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Teaching note

<Introduction to Strategy>Definitions, notions, approaches.

Authors Compiled by Kai Riemer

Course Interorganizational Systems

Date Summer Term 2002

Keywords Strategie, Competitve strategy

The content of this document is part of the IOS – Interorganizational Systems Course, SS 2002. It is based on

classificatory work for European socio-economic IST research project DOMINO (IST-2000-29545).

WI & IOS – Prof. Dr. Stefan Klein: All rights reserved.



Strategy - 2 - © Kai Riemer

IOS lecture – Teaching note on Strategy

Table of Contents

1 WHAT IS STRATEGY?..................................................................................................3 1.1 THE ROOTS OF STRATEGIC THINKING ................................................................................................3 1.2 DEFINITIONS AND NOTIONS OF STRATEGY ..........................................................................................3 1.3 “STRATEGY IS…”.........................................................................................................................4 1.4 STRATEGIC SCHOOLS ....................................................................................................................6 1.5 THE DIFFERENCE BETWEEN INTENDED AND REALIZED STRATEGY ................................................................8

2 LEVELS AND VIEWS OF STRATEGIC THINKING AND PLANNING.............................10 2.1 ORGANIZATIONAL LEVELS.............................................................................................................10 2.2 STRATEGY VERSUS TACTICS ..........................................................................................................11 2.3 PERSPECTIVES OF COMPETITIVE STRATEGY ........................................................................................11

3 COMPETITIVE STRATEGY .........................................................................................12 3.1 THE MARKET-BASED VIEW OF COMPETITIVE STRATEGY (MICHAEL E. PORTER ).............................................12 3.2 THE RESOURCE-BASED VIEW OF COMPETITIVE STRATEGY (PRAHALAD & H AMEL) ..........................................13 3.3 INTEGRATION OF MARKET-BASED AND RESOURCE-BASE VIEW .................................................................13

4 FROM SINGLE-FIRM TO INTER-FIRM STRATEGY.....................................................14 4.1 THE SINGLE-FIRM VIEW ON THE NETWORK ........................................................................................14 4.2 THE INTER -FIRM /NETWORK PERSPECTIVE ON STRATEGY ........................................................................15 4.3 CONCLUSION............................................................................................................................16

LITERATURE ...................................................................................................................17





1 What is strategy?

There is not much agreement about strategy. Numerous notions and definitions emerged from strategistsand practitioners dealing with strategy in various contexts, emphasizing different views, understanding

strategy in different ways. Thus, instead of concentrating on just one definition of strategy, it is more useful

to present different notions and perspectives. In doing so, we first look into the roots of strategic thinking

before we then introduce definitions and elaborate on perspectives and strategic views.

1.1 The roots of strategic thinking

The concept of strategy has been adopted from the military and adapted for use in business (cp. Nickols

2000a)1. Strategy is a term that comes from the Greek strategia, meaning "generalship." In the military,

strategy often refers to maneuvering troops into position before the enemy is actually engaged. In thissense, strategy refers to the deployment of troops. Once the enemy has been engaged, attention shifts to

tactics. Here, the employment of troops is central. Substitute "resources" for troops and the transfer of the

concept to the business world begins to take form.

1.2 Definitions and notions of strategy

Table 1 exemplarily introduces business related definitions and meanings of strategies derived from the work

of well-known strategists (taken from Nickols 2000a).

Source Strategy definition/notion

Steiner, George (1979):

Strategic Planning.

1. Strategy is what top management does that is of great importance to the

organization.

2. Strategy refers to basic directional decisions, to purposes and missions.

3. Strategy consists of the important actions to realize these directions.

4. Strategy answers the question: What should the organization be doing?

5. Strategy answers the question: What are the ends we seek and how should

we achieve them?

Mintzberg, Henry

(1994): The Rise and

Fall of Strategic Planning

1. Strategy is perspective, that is vision and direction.

2. Strategy is position; that is, it reflects decisions to offer particular products

and services in particular markets.

1 The German author von Clausewitz states: „„Die Strategie ist der Gebrauch des Gefechts zum Zwecke desKrieges; sie muss also dem ganzen kriegerischen Akt ein Ziel setzen, (...) sie entwirft den Kriegsplan,und an dieses Ziel knüpft sie die Reihe von Handlungen an, welche zu demselben führen sollen“ (vonClausewitz, 19th Century)





3. Strategy is a plan, a „how“, a means of getting frome here to there.

4. Strategy is a pattern in actions over time.

Ergo: strategy emerges over time as intentions collide with and

accommodate a changing reality („realized strategy“).

Andrews, Kenneth

(1980): The Concept of

Corporate Strategy.

„Corporate strategy is the pattern of decisions in a company that determines

(...) its objectives (...) and produces the (...) plans for achieving those goals,

and defines the range of business the company is to pursue, ...“

Distinguishes levels of strategic planning: corporate strategy and (the more

detailed) business strategy.

Michael Porter (1996):

What is Strategy?

Competitive strategy is „about being different.“ „It means deliberately choosing

a different set of activities to deliver a unique mix of value.“

Ergo: strategy is competitive positioning and differentiation.

Table 1: Different notions of strategy.

“What, then, is strategy? Is it a plan? Does it refer to how we will obtain the ends we seek? Is it a position

taken? Just as military forces might take the high ground prior to engaging the enemy, might a business

take the position of low-cost provider? Or does strategy refer to perspective, to the view one takes of

matters, and to the purposes, directions, decisions and actions stemming from this view? Lastly, does

strategy refer to a pattern in our decisions and actions? For example, does repeatedly copying a competitor's

new product offerings signal a "me too" strategy? Just what is strategy?” asks Fred Nickols and answers:

“Strategy is all these—it is perspective, position, plan, and pattern. Strategy is the bridge between policy or

high-order goals on the one hand and tactics or concrete actions on the other. Strategy and tactics together

straddle the gap between ends and means. In short, strategy is a term that refers to a complex web of

thoughts, ideas, insights, experiences, goals, expertise, memories, perceptions, and expectations that

provides general guidance for specific actions in pursuit of particular ends. Strategy is at once the course we

chart, the journey we imagine and, at the same time, it is the course we steer, the trip we actually make.

Even when we are embarking on a voyage of discovery, with no particular destination in mind, the voyage

has a purpose, an outcome, and an end to be kept in view.” (cp. Nickols 2000a). To subsume, the following

paragraphs briefly indicates the variety of the strategy term.

1.3 “Strategy is…”

Strategy is many things (taken from Nickols 2000b):

• Strategy is plan, pattern, position, ploy and perspective. As plan, strategy relates how we

intend realizing our goals. As pattern, strategy is the "rhyme and reason" that emerges in the course

of making the endless decisions that reconcile the reality we encounter with the aims we hold dear.

As position, strategy is the stance we take: take the high ground, be the low-cost provider, compete





on the basis of value, price to what the market will bear, match or beat the price offered by any

competitor, let no threat go unmet. As ploy, strategy is a ruse, it relies on secrecy and deception:

"Let not thy left hand know what thy right hand doeth." As perspective, strategy is part vantagepoint and part the view from that vantage point, particularly the way this view shapes and guides

decisions and actions.

• Strategy is ubiquitous. It can be found at the highest levels of corporate, governmental, military

and organizational endeavor and in small, medium and large units. It is used to define the basis for

competition and it can give rise to collaboration and cooperation. It can even be found guiding and

explaining individual initiative. It is everywhere.

• Strategy is an abstraction, a construct. It has no concrete form or substance. At best it can be

communicated in words and diagrams. But, just as "the map is not the territory," the words and

diagrams used to communicate strategy are not the strategy they convey.

• Strategy is the art of the general. It is broad, long range and far reaching. In part, it is about

the preparations made before battle, before the enemy is engaged. But it is also about avoiding

battle and making combat unnecessary. It is as much about destroying the enemy’s will to fight as it

is about destroying the enemy in a fight. If that sounds too militaristic for you, consider the business

parallel: a firm that raises such formidable barriers to entry that would-be competitors throw up

their hands and walk away. In short, destroying the will to compete differs little from destroying the

will to fight.

• Strategy is a general plan of attack , an approach to a problem, the first step in linking the

means or resources at our disposal with the ends or results we hold in view. Tactics, of course, is

the second step. Strategy is concerned with deploying resources and tactics is concerned with

employing them. Without some goal, some end in view, there can be no strategy and tactics will

consist of aimless flailing about—action for the sake of action. Strategy, then, is relative, which is to

say that it exists only in relation to some goal, end or objective. If someone asks you, "What is your

strategy?" be sure to reply, "In relation to what?"

• Strategy is direction and destination. At one and the same time strategy says, "We are headed

there — by this path." Yet, as noted earlier, it is also ruse and deception; that is, our strategy takes

us down a path with many branches and only we know our destination and the choices we will make

as we are confronted with them. In short, strategy is a way of confounding our enemies or, in less

warlike terms, our competitors.

• Strategy is a set of decisions made. What business are we in? What products and services will

we offer? To whom? At what prices? On what terms? Against which competitors? On what basis will

we compete?

• Strategy is getting it right and doing it right. On the one hand, we have to pick the right

course of action. On the other hand, once chosen, we have to carry it out properly.

Thus, strategy is manifold, it refers to the plan, as well as to the process of implementing the plan. At the

same moment there are different views of how strategy takes place: Is it really about planning? Or is





strategy an emerging issue? Am I able to plan everything and then implement the pan? Or have I to accept,

that in a complex world strategies emerge in the process of action? To elaborate on these questions, we

have to take a look into the history of strategic thinking and strategy theory.

1.4 Strategic schools

The history of strategy theories is to some extent similar to that of organization theory: Starting with a

mechanistic idea of strategic planning and design, newer approaches deal with strategy in a more holistic

manner, accepting, that strategy can only be planned to a certain extent, whereas a significant part is a

result of other effects during the implementation process within the organization (so-called “emergent

strategies” [Mintzberg, et. al. 2001]).

Mintzberg introduces 10 more or less distinctive theory schools, each representing a special perspective on

strategy or emphasizing certain issues within the field [Mintzberg, et. al. 2001]. Although emerging in ahistorically order, each school remains important, retaining their group of supporters (view figure 1 for a

brief overview of the 10 strategy schools).





1. The Design school – the 70ths1. The Design school – the 70ths

- Strategy as a FIT of strengths/weaknesses and opportunities/risks.

- The senior manager formulates clear and simple guidelines for implementation.

2. The Planning school – 1970 to 19802. The Planning school – 1970 to 1980

- Formal planning: clear processes, check lists, methods and techniques.

- Detailed plans instead of informal guidelines!

2. The Planning school – 1970 to 19802. The Planning school – 1970 to 1980

- Formal planning: clear processes, check lists, methods and techniques.

- Detailed plans instead of informal guidelines!

3. The Positioning school – the 80ths3. The Positioning school – the 80ths

- Founded by Michael E. Porter:

- Market positioning of company after a detailed/intesive analysis of the (market) situation.

3. The Positioning school – the 80ths3. The Positioning school – the 80ths

- Founded by Michael E. Porter:

- Market positioning of company after a detailed/intesive analysis of the (market) situation.

4. The Enterpreneurial school4. The Enterpreneurial school- The entrepreneur is the central persons. He steers/directs the company, he decides.

- Strategy is somehow mystic, based on intuition of the entrepreneur.

4. The Enterpreneurial school4. The Enterpreneurial school- The entrepreneur is the central persons. He steers/directs the company, he decides.

- Strategy is somehow mystic, based on intuition of the entrepreneur.

5. The Cognitive school – since the 80ths5. The Cognitive school – since the 80ths

- How do strategies emerge in the minds of people (mind models, landscapes)?

- What can we learn from these formation processes?

5. The Cognitive school – since the 80ths5. The Cognitive school – since the 80ths

- How do strategies emerge in the minds of people (mind models, landscapes)?

- What can we learn from these formation processes?

6. The Learning school6. The Learning school

- Notion of „emergent strategy“. Strategy emerges on all levels of the organization.

- Formulation and implementation are independent: „try, fail, learn and try again.“

7. The Power school7. The Power school

1. Internal: Strategy formulation is a process of negotiating, convincing and confrontation.

2. External: Company uses power positions in the market and in alliances.

7. The Power school7. The Power school

1. Internal: Strategy formulation is a process of negotiating, convincing and confrontation.

2. External: Company uses power positions in the market and in alliances.

8. The Cultural school8. The Cultural school

- Strategy development is a social process, grounded in the organizational culture.

- Examins cultural influences to strategy formulation.

8. The Cultural school8. The Cultural school

- Strategy development is a social process, grounded in the organizational culture.

- Examins cultural influences to strategy formulation.

9. The Environmental school9. The Environmental school- Contingency theory: Focuses on external impact and demands to the organization.

- The role of ecology, society and in general stakeholders to be focused.

9. The Environmental school9. The Environmental school- Contingency theory: Focuses on external impact and demands to the organization.

- The role of ecology, society and in general stakeholders to be focused.

10. The Configuration school10. The Configuration school

- Integrative view: Use different approach depending on different situations.

- Do not overemphasize one of the above views!

10. The Configuration school10. The Configuration school

- Integrative view: Use different approach depending on different situations.

- Do not overemphasize one of the above views!

Figure 1: Strategy schools (Mintzberg et al. 1999 and 2001).





For our purposes a threefold - complexity reducing - classification might be sufficient, distinguishing strategy

in (neo-) classical, modernist and cultural (symbolic) perspectives:

1. Design model (classical): In this model, strategy is the object of a planning and design process,where top managers define the organization’s goals and the processes for their implementation

(machine metaphor). According to Mintzberg’s design, planning and positioning school,

organizational strategy can be planned. Central to this perspective is the concept of aligning

(“fit”) the internal competencies and resources of the organization with the external situation, by

making decisions concerning the development of resources and the positioning in the market

(cp. also Contingency theory). Porter’s market-based view and the resource-based view

according to [Prahalad, Hamel 1996] as the main strategic strands are part of this strategy

perspective (see later).

2. Emergent model (modernist): In the emergent model, strategy is seen as to be emerging in the

process of action. Strategy cannot (or only to some extent) be planned and is the outcome of

the organization’s struggle to survive (cp. Darwinist ideas in Population Ecology) and the

adaptation to certain internal and external influences. Strategy formulation and implementation

are interdependent, strategy develops on every level within the organization and the realized

strategy outcome may differ considerably from the intended strategy (“it emerges”). The

organization is seen from a modernist perspective as an organism (“living system”). The

perspective corresponds to Mintzberg’s learning school and the power school, where strategy is

the outcome of intensive discussions and balancing of power relationships.

3. Culture model (cultural/symbolic): In this view, strategy formation is a social process, grounded

in the specific culture (of the organization and the environment). In the culture model theorganization develops and uses powerful symbols of business culture to mobilize support for

strategy formation and implementation. Strategy formation is more based on a social framing

and defining the right organizational context, than on planning and designing strategy in a

rational way. This view corresponds to Mintzberg’s cultural school.

Regarding the different schools, Mintzbergs argues that overemphasizing one school may cause failures due

to a restricted, unilateral view: “The greatest failings of strategic management have occurred when

managers took one point of view too seriously.”

1.5 The difference between intended and realized strategyIt is beyond doubt that the strategy, which will be realized in the end, differs from the intended one. Parts of

the intended strategy will not be realized, whereas emerging aspects and changes in the process slightly

adjust the strategy, so that the realized strategy is different from the intended one (see figure 2).





Realized

strategy

I n t e n d e d s t r a t e g y D e l i b e r a t e s t r a t e g y

E m e r g i n g

s t r a t e g i

e s

Non-realized

strategies Realized

strategy

I n t e n d e d s t r a t e g y D e l i b e r a t e s t r a t e g y

E m e r g i n g

s t r a t e g i

e s

Non-realized

strategies

Figure 2: From intended to realized strategy (Mintzberg 1999, p. 30).

It gets clear, that it one cannot persist exactly on what has planned, because of several influences, which

make it necessary to adjust the intended strategy. On the other hand it does not mean that planning is

useless at all. Planning is not necessarily about formalized analysis, but about “thinking before doing.” Thus,we can state as follows:

• The different strategy school are on the one hand paradigms, as well as simply different views in the

process of strategy development and formation.

• It is important to view the company’s situation in a holist multi-perspective manner and to ask the

right questions to uncover the main problems.

• Think in problems/issues not in concepts. Use concepts.

• Plan, but not to bureaucratic/formalized.

• Think, instead of blindly follow one strand.

• Accept dynamics, change and emerging strategies, but do not forget to plan (note: “If you plan, you

may fail. But without planning, you will not know whether you failed or not in the end. And therefore

you may be unable to learn from failure and to improve!”)





2 Levels and views of strategic thinking and planning

Strategic decisions in companies take place on different organizational levels. Simplifying, one candistinguish three organizational levels of strategic thinking: (1) the corporate level, (2) the business unit

level and the (3) functional level (figure 3).

2.1 Organizational levels

Corporate StrategyCorporate Strategy

• Corporate vision

• Corporate identity

• General goals, aims, perspectives

• Business Portfolio Definition of Strategic Business Units (SBU)

Competitive Strategy (Business Unit Strategies)Competitive Strategy (Business Unit Strategies)

• Design of SBUs

• Competitive strategy according to

(market and resource-based view)

positioning

resources

partners

Functional Strategies (Tactics)Functional Strategies (Tactics)

Skills

Financials Personnel Technology Procurement Operations Distribution

Functional Strategies (Tactics)Functional Strategies (Tactics)

Skills

Financials Personnel Technology Procurement Operations Distribution

Figure 3: Levels of strategic planning

Corporate strategy defines the markets and the businesses in which a company will operate. Competitive or

business (unit) strategy defines for a given business the basis on which it will compete with other

companies. And a functional strategy elaborates on goals, aims and actions to be undertaken in single

functional areas of the firm. Often, this is also referred to as tactics: specific decisions following the broad

strategic ones (for a distinction between strategy and tactics see later).

Corporate strategy is typically decided in the context of defining the company’s mission and vision, that is,

saying what the company does, why it exists, and what it is intended to become. Competitive strategy

hinges on a company’s capabilities, strengths, and weaknesses in relation to market characteristics and the

corresponding capabilities, strengths, and weaknesses of its competitors (positioning and resources). Here,

one might argue in a more market-based or more resource-based manner (see later).





2.2 Strategy versus tactics

As mentioned above, tactics is the specification and concretization of strategic aims. Whereas strategy drawsthe grand, long-term picture and gives ideas for the process of implementation, tactics brings ideas “down to

earth”. It is more short-term thinking and takes place during the process of strategy implementation. One

might argue, that good tactics is necessary to react to environmental or organizational changes. Thus,

tactical action is a reason for what we called “emerging strategies”. Whereas the top manager might be

concerned with strategy formulation, managers on the lower organizational levels might be responsible for

tactical decisions within functional areas of the firm.

Aspects Strategy Tactics Scale of the Objective Grand LimitedScope of the Action Broad and General Narrowly Focused

Guidance Provided General and Ongoing Specific and SituationalDegree of Flexibility Adaptable, but not hastilychanged

Fluid, quick to adjust and adapt in minoror major ways

Temporal scope Long-term Mid-term or Short-termTiming in Relation to

ActionBefore Action During Action

Focus of ResourceUtilization

Deployment Employment

Table 2: Comparison of strategy and tactics

2.3 Perspectives of competitive strategy

So far, we have recognized that there are several different strategic views. Elaborating on competitivestrategy, we will concentrate on the most popular ones, which are the market-based and the resource-based

approach. Following theses two approaches, we describe strategic planning as identifying and developing

competitive advantages, in which the two approaches use different perspectives. Competitive advantage

may either derive from a superior market positioning or a valuable resource base (figure 4).

EndsMeans

Market

positioning

Resource

base

Competitive

Advantage

Success

(sustainable)

Figure 4: Integration Sources of competitive advantage





In doing so, we elaborate on the one hand on the well-known positioning school by Porter corresponding to

the market-based view and moreover on Prahalad and Hamel’s resource-based strategy approach. To give a

brief introduction, we can characterise the two approaches as follows:

• Market-based view (MBV): Economic success is determined by the structure of the market in

which the firm operates and by the firm’s behaviour in relation to the well-known five market forces

(rivalry among competitors, power of customers, power of suppliers, new entrants and substitutes).

Competitive advantage derives from a strategic fit of the firms’ behaviour and the firm’s environment

in terms of a unique market positioning. Thus, it follows an outside-in perspective, by positioning the

firm in the market and then adjusting the firms value chain to the external requirements.

• Resource-based view (RBV): Here, strategic planning concentrates on the development,

maintenance and – very important – the exploitation of (core) resources. Competitive advantage

therefore derives from unique (core) resources and the ability (capabilities) to develop products

which provide a unique selling proposition as an outcome of these resources. Ergo, an inside-out

perspective is taken, by concentrating on (internal) resources and their exploitation via end-

production in the market.

In the following chapter, the core concepts of the two approaches will be briefly introduced and hyperlinks

will be given to be used for self introduction.

3 Competitive strategy

In the following paragraphs, only the most popular concepts of the market-based and resource-basedd view

will be shortly presented. Please inform yourself using the hyperlinks to web-sites on the Internet as well asby reading the two Articles from the Harvard Business Review.

3.1 The market-based view of competitive strategy (Michael E. Porter)

Three major concepts constitute the positioning school by Economist Michael E. Porter, which has

significantly shaped the market-based approach:

• The Five Forces model for analyzing the structure of the Industry and for positioning the firm.

• The model of the Value Chain of the firm to design a firm’s value creation processes.

• The three generic strategies a firm can take for positioning in the market (cost leadership,differentiation and focus)

Instead of describing the concepts here, please read the following article as well as the Internet resources

following the hyperlinks below.

Please read: Porter, Michael E. (1997): How Competitive Forces Shape Strategy (HBS Reprint),

in: Harvard Business School (Eds.), Competitive Strategy, S. 1-10: HBS Publishing, 1997

(originally published in 1979).





Please read: Porter’s Five Forces Model: http://www.themanager.org/Models/p5f.htm

Please read: Porter’s Value Chain Concept: http://www.themanager.org/Models/ValueChain.htm

Please raad: Porter’s Generic Strategies: http://home.att.net/~nickols/competitive_strategy_basics.htm

3.2 The resource-based view of competitive strategy (Prahalad & Hamel)

The resource-based view has been shaped by the work and articles of the strategists Prahalad and Hamel

and their book “Competing for the Future”. The main concept is the core competence/core product concept.

The following article elaborates on core competencies using several illustrative examples. Please use this

article to inform yourself.

Please read: Prahalad, C. L., Hamel, G. (1990). The core competence of the corporation. In:

Harvard Business Review, Vol. 90 No. 3, pp. 79-91.

3.3 Integration of market-based and resource-base view

Although the two approaches have been discusses as to be conflicting, recent publications [Börner 2000a

and Börner 2000b] integrate them to a comprehensive strategy approach, as exemplarily shown in figure 5.

market-based

approach

(Porter 1984)

market-based

approach

(Porter 1984)

resource-based

approach

(Hamel / Prahalad 1994)

resource-based

approach

(Hamel / Prahalad 1994)

competitive

advantage in terms of positioning

competitiveadvantage in terms of

positioning

core competencies

and core products

core competencies

and core products

5 forces of market competition

resources and capabilitiesof the firm

customer benefits(unique selling proposition)

customer benefits

(unique selling proposition)

• customer needs• segmentation

• positioning

FIT

RBVMBV

Figure 5: Integration of market-based and resource-based approach





whole plays the role of and strives to be perceived as a single player within the market. This

positioning of networks moves competition from a single-firm level to a network level leading to

a “group-vs-group” competition with joint branding and strategic development [Gomes-Casseres1994].

o Integration: One of the biggest challenges in network formation is the integration of all

partner’s contribution to a functioning whole. Drawing from the market-based approach, all

partner’s value chains (or more precisely the parts contributing to the network) have to be

integrated to an overall network value chain. Therefore a network wide planning and a common

understanding of value creation processes and a certain degree of standardization are

necessary.

• Resource-based approach:

o Differentiation: Similar to the differentiation in the single-firm case, the network has to work out its core competencies and resources to ensure the delivery of unique value to the market in

terms of products and services. This requires an explicit planning of the network resource pool

and the development of products and services based on these resources.

o Integration: All resources contributed by the partners have to be (virtually) aggregated to a

network resource pool. Therefore compatibility has to be assured, e.g. by standardization

activities and documentation of partner competencies, processes and interfaces, products,

services, etc.

4.3 ConclusionThe discussion of strategic shift from single-firm to a network perspective has shown, that new challenging

questions arise and that companies have to differentiate and integrate regarding their own within the

network and that a new level of strategic planning is concerned with the positioning of the entire network.

This requires differentiation and integration of the whole network within the market. Recapitulating, some

important questions arise, which enterprises have to face when entering a network context, as there are:

o Positioning within the network in terms of power/influence to achieve the own goals.

o Assure integration into the network by taking care of interfaces regarding processes and resources.

o Classification of resources with respect to importance and role to assure full control over critical

resources to minimize external dependence.

o Taking care of networkability, internal capabilities necessary to ensure the ability to collaborate with

others.

o Challenges of collaboration with and learning from competitors (“coopetion”).

o Changing scope in strategic planning: each single firm has to face the formation of the overall

network strategy: “group-vs-group”.





To inform yourself in more detail about alliances, networks and strategic thinking in an inter-firm context,

please read the following articles from Harvard Business Review. One article argues more from a market-

based perspective, whereas the other is more influenced by the resource-based approach:Please read:

1. Gomes-Casseres, Benjamin (1994). Group versus Group: How Alliance Networks

Compete. In: Harvard Business Review, 4, pp. 62-74.

o More MBV related: Positioning of strategic groups in the market.

2. Hamel, Gary; Doz, Yves L.; Prahalad, C. K. (1989): Collaborate with your Competitors -

and win, in: Harvard Business Review, 1 (1989), S. 133-139.

o More RBV related: Learning from competitors (internalize external and protect internal

resources, the coopetition concept.

Literature

Alt, Rainer; Fleisch, Elgar; Werle, O. (2000). The Concept of Networkability - How to make Companies

competitive in Business Networks. In: Hansen, H. R. et al. (eds.): Proceedings of the ECIS 2000. A

Cyberspace Odyssey, Wien 2000, pp. 405-411.

Andrews, Kenneth (1980): The Concept of Corporate Strategy, 2nd Edition . Dow-Jones Irwin, 1980.

Börner, Christoph (2000a). Porter und der "Resource-based View". In: Wisu, 5 (2000), pp. 689-693.

Börner, Christoph (2000b). Die Integration marktorientierter und ressourcenorientierter Strategien. In: Wisu,

6 (2000), pp. 817-821.

Fleisch, Elgar (2000). Gestaltung netzwerkfähiger Unternehmen. In: Wisu 8/9, pp. 1112-1119.

Gomes-Casseres, Benjamin (1994). Group versus Group: How Alliance Networks Compete. In: Harvard

Business Review, 4, pp. 62-74.

Hamel, Gary; Doz, Yves L.; Prahalad, C. K. (1989): Collaborate with your Competitors - and win, in: Harvard

Business Review, 1 (1989), S. 133-139.

Hamel, Gary; Prahalad, C. K. (1996). Competing for the Future. Boston.

Klein, Stefan (1996). Interorganisationssysteme und Unternehmensnetzwerke: Wechselwirkungen zwischen

organisatorischer und informationstechnischer Entwicklung. Wiesbaden.

Mintzberg, Henry (1994): The Rise and Fall of Strategic Planning, Basic Books, 1994.

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