Just when you think you have settled on the right strategy, you may need to change. By understanding the particular circumstances and forces shaping your company’s competitive environment, you can choose the most appropriate strategic framework.
Markets are changing, competition is shifting and your business may be suffering or perhaps thriving, at least for now. 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. (See “About the Research") Two surprising insights emerged.
Pixar Animation Studios, whose worldwide megahits include the Toy Story movies and Finding Nemo, uses rules such as “great story first, then animation” to guide its strategy.
Image courtesy of Pixar Animation Studios
First, we discovered that the logics of the different strategic frameworks break into three archetypes: strategies of position, strategies of leverage and strategies of opportunity. What’s right for a company depends on its circumstances, its available resources and how management combines those resources together. (See “Choosing the Right Strategy.”)
Second, by observing market leaders employing archetypal strategies, we found that many assumptions about competitive advantage simply don’t hold. For example, although strategy gurus talk about strategically valuable resources, sometimes very ordinary resources assembled well are all that’s required for competitive advantage. 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.
5 Comments On: Which Strategy When?
That’s a great and interesting article. It raised the awareness of strategy framework complied with implementation. One interest point I have is that in case the failure or breakdown of one resource happens, will other resources be easily vulnerable as a disadvantage of interlocking resources or will the breakdown be quickly repaired/replaced as an advantage of interlocking resources?
I’ve often had to change strategies midstream, and it does get to be a bit bewildering, leaving you with thoughts of uncertainty, however a strong belief and confidence in the change usually helps towards a positive result!
Michelle
http://excellentprinting.co.uk/
It seems that changing strategies is something common to all business managers in today’s business climate. With technology rapidly advancing business, being flexible and willing to adjust are necessities. We are in the luxury real estate business and need to change our way of doing business constantly to keep up.
Jimbo Holloway
http://www.realestate30aflorida.com/
I find this article re-inforcing the old resource view vs positioning view of strategy, whilst in reality it is neither resource view or positioning view,It is all of them. A book by Roger Martin and A.G Lafley, Playing to win would assist the authors in removing their blinkers.They define strategy as an intergrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition. A strategy according to these authors then is a co-ordinated and intergrated set of cascading five choices: a winning aspiration, Where to play, How to win (Positioning view). Core capabilities and management systems (Resource View). In reality positioning, Opportunity and Resource view are mutually re-inforcing.
I find the articles from MIT Sloan Management Review can develop my mind about new development in strategic management field. New ideas are developed by experts in this field to add my horizons as a lecturer and also in the subject of strategic management. As an observer in this field article published in this magazine is very useful for me in writing and teaching. The article wrote by Christopher Bingham and Phillip Hettleman is unique and very useful.