Rethinking Strategy Essay Example | Topics and Well Written Essays - 1250 words

Rethinking Strategy - Essay ExampleTo achieve competitive advantage, a business enterprise outfit should achieve superior performance on the strategical factors relevant to stakeholders. For the Harvard professor and one of the famous thinkers business models, a competitive strategy takes offensive or defensive action to create a defendable position in the effort (Competitive Advantage, 2007).The basis for a business beyond par performance in an industry, according to Porter, is that a business has competitive advantage. at that place are three approaches to attain this status. The first is by attaining embody leadership. This means that a firm aspiring for this must become the firm that has the lowest cost of yieldion in its industry. It is actually the ability of a firm to design, produce, and market a comparable product more efficiently than its competitors (Kenney, 2003, p.44). In a consequence where a companys prices are similar or near that of his competitors, the compan y that has superior returns has cost leadership.The second is by differentiation. The firm seeks to be unique in the industry where it belongs, among some that are widely valued by buyers. One huge factor that a makes customers value a companys product is by having special product features and service.The third is through focus. ... The first and more traditional is the outside-in approach. According to this mode of thinking, the companys strategy heavily depends on external (market) constraints such as customers, entry barriers of suppliers, curse of substitutes, etc. The most vital means to success is the strategic fit the jibing between the companys strategy and its environment (Paawe and Boselie 2004, Kenny 2003, p.44). One of the most usual versions of this thought is Michael Porters popular outside-in Five Forces model. Existing competitive rivalry between suppliers, threat of new market entrants, bargaining power of buyers, power of suppliers, and threat of substitute produ cts makes up Porters quint forces (Chapman. 2005). These are all external, environmental forces. For Paauwe and Boselie, the companys primary course of action in the companys outside-in strategy therefore is to adopt contingency measures. The company puts premium to its reaction to the environmental forces (outside) that affects its operation and performance (in). On the other hand, the inside-out approach thinking more espoused by strategic managers than the traditional outside-in one in the late 1990s. This regularity is more concerned on the internal resources of a company rather than how it will strengthen itself from external problems. Core competence of Hamel and Prahalad is an example of a business model that applies the inside out thinking. Under this model, corporations should find a core of shared competencies. A core competency is an area of specialized expertise that is the allow for of harmonizing complex streams of technology and work activity. To identify a core co mpetence,