Discussion Chapter 1: Fundamentals of Strategic Management
How do you explain the success of firms that do not use a formal strategic planning process?
In chapter 1, page 6 of our Strategic Management textbook, the author explains the difference between
a Scientific and Artistic perspective on strategic management. Firms that do not use a formal (or more
scientific) planning process may be more successful in an environment that is less predictable, changing
quickly and frequently. This type of environment may demand “greater creativity and intuition” in the
planning process. Henry Mintzberg describes this informal perspective as a craftsmanship, requiring
“holistic thinking, intuition, and imagination.” In fact, the artistic view may see strategic planning
exercises as “time poorly spent.” The text goes on to explain how creativity and innovation are
important, however there is a greater probability of success when they “occur as part of a systematic (or
formal) approach to strategic management. An example of a company that may have been successful in
the beginning without a formal strategic planning process might be Facebook. The question I have is did
Facebook begin to implement a more formal strategic planning process during the growth phase which
gave rise to its success or is Facebook now starting to implement a more formal (and less creative)
strategic planning process which is resulting in its recent lackluster performance?
Discussion Chapter 2: Industry Competition
Identify two businesses whose sales have been adversely affected by substitute products. Why has this
occurred?
In chapter 2, page 35 of our Strategic Management textbook, the author defines substitute products as
being “produced by firms in other industries, satisfying similar consumer needs but differing in specific
characteristics.” To be more specific, the text goes on to explain how “substitutes always reside outside
of a firm’s industry.” Substitutes cannot be identified until the industry is clearly defined. Two
businesses whose sales have been adversely affected by substitute products are McDonald’s and
Greyhound bus. I think our textbook is WRONG when it defines Applebee’s as being a substitute if