Strategic Stretch
Strategic Intent is seen as going beyond Business as Usual Seen as Core Competency in Practice Apple and Honda's strategic intent was global dominance. Compare with Strategic Fit which doesn't have a long term component. Basically they used their core competences to achieve Strategic Intent. The difference between Intent and Resources is call Strategic Stretch.
Examples:
- Apple beat Microsoft in mobile apps market
- Google beat Microsoft is search and categorization of networked information
- CNN beat CBS is news and current affairs presentation
Firms first need to understand the competitive environment - e.g. those companies winning and losing market share. The next step is to diagnose the competitive environment. e.g. Its market segments, potential for profitability and growth.
Industrial structure analysis points us to the what of competitiveness. i.e What make the company more profitable. News whats have been exhorted such as Six Sigma, become customer led, compete on time. Understanding the what of competitiveness is a prerequisite to catching up. Understanding the why is the prerequisite for getting out in front. Who do some companies continually redefine the competitive environment e.g. Apple while others just follow.
Many companies focus external factors such as monetary and fiscal policy, education policy, tax and other factors as ways of explaining their competitive decline. Instead they should focus on internal factors as the key to their competitiveness success.
Breaking the Managerial Frame
Managers require their frame of reference from the culture of the company, business school education, peers, consultants and their own experience. They therefore frame their competitive stratagems from these managerial frames.
From Form to Stretch
A good place to start to break these managerial frames is to ask the question What is strategy? The answers normally center around;
- The concept of fit or the reparations between the company and its competitive environment.
- The allocation of resources among competing investment opportunities
- A long-term perspective towards building a company.
This perspective is not wrong just imbalanced. It has obscured the merits of alternative frames in which the concept of scratch supplements the idea of fit; leveraging resources is as important as allocating them. Take two companies. Company A is big, dominant on the market and can outspend its competition on R&D, marketing and other resources. Company B is an upstart, with fewer resources, employees and financing etc. Strategically, Co A can preempt Beta by building new plant, increasing production and introducing new products at a lower cost. But B can retaliate by adopting guerrilla tactics, searching for undefended niches, etc.
To be expanded to include Strategy as Stretch and Leverage - Hamel and Prahalad HBR March - April 1993
