Strategic management within a challenging market…

The following is an abstract from my MBA dissertation thesis. The title was Strategic moves towards Blue Oceans: The case of a Small Medium-Sized Manufacturer (SMM) in the UK. If you would like to learn more about some of the conclusions and methods used, please get in touch.

What could you do to find your own Blue Ocean? Clear Seas?

Small Medium Manufacturers (SMMs) and any other small businesses face individual challenges to grow or survive. More generally, they lack sufficient time, resources, open market access, suffer complexity, reliance on specialist knowledge, rely on a handful of owners, increased risk and cost associated to hiring, training and retention, cash flow, environmental uncertainty and struggles to profit from environmental and sustainable practice to name a few. From my own experience, often future strategy and plans receive less time, attention and focus than everyday events and reaction to them.

Our chosen case study, a small mature company, with experienced management in an ill-favoured industry competing in the business to business sector. Hence, with a uniform workforce, itis ripe to test against some recent strategic management theory.

“I think strategy is such a grand word for what we do. Our strategy on Monday is to get through to Tuesday.”

Business Owner

As a fractal of SMMs in the UK, Mould Tool Limited welcomed us and provided a real-world case study. The real name disguised chosen for anonymity reasons.  Serving a relatively mature industry of automotive manufacturing, Mould Tool Limited allowed open access to ask questions, test tools and collect evidence. The Management without fanfare or fuss had made previous assessments internally. However, the task ahead was for provision of an external perspective with consideration of new strategic management theory.

“We are very, very good at reacting to events. I’m not too sure that we are always very good at thinking about what events might happen.”

Business Owner

From an initial conversation with their leadership, it was a surprise to learn that a profitable small firm was so relaxed about their plans and strategy. Given business leadership is recommended to conduct a business and market situation assessment, there is much to do and gain from this study of Mould Tool Limited. Increased knowledge and awareness of range, effectiveness and options could improve decision making. Likewise, those that understand the approaches available may find problems easier to solve.

A question that took time to appreciate was whether recent strategic management thinking such as Blue Ocean Strategy (BOS) could help. The range of strategic management frameworks, models and tools can be confusing. From original competition theory (Porter, 1996), Real Options Theory (Luehrman, 1998; Trigeorgis and Reuer, 2017), business model innovation (Euchner and Ganguly, 2014; Girotra and Netessine, 2014), small business strategy (Box and Miller, 2011; Ensign, 2008; Lumpkin et al., 2010) and others besides. For businesses with scarce resources, there is little time left to take stock and review.

Find out about Blue Ocean Theory here

Comparison of a red and blue ocean

Hence, simple, effective and rapid self-assessments are even more necessary. This requires do-it-yourself tools that identify quickly what needs to change. To help these time scarce management teams, a simple, quick and effective assessment is needed. If meanwhile, lessons are identified to how to apply these frameworks and tools, we may discover new information helpful to others. Also, applied to Mould Tool Limited is an offer of advice and recommendation of some next steps.

Conclusion(s)

With some awareness of recent strategic management topics, there happened to be an opportunity to listen, assess and recommend strategic moves. But to assess our strategic moves towards Blue Oceans. In short, cautionary.

Firstly, (1) this case study paper should be approached with an air of caution. From this study, we can only insinuate, not draw conclusions that there is a change in perception from the interviewees. A causal link is difficult to determine. For one, it is statistically irrelevant. Could this perhaps be a shift in awareness of those interviewed about the position of Mould Tools.

However, (2) It is difficult to evidence with such a small sample size but perhaps the techniques used could be useful when applied on similar businesses with larger sample sets. The advantage of this survey was it was easy to deliver, before and after the interviews.

Also, (3) the information could be compared quickly to determine whether the types of questions were understood. The real lessons from this were future consideration to adapt, validate, repeat and extend. However, it appears that (a) BOS tools need interpretation; (b) BOS tools capture known more than radical strategic moves. This last point being a potential area for future research.

Furthermore, what BOS applied as above fails to explore how often this process of repeated strategic moves is needed. Although, strategy to some can suffer from various flaws; be it hype, disbelief or mockery. To ‘think out of the box’ or propose ‘Blue Sky Thinking’ are two examples that spring to mind and suggest more work is needed to convince naysayers. Further work for Mould Tool Limited will need to address significant considerations like the capacity for change. People in the business will need to be sold on any changes in strategy. This will also need significant communication, management and investment to help deliver any changes. BOS suffers from a distinctive, memorable but equally unfortunate name in this regard. However, from the work shown we hope to demonstrate that there are elements that may be applied to an SMM in the future.

Happy to hear your thoughts about these thoughts and how it could be usefully applied to your business.

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