Which Strategy When?

“Which Strategy When?”

The article : “Which Strategy When?” has been written by Christopher B. Bingham, Kathleen M. Eisenhardt and Nathan R. Furr. The article stresses upon understanding the circumstances and forces that shape a company’s competitive environment and choosing the most appropriate strategic framework. It talks about how firms seek opportunities within and outside their ecosystems using resource linkage or leveraging their existing resources. It is evident that not all strategies work equally well in all settings or conditions.
The right strategy for a company depends on its circumstances, the resources it has and the way the management utilizes the combination of those resources to gain competitive advantage. The first step is: “understanding the circumstances” i.e. a thoughtful review of whether the industry is stable or dynamic and a detailed analysis of the forces at play within the industry. The second step is “taking stock the resources” that the company has and determining how advantageous they are. If the company lacks any resources, it may build or it may buy them. The build-or-buy decision is the act of making a strategic choice between producing an item internally (in-house) or buying it externally (from an outside supplier). The buy side of the decision also is referred to as outsourcing.
Build-or-buy decisions usually arise when a firm that has developed a product or part—or significantly modified a product or part—is having trouble with current suppliers, or has diminishing capacity or changing demand. Build-or-buy analysis is conducted at the strategic and operational level. Obviously, the strategic level is the more long-range of the two. Variables considered at the strategic level include analysis of the future, as well as the current environment. Issues like government regulation, competing firms, and market trends all have a strategic impact on the build-or-buy decision. Firms should make items / venture into areas that...