JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY

CAMPUS: NAKURU CBD CAMPUS

SCHOOL: SCHOOL OF BUSINESS
DEPARTMENT: COMMERCE
PROGRAM: DOCTOR OF PHILOSOPHY IN BUSINESS ADMINISTRATION
COURSE: STRATEGIC MANAGEMENT
COURSE CODE: DBAS 4113
NAMES: MATATA MUTHOKA
REG. NO. HD433-C007-2012/2016

TASK : ASSIGNMENT
1. The Role of Culture in Strategy Execution
2. Change Management Discussion
3. Tailoring Strategy to Fit Specific Industry and Company Situations

LECTURER: DR. MICHAEL MUNDIA

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 Table of Contents
THE ROLE OF CULTURE IN STRATEGY EXECUTION.......................................................................3
CHANGE MANAGEMENT DISCUSSION.............................................................................................11
TAILORING STRATEGY TO FIT SPECIFIC INDUSTRY AND COMPANY SITUATIONS................21

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THE ROLE OF CULTURE IN STRATEGY EXECUTION

Introduction
Organizational culture is a concept created and resides in the minds of the organization members
and governs what is worth for them and how they should think, feel and behave (Ravirala 2015).
It is what defines each business; impacting the quality & consistency of employee performance.
Organizational culture includes the shared beliefs, norms and values within an organization. It
sets the foundation for strategy. For a strategy within an organization to develop and be
implemented successfully, it must fully align with the organizational culture. Thus, initiatives
and goals must be established within an organization to support and establish an organizational
culture that embraces the organization’s strategy over time. As Peter Druker puts it Culture if not
well handled eats the organizations strategy for breakfast.

Developing a strategic plan is vital to an organization’s success. An organization must be able to

efficiently execute that strategy to achieve its performance improvement goals. The
organization’s culture is often the most important determiner in successful execution.

At the core, implementing strategy depends on two essential elements: Building and sustaining
an organizational culture that facilitates and accelerates change and Fostering a sense of personal
accountability for strategy execution ownership at every agency level. In other words,
constructing a culture that creates the flexibility and understands and accepts the responsibilities
for change is key.

Creating an organizational culture that is open to change starts with a senior leadership team that
communicates an agency’s strategic priorities often and effectively. Culture is the fabric through
which the strategy gains life or dies.

Organizational culture should evolve with the strategy scenarios in the world and the society at
large. It needs to be contemporary without losing the essence of values that the organization
stands for.

The Culture Web

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The Cultural Web is a representation of taken-for-granted assumptions of an organization. It
helps management to focus on the key factors of culture and their impact on strategic issues and
can identify blockages to and facilitators of change in order to improve performance and
competitive advantage. It was proposed by Johnson & Scholes (2002). It comprises the following
items:
Illustration: The Cultural Web

1. Stories and myths: This part of the web covers events and people discussed inside and
outside the organisation. Martin (2002) states that stories are understood by a large
number of employees in the organisation, hence managers should focus on a single event,
are allegedly true and the central characters in the story are employees of the organisation
who drive the implementation of the strategy.

2. Rituals and routines: this aspect covers the patterns of systematic behaviour that are
seen as normal. Usually this determines what’s supposed to happen in a particular

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 situation. The rituals of organisational life are particular activities or special events that
emphasize, highlight or reinforce what is important in the culture (Johnson et al., 2011).

These rituals can be positive like supporting colleagues, responding to customer queries
in 24 hrs. But they can be negative like bullying, sexism, etc. the management should
ensure that the rituals and routines are supportive of the strategy being executed.

3. Symbols – Symbols are everything that can be seen, heard, or touched in an

organizational context (Janićijević, 2011). Examples of symbols include logos, offices,
the type of language and terminology used (Johnson & Scholes, 2002). Although listed as
a separate element many other elements on the web may be symbolic in their own right
(Johnson, 2011)

4. Organisational structure: The organogram is one formal representation of structure

indicating who reports to whom. The organizational structure refers to the roles,
responsibilities and reporting relationships in organizations (Johnson et al., 2011). Kemp
and Dwyer (2001), when describing organizational structure, refer to the degree of
centralization, formalization, complexity, configuration and flexibility of the
organization. The structure adopted should shoulder the strategy throughout the execution
period. It should allow for constant communication and feedback about the execution.

5. Control systems: The control systems refer to the formal and informal ways of
monitoring and supporting people within and around an organisation and tend to
emphasize what is seen to be important in the organisation (Johnson et al.(2011). What
gets rewarded and how rewards are administrated are also included in control systems
(Johnson & Scholes, 2002). The control system should be enabled to support those
implementing the strategy so as to encourage others to participate.

6. Power structures: Power Structures are distributions of power to groups of people in an

organisation (Johnson et al., 2013,). Johnson et al., (2011), report that the most powerful
members within an organisation are likely to be closely associated with the paradigm.
Employee empowerment is also considered under power structures (Kemp & Dwyer,
(2001). Therefore power distribution in the organization should favor the strategy and

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 employees should also be empowered to implement the strategy at hand at a particular
time.

The different components of organizational culture need to be reworked, re-organized to suit the
strategy chosen. Each component needs to enshrine in it the strategy execution enthusiasm.

HOW TO USE CULTURE TO BETTER STRATEGY EXECUTION

The managers of a firm need to espouse an organizational culture that integrates the following
ways so as allow for precision in strategy execution.
Flexibility and Adaptability
Organizations that remain flexible are more likely to embrace change and create an environment
that remains open to production and communication. This provides a model that welcomes
cultural diversity and helps clarify strategy implementation. Culture within an organization can
serve many purposes, including unifying members within an organization and help create a set of
common norms or rules within an organization that employees follow.
Characteristics of Stability
A stable culture, one that will systematically support strategy implementation, is one that fosters
a culture of partnership, unity, teamwork and cooperation among employees. This type of
corporate culture will enhance commitment among employees and focus on productivity within
the organization rather than resistance to rules and regulations or external factors that prohibit
success.
Goal Unification
Flexible, strong and unified cultures will approach strategy implementation and affect
implementation in a positive manner by aligning goals. Goals can come into alignment when the
organizational culture works to focus on productivity and getting the organization’s primary
mission accomplished. This may include getting products delivered to customers on time,
shipping out more products than the organization’s chief competitor or similar goals. This will
create a domino effect in the organization that ensures that all work performed by each individual
in the company and work group focuses on performance and on the strategic importance of the
company.
This allows culture to align with strategy implementation at the most basic level. For this level of
unification to work, goal setting must align with and be supported by systems, policies,

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procedures and processes within the organization, thereby helping to achieve strategy
implementation and continuing the cultural integrity of the organization.

Process Implementation
Part of cultural alignment and strategy implementation involves process implementation.
Processes include utilizing technology to facilitate goal attainment and the results a company is
looking for when working with customers to meet their needs. While most of the time the hard
problems and needs of an organization get met, the culture becomes neglected in the process.
That is where processes come into place and strategy implementation gradually comes into
existence to uphold and maintain organizational culture and strategies.
Cultural Alignment
When culture aligns with strategy implementation, an organization is able to more efficiently
operate in the global marketplace. Culture allows organizational leaders to work both
individually and as teams to develop strategic initiatives within the organization. These may
include building new partnerships and re-establishing old ones to continue delivering the best
possible products and services to a global market
A culture of Appreciation
The employees that are adding value to the organization, they should be appreciated both
privately and publicly. This could be their positive attitude, the effort put into a project,
creativity, among other positive attributes. When employees know that they are appreciated their
input, they will perform even better. People like being appreciated and this is even more valuable
to them than money. It should be done with sincerity and your organization will greatly benefit.

A culture of Offering Clarity

When management involves employees in the mission and vision of the company and clearly
explaining to them what the culture of the organization expects, they will do better than if they
are left to their own devices. Employees need to give employees a bigger purpose behind what
they are working on and the interest will grow resulting in a stellar performance. An employee
will not feel like they matter if no one has spared some time to explain things to them. Each

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person even the lowest in the hierarchy should be made to feel important to the attainment of the
company objectives.

Show Interest to implementers

Other than the presence of the employee at work, they bring their history, personal stories, and
personal life to work. Management need to take notice of their life and create a connection so
that you can better understand where they are coming from, where they are, and where they want
to go. This will make them work better knowing that they matter.

Openly communicate the strategy

Most employees value a company that takes open communication seriously. People prefer being
engaged in an organization. They wish to continue contributing ideas and feel they are being
heard. It helps to create a sense of belongingness and ownership in strategy execution.
Culture of Recognition
This gives the employees recognition for their accomplishments in their personal lives as well as
in the business matter to the accomplishment of the organizational strategy. Recognitions show
the employees that you care and are paying attention to what they do. Involving the organization
in personal events like weddings, birthdays, and the birth of new babies make them feel like a
part of the community.
Team-Building Culture
Celebrations at the workplace bring employees together from different departments, cultivating
better relationships and a sense of unity. It gives the team a chance to bond in a relaxed
atmosphere where they can get to know each other better informally.
Morale Boosting Culture
Recognizing staff during celebrations is a sure way of boosting staff morale even for those who
have not received any recognition. It provides an enjoyable time to be off work and just rejoice.
This results in better productivity at work. This could be done to those driving strategy execution
better.
Traditions
The leaders of the organization should take strategy related celebrations and organizational
traditions seriously due to:

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  Traditions make the organization stand out from the crowd. They help your company
build a unique culture.

 It fosters the sense of shared identity among co-workers.

 It is a way to remind each other of past challenges and how far the organization has
come.

Each person in the agency contributes to its success. Everyone should feel personally
accountable. Senior leaders can focus their teams with a simple, yet important, framework to
make strategy happen and achieve results:

1. Make strategy clear: Make strategic vision and goals clear and inspirational
2. Make strategy real: Translate strategy into a living execution plan that matters to people;
don’t let it sit on a shelf
3. Make strategy happen: Capitalize on existing beneficial behaviors, and take action to
adjust undesired or obsolete behaviors as needed
4. Make efforts from strategic planning last: Change organizational processes to reinforce
desired behaviors for the long term and enable alignment with an organization’s culture

Conclusion
The organizational culture when not fully aligned with the strategy can feed on the strategy
rather than feeding it. Culture should aid strategy execution. The most effective organizations
understand that simply writing a strategic plan does not guarantee success, it is just a vision.
Meaningful progress only occurs through creating and reinforcing a culture of change, top-down
employee buy-in, strategy ownership, implementation, and accountability.

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References
Janićijević, N. (2011). Methodological approaches in the research of organizational culture.
Economic Annals, 56(189)69-99
Johnson G, Scholes K, & Whittington R. (2011). Exploring strategy: Text and cases (9th edn.).
Financial Times/Prentice Hall, London.
Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnér, P. (2013). Exploring strategy
text & cases (10th ed.). Harlow, UK: Financial Times/Prentice Hall
Kemp, S., & Dwyer, L. (2001). An examination of organizational culture—The Regent Hotel,
Sydney. International Journal of Hospitality Management, 20, 77-93.
Martin, J. (2002). Organizational culture: mapping the terrain. London: Sage
Ravirala B. (2015). Key Components of Organization Culture.
https://www.linkedin.com/pulse/five-key-components-organization-culture-ravirala-bala-
ravirala-/

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CHANGE MANAGEMENT DISCUSSION
Introduction
Strategic change means a restructuring of an organization's business or marketing plan that is
typically performed in order to achieve an important objective. For example, a strategic change
might include shifts in a corporation's policies, target market, mission or organizational structure.
Whether limited and of marginal nature requiring the reorganization of a single department, or of
a strategic nature affecting the company as a whole and changing its strategy, its culture, its
employees and resources, organizational changes cannot be spontaneous, they are rather
triggered by problems and occasions, and then led by leaders. In a context of uncertainty and
instability marked by the globalization of markets and technological progress, the current
business has to continually adapt and opt, where appropriate, for more pronounced and
significant changes. Such changes are generally called strategic changes (Hafsi & Fabi 1997)

According to Dessler (2004), organizational change often starts with strategic change, that is to
say change in strategy, mission and vision of the organization. Strategic change can then lead to
other organizational changes relating to technology, structure and culture of the company. When
the management of change is described, a leading role is often given to the personal influence of
managers which is itself directly related, according to some authors (Johnson, Scholes, &
Whittington, 2005).
The change process
There are many theories which have been put forward explaining the process of change.
However this essay will present the Kotter (1995) eight stage process of change.
Step 1: Create Urgency

Develop a sense of urgency around the need for change. This may help you spark the initial
motivation to get things moving. It involves opening an honest and convincing dialogue about
what's happening in the marketplace and with the competition. If many people start talking about
the change you propose, the urgency can build and feed on itself.

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Step 2: Form a Powerful Coalition
Convince people that change is necessary. This often takes strong leadership and visible support
from key people within your organization. Managing change isn't enough the leader has to lead
it. To lead change, one needs to bring together a coalition, or team, of influential people whose
power comes from a variety of sources, including job title, status, expertise, and political
importance. Once formed, the change coalition needs to work as a team, continuing to build
urgency and momentum around the need for change.

Step 3: Create a Vision for Change

When the leader first start thinking about change there will, probably be many great ideas and
solutions floating around. Link these concepts to an overall vision that people can grasp easily
and remember. A clear vision can help everyone understand why leaders are asking them to do
something. When people see for themselves what they are trying to achieve, then the directives
they're given tend to make more sense.

Step 4: Communicate the Vision

The leader’s message will probably have strong competition from other day-to-day
communications within the company, so he needs to communicate it frequently and powerfully,
and embed it within everything that you do. When the leader keeps it fresh on everyone's minds,
they'll remember it and respond to it.

Step 5: Remove Obstacles

Put in place the structure for change, and continually check for barriers to it. Removing obstacles
can empower the people needed to execute the vision, and it can help the change move forward.

Step 6: Create Short-Term Wins

It’s vital to create short-term targets not just one long-term goal. The leader would want each
smaller target to be achievable, with little room for failure. The change team may have to work
very hard to come up with these targets, but each "win" that is produced can further motivate the
entire staff.

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Step 7: Build on the Change
Kotter (1995) argues that many change projects fail because victory is declared too early. Real
change runs deep. Quick wins are only the beginning of what needs to be done to achieve long-
term change. Each success provides an opportunity to build on what went right and identify what
you can improve.

Step 8: Anchor the Changes in Corporate Culture

To make any change stick, it should become part of the core of the organization. The corporate
culture often determines what gets done, so the values behind the vision must show in day-to-day
work. Continuous efforts should be taken to ensure that the change is seen in every aspect of
your organization. This will help give that change a solid place in your organization's culture.

In approaching an organizational change situation, managers explicitly or implicitly make

strategic choices regarding the speed of the effort, the amount of preplanning, the involvement of
others, and the relative emphasis they will give to different approaches. Successful change efforts
seem to be those where these choices both are internally consistent and fit some key situational
variables (Kotter & Leonard 2008).
Criteria for Selecting an Change Strategy
The criterion for selecting a certain intervention assumes stakeholder involvement, ideally in
both planning and implementing an intervention. Choice of intervention is informed by the
diagnosis which precedes it. The steps involved in the diagnosis are:

1. Conduct an organization-based assessment and planning process to be sure that

you're addressing the issues that are most appropriate and pressing for the
organization.
- If the intervention is to work, it has to be aimed at the real issues the organization
needs to address. An assets and needs assessment and planning process will help
you not only to identify those issues accurately, but also to think about how to
approach them most effectively.

2. Decide whether you'll address the issue directly, or whether you'll try to change the
conditions that make it possible.

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 - It may be that working on their causes will be more successful than coming at the
issues themselves directly; and that could mean a totally different kind of
intervention.

3. Find (or create, if that's necessary) practices or interventions that have successfully
addressed the issue in the way you want to address it.

- It's important to realize that not every successful intervention is successful in the
way that you're interested in. If the focus is organization empowerment, for
instance, a top-down authoritarian intervention, no matter how successful, isn't
what you're looking for.

4. Determine what elements of a promising intervention will work in the organization

and which ones need to be changed.

- In other words, change the intervention, or parts of it, so that it suits the
organization's needs. Not all the pieces of an intervention will work in another
organization and everyday life all may be totally different.
- The organization and the target workers need to make an adopted practice or
intervention their own, and make it work for them.
- If it's true that no two organizations are exactly alike, it should be equally true that
interventions that work for them won't be exactly alike, either, though they may
have many common elements.
5. Implement the intervention, making adjustments as you go along.
- It's probably helpful to start out with the expectation that you'll have to make
changes as you learn more about the fit between the practices you've adopted or
created and the target population.
- That attitude will make it easier to make those changes, and thus to become more
and more effective as time goes on.

6. Evaluate the work and results regularly, understanding that no matter how well any
intervention works, it can always be improved.

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 - It's important to examine the work and outcomes continually, whether formally or
informally, so that you'll have more than intuition to tell whether you're achieving
the goals or not.
- It's perhaps even more important to keep the idea of a dynamic intervention
always before you, so that no matter how well you're doing, you'll still be willing
to try something new if it looks promising.
According to Dunphy (1981) the following 14 points characterize a successful change
intervention criterion. These include:

1. Clear Objectives – The change intervention should have understandable goals to be

achieved

2. Realistic and Limited Scope – The intervention should have manageable scope in terms
of depth, time and reach clearly indicated.

3. Informed Awareness to Build Commitment- It should be the goal of the change

interventionists to create awareness around the intervention.

4. Selection of appropriate systems – The parts of the organization being selected for
change should be the ones that are most affected and likely to sustain change.

5. Good timing – Time is key in bringing interventions on board

6. Participation – Does the intervention include stakeholder participation? It should

7. Support from key power groups – Is the intervention supported by the major players in
the organization? Like the board of management or the workers union.

8. Using the existing power structure – How does the proposed intervention deal with the
existing power structure

9. Realistic assessment of proposed changes – How is the intervention going to be

assessed?

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 10. Majority support – Is the intervention likely to garner major support from workers, and
other stakeholders?

11. Competent staff to support changes – Do we have capable staff to implement the
change?

12. Integration of new methods into everyday processes – How does the proposed
intervention fit into the current processes?

13. Transfer and diffusion of successful innovations to help change occur elsewhere in the
organization

14. Contingency modification- Does the change intervention allow for modification while
being implemented?
Resistance to Change
Resistance to change can manifest itself in a number of ways like: persistent reduction in output,
increase in the number of people leaving or requesting for transfer, chronic quarrels, glowering
hostility, wildcat and slowdown strikes.

According to Rick (2011) change is normally resisted due to the following reasons.

1. Misunderstanding about the need for change/when the reason for the change is
unclear — If staff do not understand the need for change you can expect resistance.
Especially from those who strongly believe the current way of doing things works well…
and has done for twenty years!

2. Fear of the unknown — One of the most common reasons for resistance is fear of the
unknown. People will only take active steps toward the unknown if they genuinely
believe – and perhaps more importantly, feel – that the risks of standing still are greater
than those of moving forward in a new direction

3. Lack of competence — This is a fear people will seldom admit. But sometimes, change
in organizations necessitates changes in skills, and some people will feel that they won’t
be able to make the transition very well

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4. Connected to the old way — If you ask people in an organization to do things in a new
way, as rational as that new way may seem to you, you will be setting yourself up against
all that hard wiring, all those emotional connections to those who taught your audience
the old way – and that’s not trivial

5. Low trust — When people don’t believe that they, or the company, can competently
manage the change there is likely to be resistance

6. Temporary fad — When people belief that the change initiative is a temporary fad

7. Not being consulted — If people are allowed to be part of the change there is less
resistance. People like to know what’s going on, especially if their jobs may be affected.
Informed employees tend to have higher levels of job satisfaction than uninformed
employees

8. Poor communication — It’s self-evident isn’t it? When it comes to change management
there’s no such thing as too much communication

9. Changes to routines — When we talk about comfort zones we’re really referring to
routines. We love them. They make us secure. So there’s bound to be resistance whenever
change requires us to do things differently

10. Exhaustion/Saturation — Don’t mistake compliance for acceptance. People who are
overwhelmed by continuous change resign themselves to it and go along with the flow.
You have them in body, but you do not have their hearts. Motivation is low

11. Change in the status quo — Resistance can also stem from perceptions of the change
that people hold. For example, people who feel they’ll be worse off at the end of the
change are unlikely to give it their full support. Similarly, if people believe the change
favours another group/department/person there may be (unspoken) anger and resentment

12. Benefits and rewards — When the benefits and rewards for making the change are not
seen as adequate for the trouble involved

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Expecting resistance to change and planning for it from the start of your change management
programme will allow you to effectively manage objections.
How to overcome resistance to change
Change is an inevitable part of business. But when communication styles vary, generational
stereotypes create collaborative barriers. Trying to bring everyone together to accomplish one
goal can often feel like trying to mix oil with water. But these challenges cannot prevent
businesses from adapting. After all, change is the only way to survive in the quickly evolving
marketplace. Therefore, leaders must find a way to bring their employees together and overcome
employee resistance to change.

To overcome resistance to change, Kotter & Sclesinger (2008) recommend to leaders and
managers the use of one of the following management practices:
1. Information and communication: when lack of information or blurred trainings are on the
base of the resistance,
2. Participation and commitment: if the initiators do not have all the information needed to
design the change and if the others have a great power of resistance,
3. Facilitation and support: if the resistance is a manifestation of fear and anxiety,
4. Negotiation and agreement: if a person or a group would obviously undergo a loss after
the change and if this group has a great power of resistance,
5. Manipulation and cooptation: when other tactics are ineffective or too expensive,
6. Coercion: if the rapidity of action is essential and if the initiators of change have
considerable power.
Other ways to overcome resistance
On his part (Dukes 2016) suggests that resistance to change can be minimized by the following:
1. Expect Resistance
It’s unrealistic to assume every change you implement will be unanimously welcomed, accepted
and supported by all staff members. Have a plan in place to address pushback, including positive
reinforcement and consequences that are clearly communicated and understood by all staff
members.
3. Encourage team work

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Teams work better when they understand one another on a somewhat personal level. To cultivate
a strong company culture and foster deeper connections between employees, create opportunities
for your staff to socialize that doesn’t involve work. Happy hours, company-sponsored events
and group outings and clubs are excellent ways to bring people together, regardless of age or
professional title.
4. Identify the Root Cause of Resistance
There are many telltale signs that staff members are resisting change. By identifying why
employees are resisting change, managers can better decide how to address resistance head-on. If
lack of awareness or fear is the problem, greater communication and discussion groups may help.
If change has failed in the past, and employees aren’t confident this time will be different, you
can discuss specific ways the organization has learned from its mistakes and how it plans to use
this insight to successfully implement new initiatives.
5. Involve Executive Leadership
You cannot successfully implement change without support from all levels of business. Your
employees take cues from the executive team, and if leadership doesn’t adhere to the plan for
change management, it’s very likely your employees won’t either. Encourage company leaders to
set an example, and the rest will follow.
6. Communicate Effectively
By clearly and concisely explaining why the change is taking place, how it will impact each
employee’s job and exactly what is expected of each employee before, during and after rollout—
nothing is left to question.
But simply stating the obvious isn’t enough. Leaders need to make a conscious effort to speak to
individuals in the way they prefer. To this end, make certain communication technologies are in
place for those who wish to utilize them. It’s also important not to discount how quickly older
generations have adapted to technology. Sometimes, all they need is a little training to feel more
comfortable using new tools.
8. Leverage the Right Technology
The most successful work environments are those that are proactive, responsive and intuitive.
With proper customization, implementation, training and support, technology can actually help
bridge gaps between employees and departments.

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Conclusion
This essay has looked at the meaning of change, the process of change, the process of selecting
change intervention, the aspect resistance to change, and ways of overcoming resistance. Change
is real to a business as it is real in real world. Strategic management is part of the conscious
effort to bring better change to an organization.

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References
Dessler, G. (2004), A Framework for Human Resource Management, (3rd Edition), Pearson,
Prentice Hall.
Dunphy E. & Dexter N. (1981). Organizational Change by Choice. McGraw-Hill, Sydney

Hafsi, Taïeb and Bruno Fabi (1997), Les fondements du changement stratégique , Montreal :
Editions Transcontinental Inc.
Johnson, G., Scholes, K. & Whittington, R. (2005). Exploring Corporate Strategy (7th ed.).
Harlow: Pearson Education Limited
Kotter J. P. & Leonard S. A. (2008). Choosing Strategies for Change. Harvard business review.
57. 106-14. 10.1007/978-1-349-20317-8_21.
Kotter, J. (1995). Leading Change: Why transformation efforts fail. Harvard Business Review,
March-April 1995, pp. 59-67.
Kotter, J. P. & Schlesinger, L. A. (2008). Choosing Strategies for Change, Harvard Business
Review, 86 (7–8)

Rick T. (2011) Reasons for Resisting change. https://www.torbenrick.eu/blog/change-

management/12-reasons-why-people-resist-change/

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 TAILORING STRATEGY TO FIT SPECIFIC INDUSTRY AND COMPANY
SITUATIONS

Introductions

This best strategy for a given firm is ultimately a unique construction reflecting it's particular
internal circumstances and the industry environment. This essay looks at the strategy-making
task in nine commonly encountered situations including: companies competing in emerging
industries, companies competing in turbulent, high-velocity markets, companies competing in
mature, slow-growth industries, companies competing in stagnant or declining industries,
companies competing in fragmented industries, companies pursuing rapid growth, companies in
industry leadership positions, companies in runner-up positions, and companies in competitively
weak positions or plagued by crisis conditions. In each of these situations there are issues which
the mangers need to consider fitting a strategy to industry circumstances.

I. Strategies for Competing in Emerging Industries

An emerging industry is one in the formative stage. The business models and strategies of
companies in an emerging industry are unproved – what appears to be a promising business
concept and strategy may never generate attractive bottom-line profitability. Strategic success in
an emerging industry calls for bold entrepreneurship, a willingness to pioneer and take risks, an
intuitive feel for what buyers will like, quick responses to new developments, and opportunistic
strategy making.

A. Challenges When Competing in Emerging Industries

1. Competing in emerging industries presents managers with some unique strategy-making

challenges:

a. Because the market is new and unproved, there may be much speculation about how
it will function, how fast it will grow, and how big it will get

b. Much of the technological know-how underlying the products of emerging industries

is proprietary and closely guarded, having been developed in-house by pioneering

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 firms; patents and unique technical expertise are key factors in securing competitive
advantage

c. Often there is no consensus regarding which of several competing technologies will

win out or which product attributes will proves decisive in winning buyer favor

d. Entry barriers tend to be relatively low, even for entrepreneurial start-up companies

e. Strong learning and experience curve effects may be present

f. Since in an emerging industry all buyers are first-time users, the marketing task is to
induce initial purchase and to overcome customer concerns about product features,
performance reliability, and conflicting claims of rival firms

g. Many potential buyers expect first-generation products to be rapidly improved, so

they delay purchase until technology and product design mature

h. Sometimes firms have trouble securing ample supplies of raw materials and
components

i. Undercapitalized companies may end up merging with competitors or being acquired

by financially strong outsiders looking to invest in a growth market

2. The two critical strategic issues confronting firms in an emerging industry are:

a. How to finance initial operations until sales and revenues take off

b. What market segments and competitive advantages to go after in trying to secure a

front-runner position

3. A firm with solid resource capabilities, an appealing business model, and a good strategy
has a golden opportunity to shape the rules and establish itself as the recognized industry
front-runner.

B. Strategic Avenues for Competing in an Emerging Industry

Dealing with all the risks and opportunities of an emerging industry is one of the most
challenging business strategy problems. The early leaders in an emerging industry cannot rest on
their successes; they must drive hard to strengthen their resource capabilities and build a position
strong enough to ward off newcomers and compete successfully for the long haul.

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To be successful in an emerging industry, companies usually have to pursue one or more of the
following strategic avenues:

a. Try to win the early race for industry leadership with risk-taking entrepreneurship and
a bold creative strategy

b. Push to perfect the technology, improve product quality, and develop additional
attractive performance features

c. As technological uncertainty clears and a dominant technology emerges, adopt it

quickly

d. Form strategic alliances with key suppliers to gain access to specialized skills,
technological capabilities, and critical materials or components

e. Acquire or form alliances with companies that have related or complementary

technological expertise

f. Try to capture any first-mover advantages associated with early commitments to

promising technologies

g. Pursue new customer groups, new user applications, and entry into new geographical
areas

h. Make it easy and cheap for first-time buyers to try the industry’s first-generation
product

i. Use price cuts to attract the next layer of price-sensitive buyers into the market

The short-term value of winning the early race for growth and market share leadership has to
be balanced against the longer-range need to build a durable competitive edge and a
defendable market position.

Young companies in fast-growing markets face three strategic hurdles: (1) managing their
own rapid expansion, (2) defending against competitors trying to horn in on their success,
and (3) building a competitive position extending beyond their initial product or market.

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 Up-and-coming companies can help their cause by: (1) selecting knowledgeable members for
their boards of directors, (2) hiring entrepreneurial managers with experience in guiding
young businesses through the start-up and takeoff stages, (3) concentrating on out-innovating
the competition, and (4) merging with or acquiring another firm to gain added expertise and a
stronger resource base.

II. Strategies for Competing in Turbulent, High-Velocity Markets

More and more companies are finding themselves in industry situations characterized by rapid
technological change, short product life cycles because of entry of important new rivals into the
marketplace, frequent launches of new competitive moves by rivals, and fast-evolving customer
requirements and expectations – all occurring at once. Industry leaders are proactive agents of
change, not reactive followers and analyzers. Moreover, they improvise, experiment, and adapt
rapidly.

A. Strategic Postures for Coping with Rapid Change

1. The central strategy-making challenge in a turbulent market environment is managing

change.

2. A company can assume any of three strategic postures in dealing with high-velocity
change:

a. It can react to change

b. It can anticipate change, make plans for dealing with the expected changes, and
follow its plans as changes occur

c. It can lead change- Reacting to change and anticipating change are basically
defensive postures; leading change is an offensive posture.

3. There are three strategic postures a company can assume when dealing with high-velocity
change. They are: Invest aggressively in R&D, Initiate fresh actions every few months and
Develop quick response capabilities which involves Shift resources, Adapt competencies, Create
new competitive capabilities, and Speed new products to market

4. As a practical matter, a company’s approach to managing change should ideally

incorporate all three postures, though not in the same proportion.

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 5. The best performing companies in high-velocity markets consistently seek to lead change
with proactive strategies.

B. Strategic Moves for Fast-Changing Markets

1. Competitive success in fast-changing markets tends to hinge on a company’s ability to

improvise, experiment, adapt, reinvent, and regenerate as market and competitive
conditions shift rapidly and sometimes unpredictably.

2. The following five strategic moves seem to offer the best payoffs:

a. Invest aggressively in R&D to stay on the leading edge of technological know-how

b. Develop quick response capability

c. Rely on strategic partnerships with outside suppliers and with companies making tie-
in products

d. Initiate fresh actions every few months not just when a competitive response is
needed

e. Keep the company’s products and services fresh and exciting enough to stand out in
the midst of all the change that is taking place

3. Cutting-edge know-how and first-to-market capabilities are very valuable competitive

assets in fast-evolving markets.

III.Strategies for Competing in Maturing Industries

A maturing industry is one that is moving from rapid growth to significantly slower growth. An
industry is said to be mature when nearly all potential buyers are already users of the industry’s
products. In a mature market, demand consists mainly of replacement sales to existing users with
growth hinging on the industry’s ability to attract the few remaining buyers and convince
existing buyers to up their usage.

A. Industry Changes Resulting from Market Maturity

1. An industry’s transition to maturity does not begin on an easily predicted schedule.

2. When growth rates do slacken, the onset of market maturity usually produces
fundamental changes in the industry’s competitive environment:

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 a. Slowing growth in buyer demand generates more head-to-head competition for
market share

b. Buyers become more sophisticated, often driving a harder bargain on repeat

purchases

c. Competition often produces a greater emphasis on cost and service

d. Firms have a topping-out problem in adding new facilities

e. Product innovation and new end-use applications are harder to come by

f. International competition increases

g. Industry profitability falls temporarily or permanently

h. Stiffening competition induces a number of mergers and acquisitions among former

competitors, drives the weakest firms out of the industry, and produces industry
consolidation in general

B. Strategic Moves in Maturing Industries

As the new competitive character of industry maturity begins to hit full force, any of several
strategic moves can strengthen a firm’s competitive positions:

a. Pruning Marginal Products and Models: Pruning marginal products from the line
opens the door for cost savings and permits more concentration on items whose
margins are highest and/or where a firm has a competitive advantage.

b. More Emphasis on Value Chain Innovation: Efforts to reinvent the industry value
chain can have a fourfold payoff – lower costs, better product or service quality,
greater capability to turn out multiple or customized product versions, and shorter
design-to-market cycles.

c. Trimming Costs: Stiffening price competition gives firms extra incentives to drive
down unit costs. Company cost reduction initiatives can cover a broad front.

d. Increasing Sales to Present Customers: In a mature market, growing by taking

customers away from rivals may not be as appealing as expanding sales to existing
customers.

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 e. Acquiring Rival Firms at Bargain Prices: Sometimes a firm can acquire the
facilities and assets of struggling rivals quite cheaply.

f. Expanding Internationally: As its domestic market matures, a firm may seek to

enter foreign markets where attractive growth potential still exists and competitive
pressures are not so strong.

g. Building New or More Flexible Capabilities: The stiffening pressures of

competition in a maturing or already mature market can often be combated by
strengthening the company’s resource base and competitive capabilities.

C. Strategic Pitfalls in Maturing Industries

1. Perhaps the biggest mistake a company can make as an industry matures is steering a
middle course between low cost, differentiation, and focusing – blending efforts to
achieve low cost with efforts to incorporate differentiating features and efforts to focus on
a limited target market.

2. Being slow to mount a defense against stiffening competitive pressures

3. Concentrating more on protecting short-term profitability than on building or maintaining

long-term competitive position

4. Waiting too long to respond to price cutting by rivals

5. Over expanding in the face of slowing growth

6. Overspending on advertising and sales promotion efforts in a losing effort to combat

growth slowdown

7. Failing to pursue cost reduction soon enough or aggressively enough

IV. Strategies for Firms in Stagnant or Declining Industries

Achieving competitive advantage in stagnant or declining industries usually requires pursuing

one of three competitive approaches: focusing on growing market segments within the industry,
differentiating on the basis of better quality and frequent product innovation, or becoming a
lower-cost producer. Strategies here include:

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 1. Many firms operate in industries where demand is growing more slowly than the
economy-wide average or is even declining.

2. Stagnant demand by itself is not enough to make an industry unattractive. Selling out
may or may not be practical and closing operations is always a last resort.

3. Businesses competing in stagnant or declining industries must resign themselves to

performance targets consistent with available market opportunities.

4. In general, companies that succeed in stagnant industries employ one or more of three
strategic themes:

a. Pursue a focused strategy aimed at the fastest growing market segments within the
industry

b. Stress differentiation based on quality improvement and product innovation

c. Strive to drive costs down and become the industry’s low-cost provider

5. These three strategic themes are not mutually exclusive.

6. The most common strategic mistakes companies make in stagnating or declining markets
are:

a. Getting trapped in a profitless war of attrition

b. Diverting too much cash out of the business too quickly

c. Being overly optimistic about the industry’s future and spending too much on
improvements in anticipation that things will get better

V. Strategies for Competing in Fragmented Industries

The standout competitive feature of a fragmented industry is the absence of market leaders with
king-sized market shares or widespread buyer recognition. In fragmented industries competitors
usually have wide enough strategic latitude to either compete broadly or focus and to pursue a
low-cost, differentiation-based or best-cost competitive advantage.
A. Reasons for Supply-Side Fragmentation

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 1. Any of several reasons can account for why the supply side of an industry is fragmented:

a. Market demand is so extensive and so diverse that very larges numbers of firms can
easily coexist trying to accommodate the range and variety of buyer preferences and
requirements and to cover all the needed geographic locations

b. Low entry barriers allow small firms to enter quickly and cheaply

c. An absence of scale economies permits small companies to compete on an equal cost

footing with larger firms

d. Buyers require relatively small quantities of customized products

e. The market for the industry’s product or service is becoming more global, putting
companies in more and more countries in the same competitive market

f. The technologies embodied in the industry’s value chain are exploding into so many
new areas and along so many different paths that specialization is essential just to
keep abreast in any one area of expertise

g. The industry is young and crowded with aspiring contenders, with no firm having yet
developed the resource base, competitive capabilities, and market recognition to
command a significant market share

2. Some fragmented industries consolidate over time as growth slows and the market
matures.

3. Competitive rivalry in fragmented industries can vary from moderately strong to fierce.

4. Competitive strategies based on either low cost or product differentiation are viable
unless the industry’s product is highly standardized or a commodity.

5. Focusing on a well-defined market niche or buyer segment usually offers more

competitive advantage potential than striving for broader market appeal.

B. Strategy Options for a Fragmented Industry

1. Suitable competitive strategy options in a fragmented industry include:

a. Constructing and operating “formula” facilities – This strategic approach is frequently

employed in restaurant and retailing businesses operating at multiple locations.

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 b. Becoming a low-cost operator – When price competition is intense and profit margins
are under constant pressure, companies can stress no-frills operations featuring low
overhead, high productivity/low-cost labor.

c. Specializing by product type – When a fragmented industry’s products include a

range of styles or services, a strategy to focus on one product or service category can
be effective.

d. Specialization by customer type – A firm can stake out a market niche in a

fragmented industry by catering to those customers who are interested in low prices,
unique product attributes, customized features, carefree service, or other extras.

e. Focusing on a limited geographic area – Even though a firm in a fragmented industry

cannot win a big share of total industry-wide sales. It can still try to dominate a local
or regional geographic area.

2. In fragmented industries, firms generally have the strategic freedom to pursue broad or
narrow market targets and low-cost or differentiation-based competitive advantages.
Many different strategic approaches can exist side-by-side.

Examples of fragmented industries include the following:

 Book publishing
 Landscaping and plant nurseries
 Auto repair
 Restaurant industry
 Public accounting
 Women’s dresses
 Meat packing
 Paperboard boxes
 Hotels and motels
 Furniture

VI. Strategies for Sustaining Rapid Company Growth

Companies that are focused on growing their revenues and earnings at a rapid or above-average
pace year after year generally have to craft a portfolio of strategic initiatives covering three
horizons:

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 a. Horizon 1: “Short-jump” strategic initiatives to fortify and extend the company’s
position in existing businesses

b. Horizon 2: “Medium-jump” strategic initiatives to leverage existing resources and

capabilities by entering new businesses with promising growth potential

c. Horizon 3: “Long-jump” strategic initiatives to plant the seeds for ventures in

businesses that do not yet exist

A. The Risks of Pursuing Multiple Strategy Horizons

1. There are risks to pursuing a diverse strategy portfolio aimed at sustained growth:

a. A company cannot place bets on every opportunity that appears lest it stretch its
resources too thin

b. Medium-jump and long-jump initiatives can cause a company to stray far from its
core competencies and end up trying to compete in businesses for which it is ill suited

c. It can be difficult to achieve competitive advantage in medium- and long-jump

product families and businesses that prove not to mesh well with a company’s present
businesses and resource strengths

VII. Strategies for Industry Leaders

1. The competitive positions of industry leaders normally range from “stronger than
average” to “powerful.”

2. Leaders are typically well known and strongly entrenched leaders have proven strategies.

3. The main strategic concern for a leader revolves around how to defend and strengthen its
leadership position, perhaps becoming the dominant leader as opposed to just a leader.

4. The pursuit of industry leadership and large market share is primarily important because
of the competitive advantage and profitability that accrue to being the industry’s biggest
company.

5. Three contrasting strategic postures are open to industry leaders:

a. Stay-on-the-defensive strategy: The central goal of a stay-on-the-defensive strategy

is to be a first-mover. It rests on the principle that staying a step ahead and forcing

32
 rivals into a catch-up mode is the surest path to industry prominence and potential
market dominance. Being the industry standard setter entails relentless pursuit of
continuous improvement and innovation. The array of options for a potent stay-on-
the-defensive strategy can include initiatives to expand overall industry demand.

b. Fortify-and-defend strategy: The essence of “fortify-and defend” is to make it

harder for challengers to gain ground and for new firms to enter. Specific defensive
actions can include: (1) attempting to raise the competitive ante for challengers and
new entrants via increased spending for advertising, higher levels of customer
service, and bigger R&D outlays, (2) introducing more product versions or brands to
match the product attributes that challenger brands have or to fill vacant niches that
competitors could slip into, (3) adding personalized services and other extras that
boost customer loyalty and make it harder and more costly for customers to switch to
rival products, (4) keeping prices reasonable and quality attractive, (5) building new
capacity ahead of market demand to discourage smaller competitors from adding
capacity of their own, (6) investing enough to remain cost-competitive and
technologically progressive, (7) patenting the feasible alternative technologies, and
(8) signing exclusive contracts with the best suppliers and dealer distributors. A
fortify-and-defend strategy best suits firms that have already achieved industry
dominance and do not wish to risk antitrust action. A fortify-and-defend strategy
always entails trying to grow as fast as the market as a whole and requires reinvesting
enough capital in the business to protect the leader’s ability to compete.

c. Muscle-flexing strategy: Here a dominant leader plays a competitive hardball when

smaller rivals rock the boat with price cuts or mount any new market offensives that
directly threaten its position. Specific responses can include quickly matching or
exceeding challengers’ price cuts, using large promotional campaigns to counter
challengers’ moves to gain market share, and offering better deals to their major
customers. The leader may also use various arm-twisting tactics to pressure present
customers not to use the products of rivals. The obvious risks of a muscle-flexing
strategy are running afoul of the antitrust laws, alienating customers with bullying
tactics, and arousing adverse public opinion.

33
For example Microsoft allegedly engaged in a muscle-flexing strategy in which it used heavy-
handed tactics to routinely pressure customers, crush competitors, and throttle competition.
Microsoft “rewarded its friends and punished its enemies.” This type of market domination,
utilizing such tactics, creates an antitrust situation in the industry.

VIII. Strategies for Runner-Up Firms

Runner-up or second-tier firms have smaller market shares than first-tier industry leaders. The
key thing to note is that rarely can a runner-up firm successfully challenge an industry leader
with a copycat strategy. Runner-up firms can be:

a. Market challengers – employing offensive strategies to gain market share and build a
stronger market position

b. Focusers – seeking to improve their lot by concentrating their attention on serving a

limited portion of the market

c. Perennial runner-ups – lacking the resources and competitive strengths to do more

than continue in trailing positions and/or content to follow the trendsetting moves of
the market leaders

A. Obstacles for Firms with Small Market Shares

1. In industries where big size is definitely a key success factor, firms with small market
shares have some obstacles to overcome:

a. Less access to economies of scale in manufacturing, distribution, or marketing and

sales promotion

b. Difficulty in gaining customer recognition

c. Weaker ability to use mass media advertising

d. Difficulty in funding capital requirements

2. The competitive strategies most underdogs use to build market share and achieve critical
scale economies are based on:

a. Using lower prices to win customers from weak higher-cost rivals

34
 b. Merging with or acquiring rival firms to achieve the size needed to capture greater
scale economies

c. Investing in new cost-saving facilities and equipment, perhaps relocating operations

to countries where costs are significantly lower

d. Pursuing technological innovations or radical value chain revamping to achieve

dramatic cost savings

3. However, it is erroneous to view runner-up firms as inherently less profitable or unable to

hold their own against the biggest firms.

B. Strategic Approaches for Runner-Up Companies

1. Runner-up companies can have considerable strategic flexibility and can consider any of
the following seven approaches:

a. Offensive Strategies to Build Market Share: A challenger firm needs a strategy

aimed at building a competitive advantage of its own. The best “mover-and-shaker”
offensives usually involve one of the following approaches: (1) pioneering a leapfrog
technological breakthrough, (2) getting new or better products into the market
consistently ahead of rivals and building a reputation for product leadership, (3) being
more agile and innovative in adapting to evolving market conditions and customer
expectations than slower-to-change market leaders, (4) forging attractive strategic
alliances with key distributors, dealers, or marketers of complementary products, (5)
finding innovative ways to dramatically drive down costs and then using the
attraction of lower prices to win customers from higher-cost, higher-priced rivals, and
(6) crafting an attractive differentiation strategy based on premium quality,
technological superiority, outstanding customer service, rapid product innovation, or
convenient online shopping options.

b. Growth-via-Acquisition Strategy: One of the most frequently used strategies

employed by ambitious runner-up companies is merging with or acquiring rivals to
form an enterprise that has greater competitive strength and a larger share of the
overall market.

35
 c. Vacant-Niche Strategy: This version of a focused strategy involves concentrating on
specific customer groups or end-user applications that market leaders have bypassed
or neglected.

d. Specialist Strategy: A specialist firm trains its competitive effort on one technology,
product or product family, end use, or market segment. The aim is to train the
company’s resource strengths and capabilities on building competitive advantage
through leadership in a specific area.

e. Superior Product Strategy: The approach here is to use a differentiation-based

focused strategy keyed to superior product quality or unique attributes.

f. Distinctive Image Strategy: Some runner-up companies build their strategies around
ways to make themselves stand out from competitors. A variety of distinctive
strategies can be used.

g. Content Follower Strategy: Content followers deliberately refrain from initiating

trendsetting strategic moves and from aggressive attempts to steal customers away
from the leaders. Followers prefer approaches that will not provoke competitive
retaliation, often opting for focus and differentiation strategies that keep them out of
the leader’s path.

IX. Strategies for Weak and Crisis-Ridden Businesses

The strategic options for a competitively weak company include waging a modest offensive to
improve its position, defending its present position, being acquired by another company, or
employing an end-game strategy. A firm in an also-ran or declining competitive position has four
basic strategic options:

a. Offensive turnaround strategy – If it can come up with the financial resources, it

can launch an offensive turnaround strategy keyed either to low cost or new
differentiation themes

b. Fortify-and-defend strategy – Using variations of its present strategy and fighting

hard to keep sales, market share, profitability, and competitive position at current
levels

36
 c. Fast-exit strategy – Get out of the business either by selling out to another firm or by
closing down operations if a buyer cannot be found

d. End-game or slow-exit strategy – Keeping reinvestment to a bare bones minimum

and taking actions to maximize short-term cash flows in preparation for an orderly
market exit

A. Turnaround Strategies for Businesses in Crisis

1. Turnaround strategies are needed when a business worth rescuing goes into crisis; the
objective is to arrest and reverse the sources of competitive and financial weakness as
quickly as possible.

2. Management’s first task in formulating a suitable turnaround strategy is to diagnose what

lies at the root of poor performance. The next task is to decide whether the business can
be saved or whether the situation is hopeless.

3. Some of the most common causes of business trouble are: (1) taking on too much debt,
(2) overestimating the potential for sales growth, (3) ignoring the profit-depressing
effects of an overly aggressive effort to buy market share with deep cost cuts, (4) being
burdened with heavy fixed costs, (5) betting on R&D efforts but failing to come up with
effective innovations, (6) betting on technological long-shots, (7) being too optimistic
about the ability to penetrate new markets, (8) making frequent changes in strategy, and
(9) being overpowered by more successful rivals.

4. Curing these kinds of problems and achieving a successful business turnaround can
involve any of the following actions:

a. Selling Off Assets: Asset-reduction strategies are essential when cash flow is a
critical consideration and when the most practical ways to generate cash are (1)
through sale of some of the firm’s assets and (2) through retrenchment.

b. Strategy Revision: When weak performance is caused by bad strategy, the task of
strategy overhaul can proceed along any of several paths: (1) shifting to a new
competitive approach to rebuild the firm’s market position, (2) overhauling internal
operations and functional area strategies to better support the same overall business
strategy, (3) merging with another firm in the industry and forging a new strategy

37
 keyed to the newly merged firm’s strengths, and (4) retrenching into a reduced core of
products and customers more closely matched to the firm’s strengths.

c. Boosting Revenues: Revenue increasing turnaround efforts aim at generating

increased sales volume. Attempts to increase revenues and sales volume are necessary
(1) when there is little or no room in the operating budget to cut expenses and still
break even and (2) when the key to restoring profitability is increased use of existing
capacity.

d. Cutting Costs: Cost-reducing turnaround strategies work best when an ailing firm’s
value chain and cost structure are flexible enough to permit radical surgery, when
operating insufficiencies are identifiable and readily correctable, when the firm’s
costs are obviously bloated, and when the firm is relatively close to its break-even
point.

e. Combination Efforts: Combination turnaround strategies are usually essential in

grim situations that require fast action on a broad front. Combination actions
frequently come into play when new managers are brought in and given a free hand to
make whatever changes they see fit. Turnaround efforts tend to be high-risk
undertakings and they often fail.

6. A landmark study of 64 companies found no successful turnarounds among the most

troubled companies in eight basic industries.

7. A recent study found that troubled companies that did nothing and elected to wait out
hard times had only a 10 percent chance of recovery. Modifications to the turnaround
strategy increased this percentage.

B. Liquidation – The Strategy of Last Resort

1. Of all the strategic alternatives, liquidation is the most unpleasant and painful because of
the hardships of job elimination and the effects of business closings on local
communities.

2. In hopeless situations, an early liquidation effort usually serves owner-stockholder

interests better than an inevitable bankruptcy.

C. End-Game Strategies
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 1. An end-game or slow-exist strategy steers a middle course between preserving the status
quo and exiting as soon as possible.

2. Harvesting is a phasing-down strategy that involves sacrificing market position in return

for bigger near-term cash flows or current profitability.

3. A slow-exit strategy is a reasonable strategic option for a weak business in the following
circumstances:

 When the industry’s long-term prospects are unattractive

 When rejuvenating the business would be too costly or at best marginally

profitable

 When the firm’s market share is becoming increasingly costly to maintain or

defend

 When reduced levels of competitive effort will not trigger an immediate or rapid
falloff in sales

 When the enterprise can redeploy the freed resources in higher-opportunity areas

 When the business is not a crucial or core component of a diversified company’s

overall lineup of businesses

 When the business does not contribute other desired features to a company’s
overall business portfolio

4. End-game strategies make the most sense for diversified companies that have sideline or
noncore business units in weak competitive positions or in unattractive industries.

10 Commandments for Crafting Successful Business Strategies

The 10 commandments that serve as useful guides for developing sound strategies include:

1. Always put top priority on crafting and executing strategic moves that enhance a firm’s
competitive position for the long-term and that serve to establish it as an industry leader.

39
 2. Be prompt in adapting and responding to changing market conditions, unmet customer
needs and buyer wishes for something better, emerging technological alternatives, and
new initiatives of rivals. Responding late or with too little often puts a firm in the
precarious position of playing catch-up.

3. Invest in creating a sustainable competitive advantage, for it is a most dependable

contributor to above-average profitability.

4. Avoid strategies capable of succeeding only in the best of circumstances.

5. Don’t underestimate the reactions and the commitment of rival firms.

6. Consider that attacking competitive weakness is usually more profitable than attacking
competitive strength.

7. Be judicious in cutting prices without an established cost advantage.

8. Employ bold strategic moves in pursuing differentiation strategies so as to open up very

meaningful gaps in quality or service or advertising or other product attributes.

9. Endeavor not to get “stuck back in the pack” with no coherent long-term strategy or
distinctive competitive position, and little prospect of climbing into the ranks of the
industry leaders.

10. Be aware that aggressive strategic moves to wrest crucial market share away from rivals
often provoke aggressive retaliation in the form of a marketing “arms race” and/or price
wars.

Conclusion

Aligning a company’s strategy with its overall situation starts with a quick diagnosis of the
industry environment and the firm’s competitive standing in the industry. In crafting the overall
strategy, there are several pitfalls to avoid:

a. Designing an overly ambitious strategic plan

b. Selecting a strategy that represents a radical departure from or abandonment of the

cornerstones of the company’s prior success

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 c. Choosing a strategy that goes against the grain of the organization’s culture or
conflicts with the values and philosophies of the most senior executives

d. Being unwilling to commit wholeheartedly to one of the five competitive strategies

References

Essays, UK. (November 2013). Strategies for competing in various types of industries. Retrieved
from https://www.ukessays.com/essays/marketing/strategies-for-competing-in-various-types-of-
industries-marketing-essay.php?vref=1

Porter M. (1980). Competitive Strategy. New York: Free Press

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