Creating Corporate Advantage

Most executives focus on individual elements of their resources, business, and organization without integrating all the parts into a whole. First, it is important to understand what a good corporate strategy is. According to the authors, it is not a random collection of individual building blocks, rather a fully constructed system of interdependent parts. In order for the organization to thrive, executives must actively direct decisions about resources the corporation will develop, and the business in which it will compete.

During this, the executives must make sure all elements are aligned with one another. By applying the triangle of corporate strategy, the strengths of all special assets, skills and capabilities will illustrate how each element "fits. " The Resource Continuum is another model that shows the basis for corporate advantage along a continuum. This model can be applied differently to different business, as one size does not fit all. Many companies choose to integrate other businesses based on products rather than resources, and end up with a "plain vanilla" infrastructure.

By following this continuum it will constrain the set of businesses to compete in while limiting th There is no one best way to design a product, make a product, manage operations, or serve customers. The “best way” depends on a firm’s objectives, resources, competencies, and context (products and customers). Firms choose to compete in different ways. A firm’s strategy defines how it will compete in the marketplace–its own best way. Strategy formulation involves (1) defining the primary task, (2) assessing core competencies, (3) determining order winners and order qualifiers, and (4) positioning the firm.

The secret to effective strategy? Excel on the order winners, meet the order qualifiers, capitalize on core competencies, and maintain focus. Corporate strategy drives functional strategy. Functional strategies must be consistent with and supportive of corporate strategy. Strategic decisions in the operations function involve products and services, processes and technology, capacity and facilities, human resources, quality, sourcing, and operating systems. Policy deployment is a planning system that helps align day-to-day operating decisions with the company’s overall strategy.