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Concept of Stretch Leverage and Fit in Strategic Management

This article will explain the Concept of Stretch, Leverage and Fit in Strategic Management. Check supportive and relevant examples provided at the end of this article to get more idea about this topic.

Before moving to the concept of strategic intent and how to achieve it, we need to understand the concept and meaning of stretch, leverage and fit.

Basics of Stretch Leverage and Fit in Strategic Management

Stretch: Definition & Meaning

Stretch is exactly opposite to the idea of fit and deals with positioning the firm by matching its organizational resources to its environment.

Simple meaning of Stretch is a misfit between resources and aspirations. In simple words we can say, this is a gap between available resources and aspirations or expectations.

Leverage: Definition & Meaning

Leverage can be defined as the process or act of concentrating, accumulating, complimenting, conserving, and recovering resources in such a manner that meagre (less or insufficient in amount) resource base is stretched to meet the aspirations that an organization dares to have.

Strategic Fit: Definition & Meaning

The strategic fit is central to the strategy school of the positioning where techniques like SWOT analysis can be used to analyze and assess the organizational capabilities and environmental opportunities.

Stretch Leverage and Fit in Strategic Management

The Concept of Stretch, Leverage and Fit in Strategic Management was added by Hamel and Prahalad to the strategic intent.

Subsequent to the idea of strategic intent, Hamel and Prahalad added the concept of ‘stretch’ and ‘leverage’.

So ultimate goal is strategic intent.

To achieve Strategic Intent, we need to Stretch.

1. Understanding stretch: Now we need to understand the gap between aspirations and available resource (i.e. stretch).

2. Leveraging: In this, instead of focusing on scarcity we should focus on optimization of resources through innovation. This is called resourcefulness.

PS: You can read the definition of leverage again to understand this clearly.

3. Strategic Fit: Here we can use techniques like SWOT analysis to assess and manage organisational capabilities and environmental opportunities.

Under fit, the strategic intent would be seen to be more realistic, under stretch and leverage it could be idealistic.

Example: Tata Steel’s Strategic Intent where we can consider Vision, Mission, Objectives etc.

This is all about the concept and meaning of Concept of Stretch, Leverage and Fit in Strategic Management. This article will help to the students and researcher of management and business studies stream.