What is Strategy? Bus 290 Strategic Thinking

What is Strategy? Viewpoints Michael PorterMichael Porter –Strategy as product positioning/pricing: cost leadership & focused differentiation –Strategy as industry structure & firm positioning 5 Forces5 Forces Country CompetitivenessCountry Competitiveness Gary HamelGary Hamel –Strategy as Revolution or Radical Organizational Processes –Strategy as Core Competencies (w/ C.K. Prahalad)

What is Strategy? Viewpoints Richard RumeltRichard Rumelt –Uncertain imitability Uncertainty regarding resource bundle to be imitatedUncertainty regarding resource bundle to be imitated Limits firm entry & performance in industryLimits firm entry & performance in industry –Firm Differences more important than Industry Differences (in explaining above average returns) Firms are all different in some waysFirms are all different in some ways Firms cannot figure out exactly what other firms doFirms cannot figure out exactly what other firms do –Firms and Markets Do Different Things Well –Firm distinctiveness stems from resources that Create something of value to customersCreate something of value to customers Not off-the-shelf or hard to imitateNot off-the-shelf or hard to imitate –Tacit knowledge, hard to transfer skills, a complex social system

Strategy Viewpoints Julian Gresser/Mark FruinJulian Gresser/Mark Fruin –Using Everything w/ Everything –Firm as engine of Managerial Discretion To lower transaction costsTo lower transaction costs To create value from resource bundlesTo create value from resource bundles To manage firm as Networked Knowledge SystemTo manage firm as Networked Knowledge System