41126-piy-ch02-01.pdf_18891 - CHAPTER 2 Strategy and...

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sustainable competitive advantage Financial performance that consistently outperforms industry averages. CHAPTER 2 Strategy and Technology 1. INTRODUCTION Managers are confused, and for good reason. Management theorists, consultants, and practitioners of- ten vehemently disagree on how firms should craft tech-enabled strategy, and many widely read articles contradict one another. Headlines such as “Move First or Die” compete with “The First Mover Disad- vantage.” A leading former CEO advises “destroy your business,” while others suggest firms focus on their “core competency” and “return to basics.” The pages of the Harvard Business Review declared “IT Doesn’t Matter”, while a New York Times’ bestseller hails technology as the “steroids” of modern business. Theorists claiming to have mastered the secrets of strategic management are contentious and con- fusing. But as a manager, the ability to size up a firm’s strategic position and understand its likelihood of sustainability is one of the most valuable, yet difficult skills to master. Layer on thinking about tech- nology—a key enabler to nearly every modern business strategy, but also a function often thought of as easily ‘outsourced’—and it’s no wonder that so many firms struggle at the intersection where strategy and technology meet. The business landscape is littered with the corpses of firms killed by managers who guessed wrong. Developing strong strategic thinking skills is a career-long pursuit—a subject that can occupy tomes of text, a roster of courses, and a lifetime of seminars. While this chapter can’t address the breadth of strategic thought, it is meant as a primer on developing the skills for strategic thinking about technology. A manager that understands issues presented in this chapter should: be able to more clearly see through seemingly conflicting assertions about best practices, be better prepared to recog- nize opportunities and risks, and be more adept at successfully brainstorming new, tech-centric ap- proaches to markets. 2. THE DANGER OF RELYING ON TECHNOLOGY LEARNING OBJECTIVES After studying this section you should be able to: 1. Define operational effectiveness and understanding the limitations of technology-based com- petition leveraging this principle. 2. Define strategic positioning and the importance of grounding competitive advantage in this concept. 3. Understand the resource-based view of competitive advantage. 4. List the four characteristics of a resource that might possibly yield sustainable competitive advantage. Firms strive for sustainable competitive advantage , financial performance that consistently outper- forms their industry peers. The goal is easy to state, but hard to achieve. The world is so dynamic, with new products and new competitors rising seemingly overnight, that truly sustainable advantage might seem like an impossibility. New competitors and copycat products create a race to cut costs, cut prices, and increase features that may benefit consumers but erode profits industry-wide. Nowhere is this
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41126-piy-ch02-01.pdf_18891 - CHAPTER 2 Strategy and...

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