Andrew's Model

Kenneth Andrews, a key figure in the development of corporate strategy as a field of study, defined strategy as: "The pattern of objectives, purposes, goals and the major policies and plans for achieving these goals stated in such a way to define what business the company is in or is to be and the kind of the company it is, or it is to be."

This definition comes from his contributions to the concept of corporate strategy in the context of the seminal work "The Concept of Corporate Strategy." Andrews and other scholars like Igor Ansoff and Bruce Henderson played a significant role in shaping the strategic management discipline during the mid-20th century.

Key Components of Andrews' Strategy Definition

Andrews' definition of strategy highlights several critical components that remain foundational in strategic planning and management:

• Objectives, Purposes, and Goals: These elements outline the desired outcomes or states that an organization aims to achieve. They provide direction and endpoints for strategic efforts.
• Major Policies and Plans: These are the means by which goals are to be achieved. Policies set out guidelines for decision-making, while plans detail the specific actions or steps needed to pursue the organization's goals.
• Business Definition: This component stresses the importance of clearly defining the scope of the organization's activities — what business it is in and what it intends to be. This involves considering the markets served, customer needs addressed, and types of products or services offered.
• Company Identity: This refers to the nature of the company itself — its character, values, culture, and how it positions itself in the market and society. This aspect of strategy involves self-awareness and how the organization perceives its role and identity.

Implications of Andrews' Strategy Definition

Andrews' conceptualization of strategy emphasizes the integrated and comprehensive nature of strategic planning. It suggests that strategy is not just about competing in the market but also involves a deep understanding of the organization's purpose, its operational domain, and its identity. This holistic approach ensures that strategic decisions are aligned with the organization's core values and long-term objectives.

Moreover, Andrews introduced the notion of SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) as a framework for assessing an organization's strategic position, which has become a staple tool in strategic planning. The goal of strategy, in Andrews' view, is to match the organization's internal capabilities with the external opportunities and challenges it faces, while also addressing its weaknesses and mitigating threats. Conclusion

Kenneth Andrews' definition of strategy has had a lasting impact on the field of strategic management, offering a comprehensive framework that guides organizations in defining their direction, scope, and character. By emphasizing the need for alignment between an organization's goals, policies, business domain, and identity, Andrews' work has provided a foundational perspective on how companies can navigate complex business environments and achieve sustainable success.

See Also

• SWOT Analysis: An essential tool for strategic planning that helps organizations identify their internal strengths and weaknesses, as well as external opportunities and threats.
• Corporate Strategy: Discussing how organizations develop strategies at the corporate level to achieve their objectives, including growth strategies, stability strategies, and retrenchment strategies.
• Competitive Strategy: Exploring how businesses strive to achieve a sustainable competitive advantage over their rivals, based on the work of Michael Porter and others.
• Business Ethics and Corporate Social Responsibility (CSR): Examining the ethical considerations and the role of CSR in strategic management, reflecting on how businesses can contribute to societal goals.
• Environmental Scanning: Covering the process by which companies monitor their external and internal environments to identify early signs of opportunities and threats that may affect their plans.
• Strategic Decision Making: Discussing the processes and models that guide how decisions are made at the strategic level, including rational decision-making models and bounded rationality.
• Resource-Based View (RBV): A theory that emphasizes the internal capabilities of the firm in developing a competitive advantage through the acquisition and management of valuable, rare, inimitable, and non-substitutable (VRIN) resources.
• Value Chain Analysis: A tool for identifying and evaluating the primary and support activities that create value for customers, introduced by Michael Porter.
• Corporate Governance: The system of rules, practices, and processes by which a firm is directed and controlled, focusing on the relationship between the board of directors, shareholders, management, and other stakeholders.
• Change Management: The methods and manners in which a company describes and implements change within both its internal and external processes.
• Strategic Leadership: The management style for guiding employees to achieve a company's objectives, focusing on vision, values, and the creation of a strong organizational culture.
• Market Analysis: Techniques for analyzing the dynamics of specific markets within an industry, including market segmentation, market growth, and competitive analysis.