environment (Laudon, K., & Laudon, J. 2012 pp. 95). It reveals the source of competition in an industry and the external impact including the opportunities and threats an organization faces to gain competitive advantage. Porter's five forces are of great importance to promote strategic options to improve performance in the industry. It also provides a good explanation for the
References: Hill. M., & Jones, G. (1995). Strategic Management an Integrated Approach. http://apmstuff.blogspot.com/2010/07/limitations-of-balanced-scorecard.html http://www.coursework4you.co.uk. Porter 's Five Forces Analysis. http://www.ehow.com/about_5431829_advantages-balanced-scorecard.html Laudon, K., & Laudon, J. (2012). Management Information Systems (pp. 95).