Overview
One of the common ways to view corporate strategy is through the lens of military strategy. That is, much like a military which allocates troop resources in order to offensively try to gain a position, which it then tries to defend and hold, the firm allocates resources to a position, which it then tries to defend. In this case, the position is not a physical location, but a product position along the cost and value axes. (see positioning and marketing)
Cost Drivers
The cost structure of a firm can either be a competitive advantage, or a detriment. The following is a brief list of some common cost drivers.
Value Drivers
- Delivery Quality - primarily the amount of time required to deliver the product
- Product Quality
- Breadth of the Product Line
- Customization
- Service
- Brand - brand along can be a value driver. In addition to being a signal to product quality, some customers associate with the brand and may even define their identity in relationship to it (think Harley Davidson)
- Complements
Sustainable vs Transient Advantage
Most strategists believe that the key to strategic success is to pursue a sustainable competitive advantage. Recent theorists have suggested that as competition becomes fiercer, only transient advantages are achievable, and that firms should pursue a series of transient advantages. That is, the truly competitive firm is the one which is continuously innovative (see forecasting above).
Once a management team embraces transient advantage, this will necessitate changes to the company strategy and methods of execution. In particular, the team needs to always be looking around the corner for the next advantage that can be achieved. This may require more frequent ajustments to company objectives, and may require periodic re-organizations and repointing of assets.
This method of continually monitoring the environment and objectives and adjusting according is central to optimal control.