Strategy Flashcards
Survivor bias
Denrell (2005):
- only see start-ups past 2 years: under-sampling failure
- corr risks vs high performance
- entry and exit bias inferences from reverse engineering causes of success
Performance data
Cubbin and Geroski (1987):
- regression to mean for most. - 17% sustained above average. Biased towards success.
Denrell (2005): performance is a noisy signal of capability - many factors impact including luck
Diligence approach
Powell (2017): diligence-based strategy
- people not eco agents so analysis of comp adv matters less than dil execution of fundamental activities
Powell and Arregle (2007):
- 2 axis as persistence of errors
- fail to capture opp, imitate, solve
- heterogenous in absence of comp adv
Denrell (2004):
- simulation models produce long-run performance under ass about underlying firm heterogeneity, diff emerged no differences in initial stock
Diligence examples
Flybe / Ryanair
Boeing
Grant Thornton - Patisserie Valerie
Generic strategies
Porter (1985):
- cost leadership and differentiation
RBV sources
Wernerfelt (1984)
Prahalad and Hamel (1990):
- core competencies
Barney (1995): VRIO
- valuable (exploit opp or neutralise threats)
- org: can take adv
Industry life-cycle
Johnson et al (2011):
- development, growth, shake-out, maturity, decline
Evidence for / against RBV > Industry
Rumelt (1984): - dispersion within industries 5-8x as large as across Rumelt (1991): - industry at best 8% dispersion - collective vs unique endowments
Waring (1996):
- intra-industry rents persist
- pharma/ software vs airline/utilities
Stategic factor markets
Barney (1986):
- logical impossibility for a theorem for high profits
- info in public domain
Alternative view to add to RBV / Industry view
Dyer and Singh (1988):
- linked with coopetition
- networked of relationships in which firm embedded in = dis(adv)
- idiosyncratic interfirm linkages source of relational rents: beyond boundaries of the firm
- e.g. 55% value in product in US is purchased -> many highly specialised inputs
- relation-specific assets, knowledge sharing
Dynamic capabilities
Eisenhardt and Martin (2000)
- set of specific and identifiable processes (alliawcing, strategic decisions, product development), path dependent in emergence
Felin and Powell (2016)
- organisational design is key enabler of dynamic capabilities
- Valve case study
- adhocracy: polyarchy, self-selecting teams, open - guard against obsolescence in a volatile industry
First mover difficulties
Aldrich and Fiol (1994):
- carve out new market, raise capital from sceptical investors, recruit untrained employees
- cognitive legitimacy (taken for granted) and sociopolitical legitimacy (acceptability)
Network effects
Van Alystne et al (2016):
- more people use platform, greater value for players. Virtuous feedback cycle.
- important for development phase.
First move advantages
Liberman and Montgomery (1988):
- geographic, switching costs, tech (patent or learning curve), network externalities, brand loyalty, scale economies, meld customer expectations
Adv fast follower
Cusumano et al (1992):
- buyer education, free-rider effects on RandD, marketing/distribution channels
Small firms innovate
Pavitt (1990):
- tech discontinuities tend to come from small firms as large are hindered by bureaucracy and conservatism
Complementary assets
Teece (1986):
- successful commercialisation requires know-how in Q to be used in conjunction with other capabilities. Cospecialised assets.
Tech: broader eco-system
Adner and Kapoor (2016):
- “right tech, wrong time”
- necessity of broader ecosystem
- e.g. HDTV pioneered in 1980s but 30 years..
- consider pressing issues in broader eco-system
Formal planning author and studies
Andrews (1971): formal planning - creation, evaluation, implementation
Boyd (1991):
- meta-analysis of 21 studies found the link between formal planning and performance weak
Mankins and Steele (2005):
- deliver 63% of the financial performance their strategies promised
Under-develop planning capabilities
Brews and Hunt (1999):
- in stable environment
- planning = learning how to adapt
- e.g. utilities, banks (reg, shadow banking)
Design school
Andrews (1971):
- determine strategy -> implement strategy
- ‘after full-blown, explicit, simple strategies are fully formulated can be implemented’
Emergent approach to strategising
Mintzberg (1990)
- formation and implementation inextricably entangled’
- allow innovation but avoid extreme incrementalism - muddling and reactive improvisation
- reject assumption of universality - not ‘one best way’
- must emphasis learning
- pure deliberate no external force whilst pure emergent require order despite absence of intention
Logical incrementalism
Quinn (1978):
- integrates analytical and behavioural
- strategic subsystems
Coopetition
Coopetition is identifying the value net and seizing strategic opportunities by cooperating with complementors
Brandenburger and Nalebuff (1996):
- value net: all players in the game
- value creation vs value appropriation
Gnyawali et al (2008):
- coopetition is simultaneous cooperation and competition between org actors
- 50% collaborative relations in same industry
- cognitive-psychological stress