Strategy

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 👉 The creative element is critical. Strategy is not a predictable formula; it is shaped by context, people, and timing.




  1. Evolutionary → Market environment decides survival; strategy adapts or dies.

  • Revolutionary/Agile → Trial-and-error, experimentation, feedback-driven.


This yields four broad perspectives:

  1. Classical → Rational planning, single-minded profit focus.

  2. Evolutionary → Market environment decides survival; strategy adapts or dies.

  3. Processual → Strategy shaped by organizational politics, culture, incremental steps.

  4. Systemic → Strategy shaped by broader social/economic context (institutions, norms).

Additional approaches:

  • Sequential → Step-by-step: analyze → choose → implement → evaluate.

  • Incremental → Gradual evolution through small changes.

  • Hierarchical → Top-down, cascading decisions through levels of management.

  • Revolutionary/Agile → Trial-and-error, experimentation, feedback-driven.



👉 The creative element is critical. Strategy is not a predictable formula; it is shaped by context, people, and timing.



In the past, companies were seen as separate, competing businesses with clear borders.
 Now, in the digital age, companies are part of networks or ecosystems.

👉 Example: Apple doesn’t just sell iPhones—it connects developers, customers, and accessory makers through the App Store.

Key point: Strategy today is less about beating one rival and more about building and managing a strong ecosystem where everyone benefits.


2.7 Scenario Planning

Future environments are uncertain. Scenario planning prepares firms for multiple plausible futures rather than predicting one outcome.

Steps:

  1. Identify critical uncertainties (oil prices, regulations, tech adoption).

  2. Develop 3–4 distinct scenarios.

  3. Assess how strategies would perform under each.

  4. Create contingency plans.

Example: Oil companies regularly build scenarios for $40, $80, and $120 oil prices to plan investments.



When resources and capabilities combine in a way that is:

  • Valuable to customers,

  • Rare among competitors,

  • Difficult to imitate, and

  • Organized within the firm,

they form core competencies—the foundation of sustainable advantage.

Examples:

  • Honda → expertise in small engine design.

Google → algorithms and data-processing capabilities.



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