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Question 1……………………………………………………………………………….. 2-3

Question 2……………………………………………………………………………4-5-6-7-8-9

References……………………………………………………………………………….. 10

1. What are the most significant differences between the planning/design/positioning

schools of strategic management and the resource based view?

Design school – Strategy as a process of formation (Mintzberg et al., 1998:p. 23-45)

Design school is centralized formation strategy in which the idea comes before the action. This

school focuses on identifying the opportunities according capabilities and constrains. And the

popular strategic planning tool for evaluating a project and a potential business venture as

designing school is to analyze SWOT – Strengths, Weaknesses, Opportunities and Threats. In the

simple view, designing school is a model of strategic – making which must match between

internal capabilities and external possibilities. Even though this school implies two different

directions, but interconnected, internal capabilities is the chances of success while external

appraisal is the keys of success.

Planning school – Strategy formation of a formal process (Mintzberg et al., 1998:p. 48-79)

This school concentrates on implementation by basing on the Design school: the SWOT analysis.

After finding out SWOT, the basic idea is to divide neatly into smaller steps which have been

supported with a lot of checklists, to focus on objectives and elaboration of operating costs and

budgets. Hence, this school must be made explicit in order that they can be carried out through

attention to objectives, budgets and operating plans.

Positioning school – Strategy formation as an analysis process (Mintzberg et al., 1998)

In contrast with design school and planning school with no limits on the strategies, positioning

school mentioned that only a few key strategies can fit any given firm. The main concept of this

school is to create strategies which are generic, specially common and identifiable positions in

the market. Mentioning the responsibilities in this school, analysts play a major role, feeding the

results to managers who control and decide the choices.

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 resource – based view

is the access way using the role of entrepreneurial resources as one of 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.

As following, there are some different points between 2 approaches like design/planning/position

school and resource based view.

The first difference is “structured and planned” or not. The resource-based view (RBV) has

no managerial implications while design, planning and positioning schools are formed under the

rational and prescriptive category. It means that RBV only tells managers to develop and obtain

valuable, rare, imitable and non-substitutable resources and develop an appropriate organization,

but it is silent on how this should be done (Connor, 2002; Miller, 2003) while design, planning

and positioning schools discuss how the strategy needs to be done through prescriptive

approaches. The prescriptive approaches mention the process of how to formulate, plan, develop

and implement the organization strategies by using historical and other data to create the rational

arguments. Then, the organization will base on these results to get its goals and achievements.

The second distinction is “Applicability”. The RBV’s applicability is limited while design,

planning and position schools can be less different towards large enterprises in the same

industry. The limitation of RBV’s application is mentioned that it only holds as long as the rules

of the game in the industry remain relatively fixed. In the unpredictable environment, in which

new technologies and/or new markets emerge and the value of resource can drastically change,

we need to go beyond the RBV to explain a firm’s sustainability (Barney, 2002)

The final difference is that RBV is not the theory of the firm while design/planning/positioning

schools are the theories of the firms. Strategy formation undertakes design school is the process

of conception, planning school is the a formal process and positioning school is an analysis

process (Shekhar, 2009). Hence, they have been considered the theories which any entrepreneurs

can base on to propose their strategy. In contrast, the RBV is no theory of the firm because it

does not render the RBV problematic as a theory of rents and sustainability (Conner, 1991). It

means that RBV has had no intention of explaining the existence and boundaries of firms

(Barney, 2005). Hence, we cannot find out any point that requires RBV to meet all criteria for

the theory of the firm.

2. How do these different approaches allow us to gain insights into the way successful

organisations execute strategy?

2.1.Case study 1: Metro Group

Metro Group is one of the leading retail and wholesale companies in the world. It operates in

some business sectors involving self-service wholesale trade, hypermarket, consumer electronic

stores, department store and online shopping. Metro Group conducts its business in over 33

countries across Europe, Asia and Africa. With all business activities, Metro Group always

promote high standards of living and growth by creating economic, social value and

environmental on behalf of customers, employees, investors and society.

To strive for a sustained positive developments year by year, Metro has formed the foundation

including 4 strategic focal points as position strategy (position school) of Metro in both

domestic and international countries. They are named Transform, Grow, Improve, Expand and

Innovate. Because of being a multinational corporation, all of these points Metro group takes

account of local requirements in different countries. Transform strategy can leverage Metro’s

strengths including adapting assortments to local demands, expanding own-brand assortment,

focusing on service activities and creating new sales channel. Grow strategy mentions Metro’s

strengths in making targeted investment in new products, services and chosen investments in its

sales divisions’ price level. Improve strategy regards how to increase its cost efficiency and

cash flow. As permanent cost optimization, Metro can make in the creation of added value for its

customers. By optimization of cash flow, it can create the founding source of its investments.

Expand strategy means the excellent expansion of its presence in many countries it has eyed

and done business such as the regions of European, Asia. Innovate strategy is the involvement

of all customers’ requirements and Metro always considers them both opportunities and

challenges facing up to. By leverage its strengths in tapping the broad expertise available in its

group, Metro can continue to strengthen its innovation.