BUSINESS: The Ultimate Resource

March 2004 Upgrade 18

MANAGEMENT LIBRARY
All the Right Moves
Constantinos C. Markides Why Read It?
Bill Gates once remarked that though his firm did good work, the problem was that products aged so quickly. It is plain from this that innovative strategies are vital for survival in business; organizations must differentiate themselves clearly from their competitors. They must also develop strategies that enable them to find and occupy a unique position within their own industry, while at the same being constantly on the watch for new strategic positions. In this book, Constantinos Markides guides readers towards discovering the breakthrough strategy that will work best for them.

Getting Started
Markides describes what makes a strategic position distinctive and how a business can make sure it occupies a unique strategic position within its industry. He demonstrates how established companies can discover and work on new strategic positions in parallel to their old position. On the basis of examples drawn from actual practice, he presents a guide to how a firm can allow an old strategy that obviously no longer has a future to run out and, simultaneously, prepare the ground for a new one. Contribution 1. No Strategy without Innovation According to the author, a successful business needs a strategy that enables it to find and occupy a unique position within its own branch of industry. But no position is made to last forever. Ambitious competitors not only copy attractive positions, they create new ones and these, over time, can become so successful that they endanger established positions. A company that is not permanently striving to discover new positions in its field encourages the competition to do precisely that.

Bloomsbury Publishing Plc 2004

BUSINESS: The Ultimate Resource

March 2004 Upgrade 18

2. Building a Unique Strategic Position Markides suggests that in order to create a unique strategic position and make the best use of it, a company must first define what business it is in. It must then decide what customers it wishes to appeal to and what products or services it intends to offer. The task then is to build up an organizational environment in which these decisions can be implemented. In his view, all this involves looking at, for example, the following areas: Core business: Defining ones own business is the starting point for any strategy. As soon as a definition is arrived at, actions follow from it automatically. But after it has been accepted, it has nevertheless to be questioned again and again, and one must always be on the lookout for better alternatives. Customers: In deciding who its customers are and what it is selling, the company at the same time marks out the terrain that it does not intend to enter: the customers it is not setting out to attract, the investments it is not going to action. In this way the company protects itself against squandering its limited resources through not having a clear focus or not following a clearly defined path. Activities and achieving objectives: The company must try to reach a dynamic understanding with its workforce. It can, for example, encourage internal diversity to develop competences that it then has in stock and promote a type of culture in which changes are welcomed. Values and capabilities: The values and capabilities that can give a company a lasting advantage are those that it is difficult for a competitor to achieve. They are rare, they cannot be copied, and there is no substitute for them. Organization: A companys organizational environment is made up of four elements: culture, structure, incentive systems, and workforce. If all these are to function as desired, then the company must ensure that it shapes the environment in such a way as to support their proper functioning. Strategy development: The development of a new strategy involves planning and trial and error. The planning is necessary to identify the parameters within which the experiments can take place. The process of strategy formation is made up of two parts: first, the production of ideas; second, assessment, experimentation, learning, and modification.

3. Preparing Strategic Innovations As soon as a company occupies a unique position within an industry, it must try to improve it. While improving its current position, it must be vigilant for new and potentially dangerous positions that its competitors may be adopting.

Bloomsbury Publishing Plc 2004

BUSINESS: The Ultimate Resource

March 2004 Upgrade 18

Since it cannot be taken for granted that new positions will harmonize with previously existing ones, it is often a good idea for established firms to establish their own units for that purpose. When a company takes over a new position and intends to concentrate on it entirely at some time in the future, it should separate itself from its old position through a gradual process of transition. In developing its strategy, a company must be able to envision itself going through the following cycle: First, it identifies a distinctive strategic position within its industry and occupies it. Then it does so well in that position that the position becomes more attractive than any other in the industry. While carrying the fight to its competitors from its present position, it constantly looks around for new strategic positions in the industry. Once it has identified another more promising position, it attempts to maintain the old position and the new one simultaneously. As it gradually removes itself from the old position, it completes the transition to the new one and begins the cycle over again.

Context
The book is based on numerous case studies of companies from different countries over a period of three years. The author has supplemented the results of these with material from other firms as well as generally available information. It is written from a management perspective and describes the thought processes that a manager has to go through to find a new and innovative strategy.

For More Information

Markides, Constantinos C. All the Right Moves: A Guide to Crafting Breakthrough Strategy. Boston, MA: Harvard Business School Publishing, 1999.

Bloomsbury Publishing Plc 2004