To generate a firm’s strategic vision, managers must understand a highly complex set of interacting factors, including the industry’s history and structure, the company’s and its competition’s core capabilities, and the various strategic segments in which the firm competes. They must also take into account the unpredictable future. What if there is a technological breakthrough? What if new markets open up? The author gives a methodology for organizing all of this information, centering on a core capabilities matrix. He shows step-by-step how to envision the possible futures and your company’s place in them. When you finish, you’ll know which of your core capabilities are most important and how to leverage them for maximum advantage.
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The author thanks Raphael Amit, Selwyn Becker, and Michael Ryall for their helpful comments and Robert Randall for his valuable editorial advice and acknowledges Royal Dutch/Shell for having provided the impetus to develop several of the ideas in this paper. George Bateman and Steve Haney provided helpful comments on Apple Computer. The author also acknowledges the University of Chicago MBA students who took his strategic planning course during 1986–1987 for their insights and team projects on Apple Computer.