What is Strategic Planning?

Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization's direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful.

What is a Strategic Plan?

A strategic plan is a document used to communicate with the organization the organizations goals, the actions needed to achieve those goals and all of the other critical elements developed during the planning exercise.

What is Strategic Management?

Strategic management is the comprehensive collection of ongoing activities and processes that organizations use to systematically coordinate and align resources and actions with mission, vision and strategy throughout an organization. Strategic management activities transform the static plan into a system that provides strategic performance feedback to decision making and enables the plan to evolve and grow as requirements and other circumstances change.

What Are the Steps in Strategic Planning & Management?

There are many different frameworks and methodologies for strategic planning and management. While there is no absolute rules regarding the right framework, most follow a similar pattern and have common attributes. Many frameworks cycle through some variation on some very basic phases: 1) analysis or assessment, where an understanding of the current internal and external environments is developed, 2) strategy formulation, where high level strategy is developed and a basic organization level strategic plan is documented 3) strategy execution, where the high level plan is translated into more operational planning and action items, and 4) evaluation or sustainment / management phase, where ongoing refinement and evaluation of performance, culture, communications, data reporting, and other strategic management issues occurs.

What Are the Attributes of a Good Planning Framework?

The Association for Strategic Planning (ASP), a U.S.-based, non-profit professional association dedicated to advancing thought and practice in strategy development and deployment, has developed a Lead-Think-Plan-Act rubric and accompanying Body of Knowledge to capture and disseminate best practice in the field of strategic planning and management. ASP has also

developed criteria for assessing strategic planning and management frameworks against the Body of Knowledge. These criteria are used for three primary purposes:

Ensure that the ASP Body of Knowledge is continuously updated to include frameworks that meet these criteria. Maintain a list of qualifying commercial and academic frameworks recommended for study and training, to prepare participants to sit for the three ASP certification examinations. Provide a resource and check list for practitioners as they refine and improve their organizations systems and for consultants as they improve their product and service offerings.

The criteria developed by the ASP are: 1. Uses a Systems Approach that starts with the end in mind. 2. Incorporate Change Management and Leadership Development to effectively transform an organization to high performance. 3. Provide Actionable Performance Information to better inform decision making. 4. Incorporate Assessment-Based Inputs of the external and internal environment, and an understanding of customers and stakeholder needs and expectations. 5. Include Strategic Initiatives to focus attention on the most important performance improvement projects. 6. Offer a Supporting Toolkit, including terminology, concepts, steps, tools, and techniques that are flexible and scalable. 7. Align Strategy and Culture, with a focus on results and the drivers of results. 8. Integrate Existing Organization Systems and Align the Organization Around Strategy. 9. Be Simple to Administer, Clear to Understand and Direct, and Deliver Practical Benefits Over the Long-Term. 10. Incorporate Learning and Feedback, to Promote Continuous Long-term Improvement. There are numerous strategic planning and management frameworks that meet these criteria, such as the Institute's Nine Steps to Success. For more information about the criteria, please visit the ASP website. For more information about strategic planning and management in general or for about how the Institute can help you, please consider our training, certification or consulting services, or contact us directly
Basic Financial Planning (Budgeting) James McKinsey (1889-1937), founder of the global management consultancy that bears his name, was a professor of cost accounting at the school of business at the University of Chicago. His most important publication, Budgetary Control (1922), is quoted as the start of the era of modern budgetary accounting.

Early efforts in corporate strategy were generally limited to the development of a budget, with managers realizing that there was a need to plan the allocation of funds. Later, in the first half of the 1900s, business managers expanded the budgeting process into the future. Budgeting and strategic changes (such as entering a new market) were synthesized into the extended budgeting process, so that the budget supported the strategic objectives of the firm. With the exception of the Great Depression, the competitive environment at this time was fairly stable and predictable.

Long-range Planning (Extrapolation) Long-range Planning was simply an extension of one year financial planning into five-year budgets and detailed operating plans. It involved little or no consideration of social or political factors, assuming that markets would be relatively stable. Gradually, it developed to encompass issues of growth and diversification. In the 1960s, George Steiner did much to focus business managers attention on strategic planning, bringing the issue of long-range planning to the forefront. Managerial Long-Range Planning, edited by Steiner focused upon the issue of corporate long-range planning. He gathered information about how different companies were using long-range plans in order to allocate resources and to plan for growth and diversification. A number of other linear approaches also developed in the same time period, including game theory. Another development was operations research, an approach that focused upon the manipulation of models containing multiple variables. Both have made a contribution to the field of strategy.

Strategic (Externally Oriented) Planning Strategic (Externally Oriented) Planning aimed to ensure that managers engaged in debate about strategic options before the budget was drawn up. Here the focus of strategy was in the business units (business strategy) rather than in the organization centre. The concept of business strategy started out as business policy, a term still in widespread use at business schools today. The word policy implies a hands-off, administrative, even intellectual approach rather than the implementation-focused approach that characterizes much of modern thinking on strategy. In the mid-1900s, business managers realized that external events were playing an increasingly important role in determining corporate performance. As a result, they began to look externally for significant drivers, such as economic forces, so that they could try to plan for discontinuities. This approach continued to find favor well into the 1970s. While the theorists were arguing, one large US Company was quietly innovating. General Electric Co.

(GE) had begun to develop the concept of strategic business units (SBUs) in the 1950s. The basic ideanow largely accepted as the normal and obvious way of going about things-was that strategy should be set within the context of individual businesses which had clearly defined products and markets. Each of these businesses would be responsible for its own profits and development, under general guidance from headquarters. The evolution of strategy began in the early 1960s, when a flurry of authoritative texts suddenly turned strategic planning from an issue of vague academic interest into an important concern for practicing managers. Prior to this strategy wasnt part of the normal executive vocabulary. Alfred Chandler (1918-) Influential figure in both strategy and business structure-Strauss Professor of Business History at Harvard since 1971. Chandler talks about the development of the management of a large company from history; in particular from the mid nineteenth century to the end of the First World War (what he calls the formative years of modern capitalism). During this period, the typical entrepreneurial or family firm gave way to larger organizations containing multiple units. A new form of management was needed because the ownermanager could not be everywhere at once. In addition, a new breed of manager was needed to operate in this environment the salaried professional. He advised splitting the functions of strategic thinking and line management. In Chandlers analysis, the effective organization now separates strategy and day-to-day operations. Strategy becomes the responsibility of managers at headquarters, leaving the unit managers to concentrate on the here and now in decentralized units. In effect, he was advising creating a line management who would carry out plans developed by a more serious staff function elsewhere. His influential book Strategy and Structure was published in 1962, appealing to many large companies that were having difficulty in coping with their size. In recent years it has come under heavy attack from critics, who maintain that strategy must be a line responsibility, decided as close as possible John Gardners Self-Renewal, published in 1964, which pointed out that organizations constantly need to reassess themselves, had the earliest real impact on managers. Like people, they need to keep renewing their skills and abilities something they can only do effectively through careful planning. Kirby Warren at Harvard looked in depth at what happened in a small number of companies to see what worked well and what didnt. In several companies for example, he found that the managers confused the strategic plan with its components in particular, the marketing plan was often assumed to be the same thing as the overall corporate plan. Wickham Skinner (1924-) who was based at Harvard since 1960, pointed out that an excessive focus on marketing Planning frequently led companies to forget about manufacturing needs until late in the day, when there was little room for manoeuvre. Skinner argued for a clear manufacturing strategy to

proceed in parallel with the marketing strategy. In many ways he was ahead of his time, for the concept of technology strategy or manufacturing strategy had only begun to take root in the 1980s and many manufacturing companies still have no one in charge of this aspect of their business. One particularly influential idea from skinner was the focused factory. He demonstrated that it was not normally possible for a production unit to focus on more than one style of manufacturing. Even if the same machines were used to produce basically similar products, if those products had very different customer demands that required a different manner of working, the factory would not be successful. For example, trying to produce equipment for the consumer market, where a certain error rate in production was compensated for by higher volume sales at a lower price, was incompatible with producing 100 per cent perfect product for the military. The most likely outcome was a compromise that satisfies no one. Paul Lawrence and Jay Lorsch, also from Harvard, put forth their contingency theory of organizations. They argued that every organization is composed of multiple paradoxes. On the one hand, each department or unit has its own objectives and environment. It responds to those in its own way, both in terms of how it is structured, the time horizons people assume, the formality or informality of how it goes about its tasks and so on. All these factors contribute towards what they call differentiation. At the same time each unit needs to work with others in pursuit of common goals. That requires a certain amount of integration, to ensure that they are all working with rather than against each other. In their studies of US firms in a variety of manufacturing industries, they found that companies with a high level of differentiation could also have a high level of integration. The reason was simple; the greater the differentiation, the more potential for conflict between departments and therefore the greater the need for mechanisms to help them work together. Their work forced many managers to understand that organizations were not fixed; that strategy and planning had to be adapted to each segment of the environment with which they dealt. Igor Ansoff (1918-) through his unstintingly serious, analytical and complex, Corporate Strategy, published in 1965, had a highly significant impact on the business world. It propelled consideration of strategy into a new dimension. It was Ansoff who introduced the term strategic management into the business vocabulary. Ansoffs sub-title was An Analytical Approach to Business Policy for Growth and Expansion. The end product of strategic decisions is deceptively simple; a combination of products and markets is selected for the firm. This combination is arrived at by addition of new product-markets, divestment from some old ones, and expansion of the present position, writes Ansoff. While the end product was simple, the processes and decisions which led to the result produced a labyrinth followed only by the most dedicated of managers. Analysis and in particular gap analysis (the gap between where you are now and where you want to be) was the key to unlocking strategy. The book also brought the concept of synergy to a wide audience for the first time. In Ansoffs original creation it was simply summed up as the 2+2=5 effect. In his later books, Ansoff refined his definition

of synergy to any effect which can produce a combined return on the firms resources greater than the sum of its parts. While Corporate Strategy was a notable book for its time, it produced what Ansoff himself labeled paralysis by analysis; repeatedly making strategic plans which remained unimplemented. Reinforced by his conviction that strategy was a valid, if incomplete, concept, Ansoff followed up Corporate Strategy with Strategic Management (1979) and Implanting Strategic Management (1984). His other books include Business Strategy (1969), Acquisition Behavior in the US Manufacturing Industry, 1948-1965 (1971), From Strategic Planning to Strategic Management (1974), and The New Corporate Strategy (1988). Implanting Strategic Management, co-written with Edward McDonnell, records much of the research conducted by Ansoff and his associates and reveals a number of ingenious aspects of the Ansoff model. These include his approach to using incremental implementation for managing resistance to change, product portfolio analysis, and issue management systems. The Problem with Strategic Planning (Analysis): The fuel for the modern growth in interest in all things strategic has been analysis. While analysis has been the watchword, data has been the password. Managers have assumed that anything which could not be analyzed could not be managed. The belief in analysis is part of a search for a logical commercial regime, a system of management which will, under any circumstances, produce a successful result. Indeed, all the analysis in the world can lead to decisions which are plainly wrong. IBM had all the data about its markets, yet reached the wrong conclusions. There are two basic problems with the reliance on analysis. First, it is all technique. The second problem is more fundamental. Analysis produces a self-increasing loop. The belief is that more and more analysis will bring safer and safer decisions. The traditional view is that strategy is concerned with making predictions based on analysis. Predictions, and the analysis which forms them, lead to security. The bottom line is not expansion, future growth or increased profitability-it is survival. The assumption is that growth and increased profits will naturally follow. If, by using strategy, we can increase our chances of predicting successful methods, then our successful methods will lead us to survival and perhaps even improvement. So, strategy is to do with getting it right or, as the more competitive would say, winning. Of course it is possible to win battles and lose wars and so strategy has also grown up in the context of linking together a series of actions with some longer-term goals or aims. This was all very well in the 1960s and for much of the 1970s. Predictions and strategies were formed with confidence and optimism (though they were not necessarily implemented with such sureness). Security could be found. The business environment appeared to be reassuringly stable. Objectives could be set and strategies developed to meet them in the knowledge that the overriding objective would not change. Such an approach, identifying a target and developing strategies to achieve it, became known as

Management by Objectives (MBO). Under MBO, strategy formulation was seen as a conscious, rational process. MBO ensured that the plan was carried out. The overall process was heavily logical and, indeed, any other approach (such as an emotional one) was regarded as distinctly inappropriate. The thought process was backed with hard data. There was a belief that effective analysis produced a single, right answer; a clear plan was possible and, once it was made explicit, would need to be followed through exactly and precisely. In practice, the MBO approach demanded too much data. It became overly complex and also relied too heavily on the past to predict the future. The entire system was ineffective at handling, encouraging, or adapting to change. MBO simplified management to a question of reaching A from B using as direct a route as possible. Under MBO, the ends justified the means. The managerial equivalent of highways were developed in order to reach objectives quickly with the minimum hindrance from outside forces. Henry Mintzbergs book The Rise and Fall of Strategic Planning was first published in 1994. The confusion of means and ends characterizes our age, Henry Mintzberg observes and, today, the highways are likely to be gridlocked. When the highways are blocked managers are left to negotiate minor country roads to reach their objectives. And then comes the final confusion: the destination is likely to have changed during the journey. Equally, while MBO sought to narrow objectives and ignore all other forces, success (the objective) is now less easy to identify. Todays measurements of success can include everything from environmental performance to meeting equal opportunities targets. Success has expanded beyond the bottomline. Strategic Planning to Strategic Management Strategic Planning to Strategic Management: Strategic planning was a plausible invention and received an enthusiastic reception from the business community. But subsequent experience with strategic planning led to mixed results. In a minority of firms, strategic planning restored their profitability and became an established part of the management process. However, a substantial majority encountered a phenomenon, which was named paralysis by analysis: strategic plans were made but remained unimplemented, and profits/growth continued to stagnate. Claims were increasingly made by practitioners and some academics that strategic planning did not contribute to the profitability of firms. In the face of these claims, Ansoff and several of his colleagues at Vanderbilt University undertook a four-year research study to determine whether, when paralysis by analysis is overcome, strategic planning increased profitability of firms. Ansoff looked again at his entire theory. His logic was impressively simple either strategic planning was a bad idea, or it was part of a broader concept which was not fully developed and needed to be enhanced in order to make strategic planning effective. An early fundamental answer perceived by Ansoff was that strategic planning is an incomplete instrument for managing change, not unlike an automobile with an engine but no steering wheel to convert the engines energy into movement.

Characteristically, he sought the answer in extensive research. He examined acquisitions by American companies between 1948 and 1968 and concluded that acquisitions which were based upon an articulated strategy fared considerably better than those which were opportunistic decisions. The result of the research was a book titled Acquisition Behavior of US Manufacturing Firms, 1945-1963. In 1972 Ansoff published the concept under the name of Strategic Management through a pioneering paper titled The Concept of Strategic Management, which was ultimately to earn him the title of the father of strategic management. The paper asserted the importance of strategic planning as a major pillar of strategic management but added a second pillar the capability of a firm to convert written plans into market reality. The third pillar- the skill in managing resistance to change was to be added in the 1980s. Ansoff obtained sponsorship from IBM and General Electric for the first International Conference on Strategic Management, which was held in Vanderbilt in 1973 and resulted in his third book, From Strategic Planning to Strategic Management. The complete concept of strategic management embraces a combination of strategic planning, planning of organizational capability and effective management of resistance to change, typically caused by strategic planning. Ansoff says that strategic management is a comprehensive procedure which starts with strategic diagnosis and guides a firm through a series of additional steps which culminate in new products, markets, and technologies, as well as new capabilities. Strategic Management aimed to give people at all levels the tools and support they needed to manage strategic change. Its focus was no longer primarily external, but equally internal how can the organization seize and maintain strategic advantage by using the combined efforts of the people that work in it? Between 1974 and 1979 Ansoff developed a theory which embraces not only business firms but other environment-serving organizations. The resulting book titled Strategic Management, was published in 1979

1. Definition
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Business Dictionary defines a corporate strategy as a strategy that recognizes the factors that are currently affecting the firm and its competitors and the factors that may affect the firm and its competitors in the future. The firm develops policies and practices to establish a new and creative role that will address those factors, giving the firm the competitive advantage.

Approach
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Corporate strategy is concerned with reach, competitive contact, managing activities and interrelationships and management practices, according to Quick MBA. Reach means identifying issues that are corporate issues such as deciding which types of businesses the corporation should involve itself with and deciding

how the business will be combined and overseen. Competitive contact means deciding where the focus areas for competition are within the corporation. Managing activities and interrelationships involves developing financial and personal relationships with other business units so the firm may have a good rapport with those other businesses. Managing activities involves deciding on a centralized, direct, leadership or decentralized, indirect, leadership that relies on outsides influence, persuasion and rewards, according to Quick MBA. Sponsored Links webinars Improve your telecom skills Understanding your phone system www.allamb.com

Types
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Within the corporate strategy, there are three subtypes. A growth strategy seeks to expand a firm's sales, profits and market share. Typical growth strategies include: a concentration strategy, market penetration through efficient service of a limited product; a vertical integration strategy, the firm takes on additional responsibility -- i.e., begins supplying the product or distributing the product; and a diversification strategy, concentric diversification adds different products into the mix that are related to the firm's existing products and conglomerate diversification adds products into the mix that are not related to the firm's existing products. A stability strategy is used when a firm is satisfied with its current situation and seeks to keep that situation "as is,' according to Reference for Business.

Related Strategies
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Other strategies that are related to the corporate strategy are the business unit level strategy and the functional level strategy. With a business unit level strategy, the focus is less on the production of goods and more about gaining a competitive advantage with the products that were already produced under the corporate strategy, according to Quick MBA. A functional level strategy is concerned with the efficient operating of individual business departments, says quick MBA.

\ Strategy can be formulated on three different levels:

corporate level business unit level functional or departmental level.

While strategy may be about competing and surviving as a firm, one can argue that products, not corporations compete, and products are developed by business units. The role of the corporation then is to manage its business units and products so that each is competitive and so that each contributes to corporate purposes. Consider Textron, Inc., a successful conglomerate corporation that pursues profits through a range of businesses in unrelated industries. Textron has four core business segments:

Aircraft - 32% of revenues Automotive - 25% of revenues Industrial - 39% of revenues Finance - 4% of revenues.

While the corporation must manage its portfolio of businesses to grow and survive, the success of a diversified firm depends upon its ability to manage each of its product lines. While there is no single competitor to Textron, we can talk about the competitors and strategy of each of its business units. In the finance business segment, for example, the chief rivals are major banks providing commercial financing. Many managers consider the business level to be the proper focus for strategic planning.

Corporate Level Strategy Corporate level strategy fundamentally is concerned with the selection of businesses in which the company should compete and with the development and coordination of that portfolio of businesses. Corporate level strategy is concerned with:

Reach - defining the issues that are corporate responsibilities; these might include identifying the overall goals of the corporation, the types of businesses in which the corporation should be involved, and the way in which businesses will be integrated and managed. Competitive Contact - defining where in the corporation competition is to be localized. Take the case of insurance: In the mid-1990's, Aetna as a corporation was clearly identified with its commercial and property casualty insurance products. The conglomerate Textron was not. For Textron, competition in the insurance markets took place specifically at the business unit level, through its subsidiary, Paul Revere. (Textron divested itself of The Paul Revere Corporation in 1997.) Managing Activities and Business Interrelationships - Corporate strategy seeks to develop synergies by sharing and coordinating staff and other resources across business units, investing financial resources across business units, and

using business units to complement other corporate business activities. Igor Ansoff introduced the concept of synergy to corporate strategy. Management Practices - Corporations decide how business units are to be governed: through direct corporate intervention (centralization) or through more or less autonomous government (decentralization) that relies on persuasion and rewards.

Corporations are responsible for creating value through their businesses. They do so by managing their portfolio of businesses, ensuring that the businesses are successful over the long-term, developing business units, and sometimes ensuring that each business is compatible with others in the portfolio.

Business Unit Level Strategy A strategic business unit may be a division, product line, or other profit center that can be planned independently from the other business units of the firm. At the business unit level, the strategic issues are less about the coordination of operating units and more about developing and sustaining a competitive advantage for the goods and services that are produced. At the business level, the strategy formulation phase deals with:

positioning the business against rivals anticipating changes in demand and technologies and adjusting the strategy to accommodate them influencing the nature of competition through strategic actions such as vertical integration and through political actions such as lobbying.

Michael Porter identified three generic strategies (cost leadership, differentiation, and focus) that can be implemented at the business unit level to create a competitive advantage and defend against the adverse effects of the five forces.

Functional Level Strategy The functional level of the organization is the level of the operating divisions and departments. The strategic issues at the functional level are related to business processes and the value chain. Functional level strategies in marketing, finance, operations, human resources, and R&D involve the development and coordination of resources through which business unit level strategies can be executed efficiently and effectively.

Functional units of an organization are involved in higher level strategies by providing input into the business unit level and corporate level strategy, such as providing information on resources and capabilities on which the higher level strategies can be based. Once the higher-level strategy is developed, the functional units translate it into discrete action-plans that each department or division must accomplish for the strategy to succeed A few years ago, a consultant posed a question to thousands of executives: Is your industry facing overcapacity and fierce price competition? All but one said yes. The only no came from the manager of a unique operationthe Panama Canal! This manager was fortunate to be in charge of a venture whose services are desperately needed by shipping companies and that offers the only simple route linking the Atlantic and Pacific Oceans. The canals success could be threatened if transoceanic shipping was to cease or if a new canal were built. Both of these possibilities are extremely remote, however, so the Panama Canal appears to be guaranteed to have many customers for as long as anyone can see into the future. When an organizations environment is stable and predictable, strategic planning can provide enough of a strategy for the organization to gain and maintain success. The executives leading the organization can simply create a plan and execute it, and they can be confident that their plan will not be undermined by changes over time. But as the consultants experience shows, only a few executivessuch as the manager of the Panama Canalenjoy a stable and predictable situation. Because change affects the strategies of almost all organizations, understanding the concepts of intended, emergent, and realized strategies is important (Figure 1.2 "Strategic Planning and Learning: Intended, Emergent, and Realized Strategies"). Also relevant are deliberate and nonrealized strategies. The relationships among these five concepts are presented in Figure 1.3 "A Model of Intended, Deliberate, and Realized Strategy". [1] Figure 1.2 Strategic Planning and Learning: Intended, Emergent, and Realized Strategies

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Intended and Emergent Strategies

Figure 1.3 A Model of Intended, Deliberate, and Realized Strategy

Reproduced with permission from Carpenter, M., Bauer, T., & Erdogan, B. 2011. Principles of Management. Irvington, NY: Flat World Knowledge. An intended strategy is the strategy that an organization hopes to execute. Intended strategies are usually described in detail within an organizations strategic plan. When a strategic plan is created for a new venture, it is called a business plan. As an undergraduate student at Yale in 1965, Frederick Smith had to complete a business plan for a proposed company as a class project. His plan described a delivery system that would gain efficiency by routing packages through a central hub and then pass them to their destinations. A few years later, Smith started Federal Express (FedEx), a company whose strategy closely followed the plan laid out in his class project. Today, Frederick Smiths personal wealth has surpassed $2 billion, and FedEx ranks eighth among the Worlds Most Admired Companies according to Fortune magazine. Certainly, Smiths intended strategy has worked out far better than even he could have dreamed.
[2]

Emergent strategy has also played a role at Federal Express. An emergent strategy is an unplanned strategy that arises in response to unexpected opportunities and challenges. Sometimes emergent strategies result in disasters. In the mid-1980s, FedEx deviated from its intended strategys focus on package delivery to capitalize on an emerging technology: facsimile (fax) machines. The firm developed a service called ZapMail that involved documents being sent electronically via fax machines between FedEx offices and then being delivered to customers offices. FedEx executives hoped that ZapMail would be a success because it reduced the delivery time of a document from overnight to just a couple of hours. Unfortunately, however, the ZapMail system had many technical problems that frustrated customers. Even worse, FedEx failed to anticipate that many businesses would simply purchase their own fax machines. ZapMail was shut down before long, and FedEx lost hundreds of millions of dollars following its failed emergent strategy. In retrospect, FedEx had made a costly mistake by venturing outside of the domain that was central to its intended strategy: package delivery. [3] Emergent strategies can also lead to tremendous success. Southern Bloomer Manufacturing Company was founded to make underwear for use in prisons and mental hospitals. Many managers of such institutions believe that the underwear made for retail markets by companies such as Calvin Klein and Hanes is simply not suitable for the people under their care. Instead, underwear issued to prisoners needs to be sturdy and durable to withstand the rigors of prison activities and laundering. To meet these needs, Southern Bloomers began selling underwear made of heavy cotton fabric. An unexpected opportunity led Southern Bloomer to go beyond its intended strategy of serving institutional needs for durable underwear. Just a few years after opening, Southern Bloomers performance was excellent. It was servicing the needs of about 125 facilities, but unfortunately, this was creating a vast amount of scrap fabric. An attempt to use the scrap as stuffing for pillows had failed, so the scrap was being sent to landfills. This was not only wasteful but also costly. One day, cofounder Don Sonner visited a gun shop with his son. Sonner had no interest in guns, but he quickly spotted a potential use for his scrap fabric during this visit. The patches that the

gun shop sold to clean the inside of gun barrels were of poor quality. According to Sonner, when he saw one of those flimsy woven patches they sold that unraveled when you touched them, I said, Man, thats what I can do with the scrap fabric. Unlike other gun-cleaning patches, the patches that Southern Bloomer sold did not give off threads or lint, two by-products that hurt guns accuracy and reliability. The patches quickly became popular with the military, police departments, and individual gun enthusiasts. Before long, Southern Bloomer was selling thousands of pounds of patches per month. A casual trip to a gun store unexpectedly gave rise to a lucrative emergent strategy. [4]

Realized Strategy
A realized strategy is the strategy that an organization actually follows. Realized strategies are a product of a firms intended strategy (i.e., what the firm planned to do), the firms deliberate strategy (i.e., the parts of the intended strategy that the firm continues to pursue over time), and its emergent strategy (i.e., what the firm did in reaction to unexpected opportunities and challenges). In the case of FedEx, the intended strategy devised by its founder many years ago fast package delivery via a centralized hubremains a primary driver of the firms realized strategy. For Southern Bloomers Manufacturing Company, realized strategy has been shaped greatly by both its intended and emergent strategies, which center on underwear and guncleaning patches. In other cases, firms original intended strategies are long forgotten. A nonrealized strategy refers to the abandoned parts of the intended strategy. When aspiring author David McConnell was struggling to sell his books, he decided to offer complimentary perfume as a sales gimmick. McConnells books never did escape the stench of failure, but his perfumes soon took on the sweet smell of success. The California Perfume Company was formed to market the perfumes; this firm evolved into the personal care products juggernaut known today as Avon. For McConnell, his dream to be a successful writer was a nonrealized strategy, but through Avon, a successful realized strategy was driven almost entirely by opportunistically capitalizing on change through emergent strategy