Markets are shifting, today's competitor is tomorrow's collaborator, and products and services are developed and sold in Internet time. Old generation strategy, marked by fixed goals, reliable assumptions, and a "point A to point B" approach is obsolete. It fails to accommodate relentless change--the one constant that affects every aspect of business. Managers spend too much time forecasting, analyzing, and measuring strategies for a fuzzy guess at "what could be" and not enough time acting on the here and now. Competing on the edge changes all that. Instead of locking into a too structured approach to strategy, companies that compete on the edge create a constant flow of large and small competitive moves that collectively result in a semi-coherent strategic direction. They thrive with a loosely formed organization where most planning happens at the precarious border between rigidity and anarchy, offering enough structure--and enough freedom--to adapt, change, and ultimately reinvent the firm time and again. Moves are complicated and unpredictable and they allow the company to change as quickly as the market does. Agility and adaptation are the aim when developing strategy today, as is recognizing patterns of change. A competing-on-the-edge strategy achieves this by relying on five key activities: improvisation, coadaptation, regeneration, experimentation, and time pacing.
Brown & Eisenhardt, Competing on the Edge, Chapter 1.
TBA
Porter, 1996. From competitive advantage to competitive strategy. HBR.
Boids In Flight
BusinessWeekCover Story: Strategic Planning: The rise and fall and rise of corporate strategy.
FORTUNE Feature: Gary--world's leading strategy guru--Hamel: Killer Strategies That Make Shareholders Rich
NOTE: Powerpoint slides are available in your Embanet class folder before class each week.
A multibusiness firm's competitiveness derives from its "core competencies." Core competence is the collective learning in the organization, especially the capacity to coordinate diverse production skills and integrate streams of technologies. Companies must identify core competencies, which provide access to a wide variety of markets, make a contribution to the customer benefits of the product, and are difficult for competitors to imitate.
Barney, Gaining and Sustaining Competitive Advantage, Chapter 11.
Brown & Eisenhardt, Competing on the Edge, Chapter 2.
Newell Company: Acquisition Strategy.
Newell is a $1.5 billion manufacturer and distributor of low-tech home and hardware products, geared to serve volume purchasers. In
1992, Newell is considering two approaches to expand its current product line with the acquisitions of Sanford Corp., a $140 million
manufacturer and marketer of writing instruments and office supplies, and
Levolor, a $180 million manufacturer of window blinds. The
case focuses on Newell's enduring corporate strategy as a guide for selecting appropriate acquisitions to grow the company.
Prahalad and Hamel 1990. The core competence in the corporation. HBR.
Tushman and O'Reilly 1996. The Ambidextrous Organization: Managing Evolutionary and Revolutionary Change, California Management Review.
Barney, Gaining and Sustaining Competitive Advantage, Chapter 12.
Brown & Eisenhardt, Competing on the Edge, Chapter 3.
PepsiCo and the Fast Food Industry.
After beginning to concentrate on implementing a concentric diversification strategy through internally developed products and acquisitions in 1965, PepsiCo has evolved into a well-balanced consumer goods company participating in the soft-drink, snack food, and fast food restaurant industries. In 1997 Roger Enrico changed all that, however, with the creation of TriCon Global Restaurants.
Hamel and Prahalad, 1989. Strategic intent. HBR.
Collis and Montgomery 1995. Competing on Resources: Strategy in the 1990s. HBR.
Collis and Montgomery 1998. Creating Corporate Advantage. HBR.
The Learning Organizations Homepage
This Organization is Dis-Organization: Oticon Holding A/S
New competitive realities have ruptured industry boundaries, overthrown much of standard management practice, and rendered conventional models of strategy and growth obsolete. Companies that have risen to global leadership over the past 20 years invariably began with ambitions out of proportion to their resources and capabilities. "Competing for the future" addresses how firms' strategists can ease the tension between competing today and clearing a path toward leadership in the future.
Barney, Gaining and Sustaining Competitive Advantage, Chapter 13.
Brown & Eisenhardt, Competing on the Edge, Chapter 4.
: Chase Manhattan Corp.: Making America's Largest Bank
Chase Bank and Chemical Bank intend to merge, producing the largest commercial bank in the United States,
and the fourth largest in the world. Projected financial benefits under the merger reflect significant planned
reduction in operating costs, including 17,000 employee layoffs. Management also expects the merger to produce
significant revenue increases as a result of increased economies of scale and scope, and other benefits of size and
market leadership. The task of valuing the merger gains, negotiating an acceptable merger price, and implementing
the post-merger restructuring is extremely complex. Illustrates the important link between corporate strategy and value creation in corporate
restructuring and the issues that arise in negotiating and implementing a complex merger between two
large institutions in an industry characterized by extreme change and uncertainty.
Big Bank Mergers in Canada: Financial Post archive on failed RB-BoM and TD-CIBC Mergers, and CT-TD merger
Hamel and Prahalad, 1993. Strategy as stretch and leverage. HBR.
Hamel and Prahalad, 1994. Competing for the future. HBR.
Burgelman and Grove, 1996. Strategic dissonance. California Management Review.
More than ever anticipated, alliances among firms are changing the way business is conducted. Companies most successful at constant learning and innovation don't do it alone. On the contrary: they are embedded in webs of the most intricate business relationship. They set up long-term strategic alliances, not with just one partner but with several. They depend on other companies for critically important operations, and for help in developing new products. They share people, equipment, and information--even with competitors. At times, it can be hard to tell where one company ends and another begins. The reasons are clear: companies must increasingly pool their capabilities to succeed in ever more complex and rapidly changing businesses. But the consequences for managers have been underestimated. Alliances create new units that compete with one another and single firms. When managed effectively, alliances can narrow the gap between leading firms and second-tier players and can be useful in establishing a first-mover advantage in an emerging market.
Barney, Gaining and Sustaining Competitive Advantage, Chapter 9.
Brown & Eisenhardt, Competing on the Edge, Chapter 5.
Xerox and Fuji Xerox
Describes the growth and development of Fuji Xerox, Xerox's joint venture in Japan, and the evolving relationship between Fuji Xerox and Xerox. Focuses on the technological development of Fuji Xerox, and on the contributions that Fuji Xerox has made to Xerox's competitive position worldwide. Presents a number of options for modifying the relationship between Xerox and Fuji Xerox in the future, when the two firms will face increasingly serious competition from global competitors. Fuji Xerox is a $4 billion company and arguably one of the most successful joint ventures ever between an American and Japanese firm. In some ways the evolution of
Ohmae, K. 1989. The global logic of strategic alliances. Harvard Business Review (March-April).
Hamel G., Y.L. Doz, C.K. Prahalad 1989. Collaborate with your competitors--and win. HBR.
Gomes-Casseres, B. 1993. Group versus group: How alliance networks compete. HBR.
Evolution of Keiretsu and their Different Forms
Alliance Revolution Resources By Ben Gomes Casseres
Brown & Eisenhardt, Competing on the Edge, Chapter 6.
Ballard Power Systems has spent over a decade developing its proprietary fuel cell technology and is acknowledged in many investor analyst reports as the "world leader" Ballard has spent over a decade developing its proprietary fuel cell technology and is acknowledged in many investor analyst reports as the "world leader." Although profitability may be years away, but Ballard Power Systems' zero-emission technology has already made lots of money for shareholders who bought in early. With the technology now proven, how should Ballard proceed?
Due: Case Team Write-Up/Debate 1
In Class: Performance Appraisal 1
Case Debate Assignment and Questions