Real-World Education for Modern Marketers

Join Over 600,000 Marketing Professionals

Start here!
N E X T
Text:  A A

Looking Down on Corporate Strategy

by Cristian Mitreanu  |  
August 29, 2006
  |  9,344 views

Learning from past experiences to improve future actions is an important characteristic of human nature. People are constantly searching for "silver bullets" to help them successfully solve problems. They are perpetually on the lookout for formulas for success that are universally valid, regardless of time, location, or situation.

Obviously, the world of business is no exception.

Achieving and sustaining success in business is something that has always preoccupied practitioners and academics alike. After formulas for success were developed for processes and departments (e.g., the assembly line), it was natural to start looking at the organization as a whole. Consequently, in the early 1960s, the concept of strategy in business began to emerge.

Borrowed from the military body of knowledge due to historical circumstances, the concept of strategy was initially intended to (1) mobilize the company, having all departments "pull" in the same direction, and (2) make the most of its available resources, which, due to the typically less-diversified company of the time, was easily translated into finding a favorable match between its resources and its business environment.

Over time, as more offerings became commodities and more companies were faced with increased competition, the term "corporate strategy" seemed to make perfect sense. Few, if any, would question its usage. Ironically, though, while the term's validation got stronger with the passage of time, the concept itself became increasingly unfit for the realities of the evolving business world.


The best evidence supporting that claim is offered by the emergence of the concept of the business model in the 1990s. Although focused more on the operational side of business, like strategy, the concept of the business model is also intended to describe/prescribe the essence of enduring corporate success. However, its increasing popularity points to a mounting dissatisfaction with the effectiveness of corporate strategy.

Surprisingly, the root cause for the current situation originates in a widespread lack of perspective. Under the strong influence of strategy's military heritage, most of the research is based on a limited, insider view of corporate strategy. It is what we call the "general's view," or the answer to the question "What should the CEO do?"

As a result, strategy tends to be seen as a tool owned by the top management team, which is usually materialized in a plan (with corporate objectives) or a position (relative to competition). Encouraged by the executives' limited tenure as well, this approach focuses on a limited time horizon, which in a very dynamic environment like the one we live in can render corporate strategy irrelevant. So, where is the problem?


Sign up for free to read the full article.Read the Full Article

Membership is required to access the full version of this how-to marketing article ... don't worry though, it's FREE!

WANT TO READ MORE?
SIGN UP TODAY ...
IT'S FREE!

We will never sell or rent your email address to anyone. We value your privacy. (We hate spam as much as you do.) See our privacy policy.

Sign in with one of your preferred accounts below:

Loading...

Cristian Mitreanu is the founder and lead researcher of RedefiningStrategy.com (www.RedefiningStrategy.com). Contact him by email at cmitreanu@redefiningstrategy.com.

Rate this  

Overall rating

  • Not rated yet.

Add a Comment

MarketingProfs uses single
sign-on with Facebook, Twitter, Google and others to make subscribing and signing in easier for you. That's it, and nothing more! Rest assured that MarketingProfs: Your data is secure with MarketingProfs SocialSafe!