week 21

1. What are the benefits and drawbacks of taking an ‘emergent’ approach to strategy making?

Emergent Strategy:

Emergent strategy is defined as the patterns of actions inside an organization which took place lacking a clear relationship to, and the mission or the targeted goals of the company. The model usually becomes obvious only after the fact, but organization often accept the change as a new business policy. A clear example of this may be a comedian book shop owner setting a strategy for control comic books sales in selected area or place. The manger, conversely, notes that earnings from tabletop gaming foodstuffs far exceed that of the comics and shift resources to complain of gaming inventory. Profit increases and the owner recast the strategy to become the leading gaming shop in a selected area.

Advantage of emergent strategy:

Manly, in every case emergent strategy take place from individuals of a company responding straight forward to market forces. Their decisions reveals shift in order sizes, consumer taste and preferences of competitors business. In fact, the benefit of taking emergent strategy is that it guide a company to supply what the market really wants, relatively than what the executive or owner thinks or consider the market needs, effective emergent strategy does involve that the business maintain the flexibility, mainly at the executive or owner level, to grip the latest or newly strategy.  

Disadvantage of Emergent strategy:

Via nature, emergent strategy takes place as piece of continuing managerial activity. Whereas a business could miss a deliberate strategy and rely on an emergent strategy to build up, the chances of such order patent from pure, shapeless business action remains lean. In this case, emergent strategy does not recommend genuine choices than further traditional deliberate strategy, particularly for new business in service or narrow margins. At finest, it supplies to balance and serve as a corrective measure for deliberative strategy.

2. Did Honda Entry strategy demonstrate the characteristics of ‘logical incrementalism’?

According to Quinn, “Logical incrementalism is the development of strategy by experimentation and learning from partial commitments rather than through global formulation of total strategies”. Dynamic changes are required to respond to the unexpected changes in the environment rather than planning the strategic direction well ahead (Johnson et al., 2005).

Yes, I think Honda entry strategy demonstrate the characteristics of logical Incrementalism due to following reasons:

 v  Only Four percent of the Honda Motorcycles was exported in 1960, however mass production is applied in home country Japan; it leads to reduction or cutting down the cost of motorcycles through mass production.

 v  A very limited people attracted in the USA to use motorbikes after the second world war as they called them “Satan’s Slaves”. Or “Hell’s Angels”. & they also thought that providing a motorbike as a bad image. Honda Experiment their product in such complicated point of time naming “American Honda Motor Company” which was also stated in their 1963 annual report and on marketing strategy. 

 v  In 1961 with the help of 125 distributors and investment of 150000 on their regional advertising they focused on young families in their advertising theme named “You meet the nicest people on a Honda”.

 v  Honda also follow the emergent strategy and supply according to the customer demand on the light-weight products which help them to increase their sales level from $ 5000,000 in 1960 to $ 77 million by 1965.

 v  US market share of motorcycles at that time (in 1966) was

Motorbike (Brand)	% Shares
1.      Yamaha	11%
2.      Harley Davidson	4%
3.      BSA/ Triumph and others	11%
4.      Suzuki	11%
5.      Honda	63%

 v  After struggling different things such as sharing furnished apartment in $ 80 per month, sleeping in floor and different others they find out Japanese community as well as the suitable environment to sell their motorbikes choosing Los-Angeles and pointing out the growing motorbike users.

 v  Honda motorbike was extremely in poor condition in their first year, they are unaware of environment certainty that during the time of April to August in US business. Although they hard-learned and achieve knowledge with distributorship in Japan influenced them to struggle to go to the retailers directly. They lope advertisement in the motorbikes magazine for wholesaler. Fortunately, their all bad times are swept like the sand in swept near the seashore, different 305cc and 250cc motorbikes began to sell.

In my opinion they followed every element like uncertainty on environment, experimentation, general goals as well as coordinating emergent strategies. This shows they are following “logical Incrementalism”

References:

1.  Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter 12

2.      Lynch, R (2011) Strategic Management, 6th Edition, Pearson Education, Chapter 1

3.       Lynch,R (2012) Strategic Management 6th Edition, chapter 2

4.      Mintzberg, Ahlstrand and Lampel (2009) „Strategy Safari‟ Edition 2, FT Prentice Hall, Chapter 8