Chronology

THE FUNDAMENTAL DIMENSIONS OF STRATEGY

Corporate strategy is a fuzzy discipline.

Planning resource allocation or satisfying stakeholders

Stretching unique competencies or adapting to the environment

Programming sophisticated management or muddling through emerging ideas

Strategic innovation often consists of importing concepts and methods from other disciplines, sometimes as distant as physics or biology.

On a general level strategy compromises 3 objectives:

1. Creating value
2. Handling imitation
3. Shaping a perimeter

The WHY of the Strategy: VALUE

Ultimate goal of any strategy → ability to sustain value creation

The challenge consists on defining the type of value we expect and the way to intent to share it.

Depending on how executives define and measure value, strategic options fall along a broad spectrum of ethical stances.

1. Responsibility of companies is the short-term interest of shareholders

Financial results does not necessarily align managerial and shareholder interests, on the contrary it can give executives a good reason to cheat.

1. Organization mission driven: they concern on demonstrating best value for customers not considering financial results as goals in and of themselves.

This can also lead to strategic failure by threatening the long term survival of the organization.

→ Sound strategy: combination between shareholder value and customer satisfaction, profit maximization and corporate social responsibility.

→Strategy must never be focused with operation efficiency. (Cutting costs or optimizing day to day processes)

→ The uniques of a strategy resides in the value creation.

The HOW of the Strategy: IMITATION

Defining a business model and implementing an innovative value offer is worthless if competitors can quickly catch up.

Achieving and sustaining success depends on the ability to be unique.

Competitors can adopt same management techniques, implement identical software or follow similar marketing approaches.

The value of any strategic concept resides in its ability to create competitive advantage, the concept becomes relevant as soon at it is extensively adopted.

Hypercompetitive context: the better strategic idea, the shorter its life.

→Imitation also plays a key role in learning processes.

The imperfect copying generally leads to sub optimization or even to failure, imitators usually stay behind their models.

→Self-imitation also is a major cause of strategic success or failure. But when a company indefinitely repeats the same successful patters, it becomes prone to strategic drift. Because it replicates what has been successful, it limits scope of its portfolio of resources and capabilities and truncates its ability to adapt to new circumstances.

→Imitation can also shape entire industries. Competitors mimic successful strategies, great deal of similarity between businesses in many industries

It can open new business opportunities to competitors who dare to challenge any taken-granted assumptions. (low cost airlines became successful: Ryanair, EasyJet, Southwest, etc)

They adopted new perspective on their business and defined fresh strategic spaces while many other airlines were on the edge of collapsing from their conventional business models.

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