Question

Describe the three schools of thought which are; The planning school, the positioning school and the resource based school and provide an example of each

Answer 1

The planning school: Here, strategy formation is considered a formal process. Also, the thought process runs towards planning the entire strategy in a rigorous manner, so that the firm advances forward. The complete process and the plan which the company implements is documented from the start to finish. In short, strategy planning is treated as distinctive processes. In planning, the school thought of strategy the plan is given more importance whenever the management wants to take new decisions. With the plan in hand, the management gets a clear direction to move ahead, helping the company to move forward steadily

The positioning school: Here the entire focus is on strategy content. The management of firms decides that they want to position the product at the top of the mind and make decisions accordingly. In this case, firms need to determine the competition already present in the market, and how the firm is positioned. Here the Five Force Model, Value chain and BCG matrix are few strategic tools which can be used under the positioning school. Once the market is analyzed, the right strategy can be applied to improve the positioning of the firm’s product.

The resource-based school: A resource-based approach to strategic management focuses on costly-to-copy attributes of the firm as sources of economic rents and, therefore, as the fundamental drivers of performance and competitive advantage (Barney, 1986, Rumelt, 1884, 1987). It means that the resource-based view is the access way using the role of entrepreneurial resources as one of the important sources considered the competitive advantage. Entrepreneur resources are regarded to everything internal to the firm and listed all assets, capabilities, information, knowledge, human resources, etc. A few among these characteristics can be combined and make firms different from one another.