Running Head: STRATEGIC MANAGEMENT MODELS

Strategic Management Models

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STRATEGIC MANAGEMENT MODELS

Introduction
Strategic management refers to the formulation as well as the implementation of the goals
and initiatives which have been assumed by the top management of the organization on behalf of
the shareholders. The implementation is on the basis of the available resources, and this is why
most strategic managers commence their responsibilities with the assessment and understanding
of the factors which define the internal as well as the external environments of the organization
in question (Hitt et al., 2012b). A strategic manager is a professional who is able to tell what can
work and what might not work as expected, and this conclusion is based upon the prevailing
circumstances. In case of the changes in any of the environments, such as the adoption of a piece
of emergent technology or the increased availability of raw materials, a strategic manager may
have a different conclusion. The changes are usually referred to as trends (Hill & Jones, 2009).
In strategic management, the theory of resource dependence is developed on the notion
that there are scarce resources in the environment and organizations depend wholly on the
limited resources for their survival. On this basis of this observation, organizations must be able
to exploit the available resources competitively in order to achieve their goals, objectives, as well
as survive in the specific environment. This is what is also referred to as the optimal exploitation
of the opportunities which are available (Hitt et al., 2012b).
On the other hand, contingent theory emphasize that organizations which adapt to their
environment perform better than the organizations that do not. It also argues that mismatched
organization characteristics prevent a couple of them from attaining natural harmony within its
environment. Organizations may adapt to the environment by either transforming themselves or
making changes to the environment. The latter is difficult, especially in cases where the
environment in question is big and complicated (Elmore, 2016). This paper is a detailed

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discussion on these two models and their application during the penetration of new global
markets. The activities of the Coca-Cola Bottling Company United, Inc. are used as the case in
point.
Comparison and Contrast of Resource-Based and Contingent Theories
Both resource dependent theory and contingent theory are strategic management models
which are developed under the notion that organizations rely much on the environment for
survival. The fitness of organizations to the environment based on the resources available is
crucial: it is actually the bottom-line in this case. This is on the basis of the fact that resources are
scarce and limited; and, therefore, competition happens to be stiff (Doole & Lowe, 2008). The
capacity of the firm to locate and have these resources utilized as is expected depend on its
experience as well as the availability of funds. Although the level of success of an organization is
not defined by the activities of the competitors, it is imperative to appreciate that continued
research and development is valuable if an organization is to orient its internal environment in a
tactical manner (Wilson, 2014).
Contingent theory argues that high performance in organizations is associated with
contingencies which include the level of available technology, the strategy being applied, the size
of the organization in question, as well as the environment. This is in regards to the organization
structure in a given firm (Ghofar & Islam, 2014). Any alteration which is made to these
contingencies might have a serious impact to the organization, and this is unless some
appropriate strategic enhancements are made. It is, therefore, concluded that structural
adjustments are needed and are important in cases where the managers feel that performance has
been derailed in one way or the other. Evolution and advancement of contingent theory has found
gender diversity as a factor that influences organizations outcome (Donaldson, 2001).

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It is argued that gender-diverse management has positive effects on the growth of the firm
in question. This is because of the possibility to take care of the cultural issues in a holistic
manner. The contingency theory emphasizes on the fact that when an organization utilizes the
same methods of strategic management and the same techniques overtime, the outcomes
becomes volatile. These variables make up the internal environment of an organization and the
dynamics of external environment organization. On the other hand, resource dependence theory
is based on a goal reduction of dependency on other organizations by ensuring that they have
vital resources to an extent that other organizations do not have control over them (Ghofar &
Islam, 2014).
Analysis of Implications on Organizations Penetration to Global Markets
Contingent and resources based theories of strategic management are models in support
of organizational management activities. These activities are used to focus resources and energy,
set priorities, strengthen operations and ensure that stakeholders and employees are working
towards common goals and objectives (Enders, 2012). Both models provide a comprehensive
collection of activities that are ongoing and processes what organizations use to align and
coordinate resources and actions with a vision, strategy and a mission throughout an
organization. These models would help an organization penetrate in the global market in through
their proposed way of effective management (Barrar & Gervais, 2006).
Resource dependent theory emphasis on resource endowment this is a strategy for an
organization to achieve its goals and objective which has both positive and negative impacts.
This is in regards to the penetration of the organization to the global market. For instance,
employees knowledge value is a form of resource to an organization which has a clear impact on
organization results (Key, 2014). An organization with the right human capital will in most cases

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be successful and meet their goals by themselves without relying on the external forces.
However, with globalization a lot of knowledge sharing and consolidation is required as
organizations try to come up with solutions for unsolved economic, social or financial issues and
challenges (Ghofar & Islam, 2014).
Organizational resources give a sustained competitive advantage whenever they are rare,
valuable, and inimitable and lack substitute. Resultant to this an organization becomes highly
profitable, gets higher product quality, less rotation, lower cost of production and manufacturing
and has a faster implementation and acceptation of organizational strategy. A self-reliant
organization is likely to take this under their control and in some instances may succeed even in
global market. But, most often than not getting into a new environment a firm may first need to
get more information and a good base for their activities and thus to some extent heterogeneity,
diversification and growth are much relational (Key, 2014).
Contingent theory also applies in organization expansion, diversification and
globalization. As long as there is sustainability of the contingencies which include technology
level, strategy, organizational size, as well as the environment then penetration into a global
market is achievable. With the right strategy an organization is able to thrive and grow to achieve
the set goals. For instance, penetration into global market needs a well-laid strategy to capture
and retain the market. Also a favorable environment in the global market will enable any
organization to effectively penetrate and manage the business. The business environment is the
determinant of an organizations strategic management success and not even it is managed
(Fagan & Munck, 2009).

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The Coca-Cola Bottling Company United, Inc.

The Coca-Cola Bottling Company United, Inc. is based in the American City of
Birmingham, Alabama, and was founded in 1902. The company has 35 centers of distribution
which are located in seven states in the South East. The organization is the third largest bottler
among the private owned firms operating in that line. It has provided a significant amount of
employment opportunities, both in the United States as well as all over the world. The company
produces and distributes more than 750 beverages. It company focuses on quality, excellence,
and integrity; and the clients feel respected and valued. The clients first policy is what guides
the firms day to day activities (Elmore, 2016).
The companys mission is to increase as well as sustain its value for the greater benefit of
its consumers, associates, customers, owners, and the community in general. They envision being
the most respected supplier of consumer products in the market: this has actually been the stated
goal of the Coca-Cola Bottling Company United, Inc.s Northern America division (Doole &
Lowe, 2008). It is a company that capitalizes on sustainability where it empowers women
through entrepreneurship and among others focus on well-being by inspiring healthier and happy
lives. It is also innovative, and helps in supporting the local communities in a variety of means.
Its choice of corporate social responsibility is defined by the market in question as not every
society has the same needs (Morris, 2014).
I purposely settled on this organization in my analysis since it has a mission to penetrate
the global market with its refreshments and other related products. The stakeholders view quality
as some of the most important factors which will ensure success. The company has managed to
get into business in most countries in the world, irrespective of their economic statuses. For
instance, while Africa is still an emergent region with poor infrastructure, the Coca-Cola Bottling

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Company United, Inc. has been able to exploit every segment of the market; including those that
are in deep rural areas (Fagan & Munck, 2009). One of the strategies that the company uses is
creating business opportunities for the local retailers; and significant attempts are made to avoid
being influenced by the politics of the day. Several local investors, especially those at the end of
the supply chain, have argued that the company has been their reliable supporter for a significant
period of time (Doole & Lowe, 2008).
The company continues to grow and diversify as it focuses more on innovation that is allround and comprehensive. This includes; product innovation, marketing innovation, system
innovation and sustainability innovation. Consequently the company envisions growing to other
countries as they identify opportunities of new market as well as new strategies for the already
existing markets. The Coca-Cola Bottling Company United, Inc. might be attempting to
penetrate into Eritrea in Africa. This is because the demand for the products of the Coca-Cola
Bottling Company United, Inc. has increased greatly in every corner of Africa. In fact, even in
such new markets as Eritrea, there is evidence that the locals appreciate the quality of
commodities on offer (Fagan & Munck, 2009; Zonggui, L. (2015).
The economy of Eritrea is improving and, consequently, the regional division has made a
proposal to engage with the local investors in that country, just like it is happening in several
other regions of the world. The company not only provides its products in the host country but
also bring forth other benefits including employment opportunities as well as infrastructure
improvement (Nothnagel, 2008). Eritrea might actually benefit from doing business with the
Coca-Cola Bottling Company United, Inc., and this might actually help improve the situation in
many communities around the country. The company is adequately endowed with the necessary

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resources, and the continued success is evidence enough that the strategy being applied is the
right approach to penetrate the global market.
Strengths and Weaknesses of Resource Based Theory
The resource based theory is a useful strategic management tool that has attracted
attention of a growing number of business researchers. One of the major strength that enables an
organization to manage its globalization effort is the fact that the model combines both
organizational and strategic insights (Hitt et al., 2012a). It inspires the organization by explaining
the internal resources that can lead them to acquisition of sustained organizations competitive
advantage. These resources are the strengths of a company and are categorized as human capital,
organizational capital and physical capital resources. Competitive advantage by a firm results
when its strategies are not implemented by other countries and becomes sustained when
competitors cannot duplicate their strategies (Nothnagel, 2008).
The concept of resource based approach to strategy analysis is fundamental for
achievement of sustained competitive advantage. An organization is guided to possess valuable,
inimitable, rare and non-substitutable resources through formulation of strategies of
management. The strategy ensures that a firm is able to meet profitability and returns that are
above average which is every firms goal. The theory also motivates organizations to possess and
control their resources without external assistance making them self-reliant. The resource based
framework is conceptually grounded for the purpose of assessing the weaknesses and strengths
of the resources in a firm (Benyon & Dunkerley, 2014).
The model not only focuses on value results but also on its durability. This helps
managers to identify and select on important strengths in a given market that provides value to
customers and consumers. Another merit of the model is that it pressurizes managers to

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capitalize on firms strengths that are unique and unreachable to competitors. This promotes
understanding of dynamic capabilities in a firm as well as new venture performance in to
entrepreneurship research. Therefore, the use of resource based framework is appropriate since
the model and entrepreneurship argument is based on buying at a low price and selling at a
higher price (Benyon & Dunkerley, 2014; Hitt et al., 2012b).
Strengths and Weaknesses of Contingent Theory
The contingent framework is grounded in empirical research which makes it thrive for
many years, valid and reliable for effective leadership. Organizations benefit from this model
merit due to the research carried out on the global markets before, during and after penetration.
The theory has been validated by those who have used it to do their research since they find it
applicable and beneficial. The theory also supplies leadership styles data which organizations
find useful in leadership profiles development for human resource planning. Managers are
therefore guided on effective leadership qualities and roles which enable them enhance their
skills of leading (Donaldson, 2001).
The theory has broadened the leadership scope understanding from a single as well as
best type of leadership in order to emphasize the importance of leaders demands of different
situations and style. Organizations managers become aware that the organizations success is not
only based on how well they manage but also by maintaining and sustaining the crucial
contingencies. The theory has been proven to have predictive powers of the resources in an
organization that bring about success in their endeavors. Predictions help to make analysis on the
way forward for especially in instances where an organization desires to venture in new markets
(Parvis, 2013).

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The theory also argues that leaders should not be expected to be always equally effective
given all situations and therefore suggests that leaders should be considered in optimal situations
depending on their leadership style. This to some extent does not pressurize the management to
take responsibility in the success of the organization and can be a basis of the managers excuses.
The theory falls short where it tries to explain that some leadership styles are effective in some
situations and not in others (Donaldson, 2001). It also fails to explain the happenings when a
leader is mismatched in a workplace. This model has also been criticized on the basis of fact that
the validity of its LPC scale fails to correlate with other measurers of what might be defined as
the standard leadership. This may raise an alarm in instances where the scale findings are used to
penetrate to new global markets (Barrar & Gervais, 2006).
Globalization and Cultural Diversity
Culture competence is critical to professional viability and the future of a firm or
organization because it is omnipresent in all business interaction and every strategic decision.
Optimization of framework for culture understanding increases business productivity by 30
percent in organization. In instances where a marketing director attends a culture day and intends
to campaign for his products, he has to be involved and integrated in the culture day activities
otherwise he will be out of place. For a business to thrive in the global markets it has to
incorporate a framework of cross-culture in order to improve on interaction and cross-cultural
understanding (Hill & Jones, 2009).
Every society has specific cultural themes with a substantial impact on how the society
does business. In this specific case Coca-Cola Bottling Company United, Inc. is penetrating to
Eritrea for business and has to embrace the hosts culture and ethical expectations. The companys
core values should be deeply engrained in the Eritrea culture and way of living. If the connection

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lacks, then a loss of business opportunity results leading to high losses (Hill & Jones, 2009).
Reliable communication is also important in business because people have to interact while
doing their research as well as interacting in the market. While operating in the global market,
one of the main challenges faced in business organizations is how to navigate the language
barrier. The use of English while interacting with non-native speakers might cause some serious
derailments and misunderstandings (Morris, 2014).
Failure to understand each other in business results into a waste of time and money, and it
jeopardizes the objectives which the parties had in the first place. In case the human resources do
not understand some of the important issues being articulated, they can end up making ruinous
mistakes. Comprehension of group dynamics in a specific target culture has significant impacts
in the process of sales (Wilson, 2014). The environment determines the kind of culture that exists
among the people in a given society. For instance in a developed country like United States of
America, there involves individualistic cultures, while in other countries collectivistic cultures.
Resultant to this, customers decision making mode is influenced for example, in a collectivistic
culture decisions are influenced significantly by a group (Hitt et al., 2012a).
Resource based and contingent theories agree that sustainability of important resources
and contingencies have considered in strategic penetration of new global market. Localization is
necessary in globalization since marketing, messaging, global branding and corporate values
have to be localized. In the case study the headquarters of the Coca-Cola Bottling Company
United, Inc. being in Birmingham, Alabama and several satellite offices world-over, every type
of communication, irrespective of whether it is external or internal, needs to be translated in a
culturally fluent way. If communication is presented in a way that it cannot be heard or in any

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way violates the norms, ethics and culture expectations, then the information however significant
will definitely fall on deaf ears (Parvis, 2013).
The models of strategic management would facilitate a culture inclusion and have the
firm adapt to the principle of recognition. This would create mindsets and effective ways of
thinking on how to work together and perform in the best of their potentials for the purpose of
achieving organizational objectives. Different voices in this case will be respected and heard,
these perspectives and diverse viewpoints making everyones contribution unique and
meaningful. The new global market in this case needs to feel appreciated and recognized in terms
of their diverse cultures and ethical expectations. Management and personnel in Coca-Cola
Bottling Company United, Inc. play crucial roles in as a major resource for the company to thrive
not only internally but also externally (Elmore, 2016).
Conclusion
Contingency theory is based upon the argument that much of the success that is attained
by the organization is primarily determined by its own actions. As a result, it is upon the strategic
managers to make decisions which have a positive impact on both the short- and long-term
operations of the firms. Firms look upon these professionals as they are experienced in
performing the balancing acts, and they can really tell what might work as per the prevailing
circumstances, and what may not (Morris, 2014). The contingency theory holds that the status of
the environment is the determining factor: the management has to be keen and identify those
specific issues which would make their organization win and retain a competitive edge.
According to William Richard Scott, contingent theory is based on the notion that the most
effective organizational strategy is the one that fits and adapts to the conditions of the
environment (Barrar & Gervais, 2006; Ghofar & Islam, 2014).

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Resource dependence theory is based upon three key issues. The first one is that the firm
has to determine the value of the resources in question. This is on the basis of its own
sustainability. A valuable resource is one that gives the organization in question a significant
competitive advantage. It is an aspect that can even compel the management to go an extra mile
in seeking resources, or even hiring experts to help it strategize on what matters most at that
particular moment. Secondly, it is important to appreciate that most critical resources are scarce;
and this is because many organization tend to need them. Therefore, there is a lot of competition
for them (Elmore, 2016).
Finally, firms have to realize there is also another form of competition: there are other
stakeholders in an economy who compete with the aim of seeking to control the resources. These
act as middlemen, and are not really concerned about turning the raw materials into their finished
products. All these issues have to be balanced in a careful manner for effective performance, as
well as for the purpose of ensuring the sustainability of operations. In case a firm has inadequate
expertise in addressing these issues, it might be of essence to contract help from outside its labor
force (Barrar & Gervais, 2006).

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