So where do we go with this thought that some of today's tools may not suffice as the market moves faster and companies need these dynamic, flexible analytical tools to update their strategies?
Where Is the Field of Strategy?
Disruptive Innovation? Four actions framework? Factor conditions? Demand conditions? Preemptive strategies? Five Forces? Ten Schools? Are any of these concepts/theories new and innovative? Do they pave the path toward the future of corporate and competitive strategizing? The answer is probably yes...and no.
It is difficult to find a brand new strategizing tool or model or school that is not just a rehashed version of our current standard, and quite effective, methods to analyze strategies. One innovative strategy to arise out of an existing concept is "Blue Ocean."
Though not new as a theory, the strategy proposed by Kim and Mauborgne in Blue Ocean Strategy urges companies to stop swimming in the "red" ocean which is filled with competition, and expand into relatively competitor-free markets of the blue ocean.
The blue ocean, they say, is filled only with untapped market space and opportunity for highly profitable growth. (Kim & Mauborgne, 2005) but then one might ask, why haven't all those intelligent CEOs fighting tooth and nail in the red ocean with all that competition swimmimg rapidly and in large schools over to the blue ocean?
Part of the reason, according to the authors, traces back to the foundation of business strategy where competitors compete to protect and enlarge their share of the market. This was exasperated by the rise of the Japanese in the 1970s and 1980s. Customers were deserting Western companies in droves, so the center of strategic thinking gravitated further towards the competition. A slew of competition-based strategies, which are very much in play today, emerged arguing that competition is at the core of the success and failure of firms, and that competition determines the appropriateness of a firm's activities that can contribute to its performance.
The result has been a fairly good understanding of how to compete skillfully in red waters. Yet, although some discussions around...
This largely explains why CEOs remain focused on red oceans -- it's the ocean they are familiar with and feel equipped to compete in. (Kim & Mauborgne, 2005)
Strategy is not, by any means the whole story to growth and profitability. An obsession with strategy at the expense of the equally avid pursuit of operational excellence is dangerous and very likely damaging to the company's bottom line. A company strategy should have three goals: to identify the competitive universe in which the company operates and locate it's competitive position, to recognize and manage competitive interaction with other firms, and, finally, to develop a clear, simple, and accurate vision of where the company should be headed. (Greenwald & Kahn, 2005)
Bibliography
Corporate Level Strategy. (2003, January). Retrieved 11-07, 2008, from BNet Business
Network: http://jobfunctions.bnet.com/abstract.aspx
Day, G., & Reibstein, D. (1997). Wharton on dynamic competitive strategy. Hoboken,
N.J.: John Wiley & Sons, Inc.
Greenwald, B., & Kahn, J. (2005). Competition demystified. New York: Portfolio, a member of Penguin Group (USA) Inc.
Kim, W.C., & Mauborgne, R. (2005). Blue ocean strategy. Boston, MA: Harvard
Business School Press.
Mintzberg, H., Lampel, J., & Ahlstrand, B. (2005). Strategy safari. New York: Free
Press.
Nickols, F. (2004, October 06). Three Forms of Strategy. Retrieved November 08, 2008, from Distance Consulting: http://home.att.net/~nickols/strategy_forms.htm
Porter, M. (1998). Competitive strategy. Free Press.
Porter, M. (2008, October 28). How Competitive Forces Shape Strategy. Boston,
MA, USA. Retrieved from 12 Manage.
Prahalad, C., & Hamel, G. (2008, October). The Core Competence of the Corporation.
Boston, MA, USA.
Russell-Jones, N. (2005). The strategy pocketbook. Winchester, UK: Management
PocketBooks.
Welch, J. (2001). Straight from the gut. New York: Warner Books Inc.
