Mary-Phillips

What is Strategy?

According to Fred Nickols, strategy came from the Greek word strategia which means “generalship” (Nickols, F., 2004). Generalship was defined by the Merriam-webster dictionary as, “the office or tenure of office of a general, the leadership or a military skill in a high commander” (Merriam-webster, 2009). When the military use the word strategy, they mean maneuvering troops in their rightful position before the enemy arrives (Nickols, F., 2004). George Steiner, one of the founders of The California Management Review and the author of Strategic Planning, explained that, “strategy entered the management literature as a way of referring to what one did to counter a competitors actual or predicted moves” (Nickols, F., 2004).

Henry Mintzberg on the other hand defined strategy in four different ways:
• Strategy is a plan, a "how," a means of getting from here to there.
• Strategy is a pattern in actions over time; for example, a company that regularly markets very expensive products is using a "high end" strategy.
• Strategy is position; that is, it reflects decisions to offer particular products or services in particular markets.
• Strategy is perspective, that is, vision and direction.
Mintzberg concluded that strategy therefore emerges over time when intention collides with and accommodate a changing reality (Nickols, F., 2000).
Gathering from the above definitions, strategy are the techniques, patterns, perspectives that a top manager takes to differentiate his/her company from its competitors. Strategy can be anything an organization, a group or an individual does to stay atop or to stay competitive. For example, a group of students in the same class might use different strategies to study for an exam even though they might sometimes end up with the same grade. In a hierarchical situation, strategy will be those actions a top manager takes or decision he/she makes to stay competitive in the market/industry. Strategy is therefore the way an individual or group stays competitive amongst their peers. What then is Strategic Use of Information?
Using the different definitions of strategy given by the above scholars, strategic use of information is the way an individual or group uses information to build a competitive edge amongst its competitors. Before I explain what strategic use of information really means, I will first explain a very important attribute called Knowledge Management.

Knowledge Management

Jay E. Gillette once said that higher education was the one thing that people used to build a competitive edge in the mid-twentieth century (Gillette, J., 2008). This was a time that education was not as popular as it has become in the twenty-first century. Your knowledge was valuable and was a competitive advantage over those without higher education. As years went by, individuals and companies started to find ways to manage their knowledge and information acquired as a differentiating mechanism. A research that studied two Italian restaurants showed how different but similar firms can manage knowledge by using information strategically. One company focused on marketing, while the other focused on the technology knowledge domain and they’re both top restaurants in the food industry (Massa, S., & Testa, S., 2009).

Supply Chaining

Two days ago, I was reading chapter seven of the book; The world is flat which was about supply Chain and Thomas Friedman pointed out that supply chain is one of the ten greatest flatteners of the world. If you’re not familiar with the book, a flat world is when people from different parts of the world share, exchange, or communicates in such a way that distance is no longer a factor or hindrance. The flattening of the world has made information readily accessible to us be it via search engines such as Google or telecommunication devices so that we can easily reach, retrieve, or exchange information at anytime and from any part of the world without having to physically travel there.

What is Supply Chaining? Thomas Friedman defined supply chaining as, “the method of collaborating horizontally amongst suppliers, retailers, and customers to create value” (Friedman, T., 2005). Wal-Mart is the biggest company in the world but it does not make a single thing, how is that possible? A highly efficient supply chain does the magic. With supply chaining, Wal-Mart has been able to collaborate with different suppliers both nationally and global to get the best product at the lowest price possible. With today’s technology, it is very difficult to keep intellectual property secret said Friedman, but you can reverse engineer these knowledge/information in such a way that will distinguish you from your competitors (Friedman, T., 2005). It is difficult to duplicate Wal-Mart’s supply chain structure since Wal-Mart has replaced inventory with information.

Strategic Use of Information

Gathering from Wal-Mart’s supply chaining, we can say that they have strategically used information. When Michael E. Porter was saying that, “buyers will not pay for value they do not perceive, no matter how real it may be but through effective signaling of value, a firm may be able to command a price in excess of true value for a time,” he was not kidding (Porter, M., p. 139-140, 1985). When a firm such as Wal-Mart effectively signals value in its products, they command a price in excess of true value for years to come. Jay E. Gillette once said that Wal-Mart does not always have the lowest price but because of their reputation and perceived value in the industry, people ignore that fact (Gillette, J., 2008). Wal-Mart has been able to deliver perceived quality to its customers so that even if Wal-Mart commands a price in excess of true value for a period in time, their customers will still retain the perceived value.

In Business College, we analyzed the performance of companies by using SWOT analysis or as Jay E. Gillette will call it SWTO: Strength, Weakness, Threats and Opportunities and Porter’s five force analysis: Buyers, Suppliers, Substitutes, Potential entrants, and Industry Competitors (Gillette, J., 2006). These business analysis tools were used to determine where a company is, and where the company is going. In the strategic use of information, a company can use these business analysis standards to develop a strategy that will help differentiate the company from its competitors. According to Jay E. Gillette,
“It’s important to start with an inventory of our strengths, then weigh our weaknesses. Now, from our weaknesses we have a clear view of threats to ourselves and our organization, and we can see where our strength give us encouragement and protection. Finally, we can reckon our opportunities fairly and with confidence” (Gillette, J., p.11, 2006).

From the above statements, we can gather that a company can use the information gathered from the SWTO analysis to determine the strategies needed to stay atop the industry. Knowing a company’s strengths, weaknesses, threats, and opportunities gives the company the chance to devise strategies based on the opportunities available. It is therefore important for a firm to know their current position in order to strategically use that information as a competitive advantage in the future.

Strategic use of information is therefore the way we use and manipulate information or knowledge to suit a specific need. Because we are in the information age where information is readily accessible to anyone anywhere, the way we use information is becoming the strategic use of information. Information has made copyright laws very difficult to implement effectively but strategic use of information will start to be the differentiating factor that will determine the quality of information used. I therefore urge you to see the information and knowledge you possess as a competitive advantage over your peers by using it effectively.

Reference

Friedman, T.H. (2005). The World is Flat. New York: Farrar, Straus and Giroux.
Generalship. (2009). In Merriam-Webster Online Dictionary. Retrieved April 14, 2009, from http://www.merriam-webster.com/dictionary/generalship

Gillette, J.E. (2006). Strategic Development for the Information Economy: A Practical Guide to Coordinated Action through Time. Annual Review of Communications. Vol.59. Chicago: International Engineering Consortium.

Gillette, J. (2008). Theory of Communication: Seminar. CICS. Ball State University
Nickols, F. (2004, October 6). Strategy: Definition and Meaning. Retrieved April 14, 2009 from, http://home.att.net/~nickols/strategy_definition.htm

Massa, S., & Testa, S. (2009, April). A knowledge management approach to organizational competitive advantage: Evidence from the food sector. European Management Journal, 27(2), 129-141. Retrieved April 13, 2009, doi:10.1016/j.emj.2008.06.005.

Porter, M.E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. pp. 139-140. New York: The Free Press.