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The Methods of Business
Strategy
"Even if you do see the future correctly, its timing is hard to predict and
its implications are uncertain."
~ John Kay
According to John Kay4, methods of
business strategy require:
-
Looking inward:
strategic analysis of the characteristic
of your company to identify your
distinctive capabilities and surround them with a collection of
reproducible capabilities, or complementary assets, which enable your
company to sell its distinctive capabilities in the market it operates.
-
Looking outward:
strategic analysis of the industries and markets in which your
company operates to identify those markets in which your company's
capabilities can yield competitive advantage.
The questions are twofold:
-
What are the origins and characteristics
of the successful fit between
capabilities
and
environment?
Why do companies succeed?
-
How can companies and their managers make
that fit more effective? How
will companies succeed?
Competitive Strategies
To be successful today, your company must
become competitor-oriented. You must pursue the right
competitive strategy
– avoid strengths of your competitors and look for weak points in their
positions and then launch marketing attacks against those weak points...
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Building Your
Sustainable Competitive Advantage
Sustainable competitive advantage
is the prolonged benefit of implementing some unique value-creating
strategy based on unique combination of internal organizational
resources
and
capabilities
that cannot be replicated by competitors...
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Business Strategy
Stretching
To
Jack Welch,
the legendary former CEO of
GE, business strategy
stretching is doing the best possible – and then reaching beyond.
What Welch calls "stretch"
simply means figuring our performance targets "that are achievable,
reasonable, and within GE's capabilities. And then raising sights higher –
much higher – towards goals that seem almost beyond reach, goals requiring
superhuman effort to achieve."8 Often business leaders exceed
goals even as they fall short of the stretch. Don't punish, reward them.
What's critical is setting the performance bar high enough; otherwise, it's
impossible to find out what people can do...
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New Paradigm:
Resource-Based Theory
The currently dominant view of business
strategy –
resource-based theory – is
based on the concept of economic rent and the view of the company as a
collection of capabilities. This view of strategy has a coherence and
integrative role that places it well ahead of other mechanisms of strategic
decision making.4
The resource based view of strategy emphasizes
economic rent
creation through
distinctive
capabilities. Economic rent is what companies earn over and above the
cost of the capital employed in their business. It is the measure of
the competitive advantage, and competitive advantage is the only means by
which companies in competitive markets can earn economic rent. The objective
of a company is to increase its economic rent, rather than its profit as
such. "A company which increases its profits but not its economic rent – as
through investments or acquisitions which yield less than the cost of
capital – destroys value."4 The perspective of economic rent
forces the question 'why can't competitors do that?' into discussion.
Business Strategy in the
New Knowledge Economy...
Dynamic
Enterprise Strategy...
Strategy Innovation:
Evolution of a Successful Strategy...
Business Intelligence...
Technology-oriented
Business Strategy Formulation...
Connecting Power...
Strategic Achievement...
Competitive
Strategies..,
Competitive War Games...
Flying Beneath the Radar...
Innovation Strategies...
Competitive Disruption...
Cleaner
Production
Strategy...
Make It Fun...
Four Categories of Business
Tactics...
Strategic Project
Management (SPM)...
Case in Point
GE...
Case in Point
Silicon
Valley Firms...
Case in Point
Amazon.com...
Case in Point
Microsoft...
Case in Point
Charles
Schwab...
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