WEEK 21

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

Emergent strategy is an unplanned strategy that arise due to the unexpected opportunities and challenges in an organization. It is interelated with three areas position, choice and action. The strategy is developed through process of learning, adjustment and experiments.

The advantage of emergent strategy is:

• It is flexible and in the constantly changing environment it often allows business to adjust to the environment by responding to threats and exploiting the opportunities.
• It adopts with the human needs and continuously develops over time.
• It promotes innovation and entrepreneurship
• It encourages product development as it focuses more on the demand and need of the market.
• The structure encourages informal communication and networks leading to development of task forces to from logical solutions to problems.

Disadvantages of emergent strategy:

• Due to its informal structure business may lose its strategic direction and control
• It often has unclear objectives
• It due to its uncertainty in nature it can be costly without any guarantee of success
• It is more risker than planned strategy     

Case Study: Honda

2. Did Honda's Entry strategy demonstrate the characteristics of 'logical instrumentalism'?

Logical instrumentalism refers to approach towards strategic management where the strategies in an organization emerge overtime in an incremental way. According to Quinn, “Logical instrumentalism is the development of strategy by experimentation and learning from partial commitments rather than through global formulation of total strategies”.

In my opinion ,Honda demonstrated the features of logical instrumentalism because of the following reasons:

• In the early 1960s Honda had huge production volumes of motorcycles in the domestic market that lead to lower costs through the use of specialized production technology, which consequently lowered the price of the product itself. This led increased market share and therefore profitability.
• After the Second World War, Honda started to push in the US market with smallest lightweight motorcycles. They spend mostly on marketing its product though the sales were very low due to the consumer’s negative perceptions of bikes in the US market.
• They promoted the motorcycles to be fun, easy to ride and cheap to purchase . they basically used emergent strategy by creating its demand slowly over time giving them growth.
• They marketed the product 50cc Super cubs that were less success in japan to US market where demand was high where everything was bigger and luxurious.
• Honda was quick to learn and react to the unexpected changes to adapt to the market demands. The strategy evolved with organization rather than being bold and absolute guidance of a leader.
• According to Quinn’s interpretation Honda was genuine dream factory, fostering an individualist and bottom up anarchy, which is somehow both creative and productive. ( Mair A.,1999)
• In 1966, US market share of motorcycle was:

Motorbike (Brand)	% Shares
Harley Davidson	4%
Yamaha	11%
Suzuki	11%
BSA/ Triumph and others	11%
Honda	63%

·       

 References:

 Strategic Management. [ONLINE] Available at: http://www.essay.uk.com/free-management-essays/strategic-management.php. [Accessed 09 December 13].   

Andrew Mair. 1999. Learning from Japan? Interpretationof Honda Motors . [ONLINE] Available at:http://www.nissan.ox.ac.uk/sites/sias/files/documents/NOPS29_0.pdf. [Accessed 09 December 13]