Business strategies have changed by necessity, the competitive advantage where organizations seek opportunities and adapt to changes in market conditions and embrace change through innovation and embed learning in the organization. Strategy refers to a long-term action plan for achieving the stated aims of an organization.
Just when you think you have settled on the right strategy, you may need to change. Whatever the immediate circumstances, managers are forever asking the same questions: Where do we go from here, and which strategy will get us there?
Should we fortify our strategic position, move into nearby markets or branch out into radically new territory? To help guide our decisions, most of us have a smorgasbord of strategic frameworks to draw on.
But which one is the right one, and when? The strategic plans, market analyses and hefty binders that strategy consulting firms leave behind often jumble strategic lenses: Five-Forces analysis, portfolio review, assessment of core competencies; examination of profit pools, competitive landscape and so on.
But which analyses are most helpful right now? Most managers recognize that not all strategies work equally well in every setting. So to understand how to choose the right strategy at the right time, we analyzed the logic of the leading strategic frameworks used in business and engineering schools around the world.
Then we matched those frameworks with the key strategic choices faced by dozens of industry leaders at different times, during periods of stability as well as change. Image courtesy of Pixar Animation Studios First, we discovered that the logics of the different strategic frameworks break into three archetypes: Sometimes it makes good sense to bypass the largest markets and focus instead on where resources fit best.
In other circumstances, it may be preferable to ignore existing resources and attack an emergent market. In some situations, basic rules of thumb work better than detailed plans.
Surprisingly, these simple strategies can be harder to imitate than complex ones. The leaders included both senior executives CEOs, chairmen, executive vice presidents and business-unit heads and managers who are charged with strategy implementation. We also surveyed all top management team members at 12 U.
In addition, we reviewed relevant research articles in the field of strategic management published in leading academic and practitioner journals from to From the data collected in our own research and through the review of the extant literature, we were able to zero in on three archetypal strategic frameworks used by industry exemplars at different times and under different conditions of environmental dynamism.
How to Choose the Right Strategy To figure out when it makes sense to pursue strategies of position, leverage or opportunity, the key is to look first at the immediate circumstances, current resources and the relationships among the various resources.
Specifically, assess whether your industry is stable, dynamic or somewhere in between. How do you gauge this dynamism? Begin by asking yourself: Can I map the five industry structure forces in my industry?
If you can identify buyers, suppliers, customers and substitutes by name and tick off barriers to entry, and if these five factors tend to stay largely the same, then you are probably operating within a stable industry. If the industry is too unsettled to map think mobile Internet applications or the basic rules are in flux think clean or nano technologythen you most likely inhabit a dynamic industry.
Where do my products fit in terms of product life cycle? In stable industries, standards are well-defined, product expectations are clear, product life cycles are known and often long and a limited number of competitors may slowly push the development envelope with anticipated innovations.
Standards may not yet exist, product life cycles are short, products are diverse and no clear dominant technology or product has emerged. Some industries are in between. The auto industry is historically a stable industry.
But new technologies for example, hybrid and electric-powered enginescompressed product development times, volatile oil prices and regulatory pressure have increased dynamism.
Take Stock of Your Resources Once you understand your industry circumstances, take a look at your company. Assessing your resources and the links among them is essential.
Resources lie at the heart of strategy.The resource-based view of strategy dates back 50 years to a provocative book titled The Theory of the Growth of the Firm, by Edith Penrose (Wiley, ).
This strategy school, popularized by Jay Barney in the early s, applies a bottom-up perspective that focuses on the firm rather than the industry.
Strategic Positioning Approach and Resource Based View Approach Strategic Positioning Approach and Resource Based View Approach Introduction Companies required being innovative and credible in offering products and flexible to compete with situations and to dealt with market changes.
factors or the ‘resource based view’ which stressed the role of the organisation’s strategic position should help the organisation to formulate and implement Organisations will obtain competitive advantage by using resources effectively to.
Futures 2: Positioning, Resource-based and Learning Schools Despite the partial demise of the 'positioning' view and the relative dominance of the resource based view in the early s, each school has dealt with the same thing, i.e.
competitive advantage. The resource-based view (RBV) is a managerial framework used to determine the strategic resources with the potential to deliver comparative advantage to a urbanagricultureinitiative.com resources can be exploited by the firm in order to achieve sustainable competitive advantage..
Barney's article "Firm Resources and Sustained Competitive Advantage" is widely cited as a pivotal work in the emergence of the. This is known as competitive analysis. You want to make sure shoppers have a reason to pick you over everyone else.
Although performing a competitive analysis isn’t rocket science, it does go beyond the few simple Google searches needed to identify and categorize your competitors. In this chapter.