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ACCA Strategic Professional · Strategic Business Leader · Concepts of strategy

Kestrel Software operates in a market where product technology changes every few months and competitor moves are unpredictable. Its board is debating whether to keep a rigid five-year rational plan. Which argument most strongly supports moving towards an incremental approach in these conditions?

The strongest argument is that in fast-changing, unpredictable markets detailed long-range plans quickly become obsolete, so adaptable, learning-based incremental strategy making is more valuable than comprehensive up-front analysis and rigid commitments to a fixed five-year plan.

  1. ADetailed long-range plans quickly become obsolete, so flexibility and learning are more valuable than comprehensive prior analysisCorrect
  2. BIncremental approaches ensure all stakeholders agree on a single mission
  3. CRational models cannot include environmental analysis
  4. DIncremental approaches remove the need for any strategic direction

Explanation

In turbulent environments, forecasting is unreliable and a fixed plan may be outdated before implementation, favouring adaptive, learning-based strategy. The other options are false: rational models do include environmental analysis, and incrementalism still keeps a broad direction.

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