Which Strategy When
FA L L 2 0 1 1
V O L . 5 3 N O. 1
Christopher B. Bingham, Kathleen M. Eisenhardt and Nathan R. Furr
Which Strategy When?
REPRINT NUMBER 53110
Downloaded by TEMBA Class of 2015 on 7/22/2014. University of Texas at Austin Copy Services, Huseyin Tanriverdi, Summer 2014
S T R AT E G Y
Which StrategyWhen?
Just when you think you have settled on the right strategy, you may need to change.
By understanding the particular circumstances and forces shaping your company’s competitive environment, you can choose the most appropriate strategic framework.
BY CHRISTOPHER B. BINGHAM, KATHLEEN M. EISENHARDT AND NATHAN R. FURR
MARKETS ARE CHANGING, competition is shifting and your business may be suffering or perhaps thriving, at least for now. Whatever the immediate circumstances, managers are forever asking the same questions: Where do we go from here, and which strategy will get us there? Should we fortify our strategic position, move into nearby markets or branch out into radically new territory? To help guide our decisions, most of us have a smorgasbord of strategic frameworks to draw on. But which one is the right one, and when? The strategic plans, market analyses and hefty binders that strategy consulting firms leave behind often jumble strategic lenses: Five-Forces analysis, portfolio review, assessment of core competencies; examination of profit pools, competitive landscape and so on. But which analyses are most helpful right now?
Most managers recognize that not all strategies work equally well in every setting. So to understand how to choose the right strategy at the right time, we analyzed the logic of the leading strategic frameworks used in business and engineering schools around the world. Then we matched those frameworks with the key strategic choices faced by dozens of industry leaders at different times, during periods of stability as well as change. (See “About the Research, p. 72.) Two surprising insights emerged.
First, we
V O L . 5 3 N O. 1
Christopher B. Bingham, Kathleen M. Eisenhardt and Nathan R. Furr
Which Strategy When?
REPRINT NUMBER 53110
Downloaded by TEMBA Class of 2015 on 7/22/2014. University of Texas at Austin Copy Services, Huseyin Tanriverdi, Summer 2014
S T R AT E G Y
Which StrategyWhen?
Just when you think you have settled on the right strategy, you may need to change.
By understanding the particular circumstances and forces shaping your company’s competitive environment, you can choose the most appropriate strategic framework.
BY CHRISTOPHER B. BINGHAM, KATHLEEN M. EISENHARDT AND NATHAN R. FURR
MARKETS ARE CHANGING, competition is shifting and your business may be suffering or perhaps thriving, at least for now. Whatever the immediate circumstances, managers are forever asking the same questions: Where do we go from here, and which strategy will get us there? Should we fortify our strategic position, move into nearby markets or branch out into radically new territory? To help guide our decisions, most of us have a smorgasbord of strategic frameworks to draw on. But which one is the right one, and when? The strategic plans, market analyses and hefty binders that strategy consulting firms leave behind often jumble strategic lenses: Five-Forces analysis, portfolio review, assessment of core competencies; examination of profit pools, competitive landscape and so on. But which analyses are most helpful right now?
Most managers recognize that not all strategies work equally well in every setting. So to understand how to choose the right strategy at the right time, we analyzed the logic of the leading strategic frameworks used in business and engineering schools around the world. Then we matched those frameworks with the key strategic choices faced by dozens of industry leaders at different times, during periods of stability as well as change. (See “About the Research, p. 72.) Two surprising insights emerged.
First, we
References: 1. M.E. Porter, “Competitive Strategy” (New York: Free Press, 1980); M.E (2000): 824-844; N. Siggelkow, “Evolution Toward Fit, ” Administrative Science Quarterly 47 no. 1 (2002): 125-159 , Decision Economics 29, no. 2-3 (2008): 241-256. ” (1990); D.J Resources, Harvard Business Review 73, no. 4 (1995): ” , (1991): 99-120; M.A ” (2009): 413-452. Business School Press, 1998); K.M. Eisenhardt and D.N. Review 79, no. 1 (2001): 107-116; C.B. Bingham, K.M. no. 1-2 (2007): 27-47; C.B. Bingham and K.M. Eisenhardt, “Rational Heuristics: The ‘Simple Rules’ That Strategists Copyright © Massachusetts Institute of Technology, 2011.