Competitive Posture Analysis in Turbulent Environments
When systematic strategic planning was first introduced during the 1960s, the initial focus was on diversification of the firm. But as firms increasingly faced strategic challenges from technological turbulence, changing competition, saturation of growth, and sociopolitical pressures, it became evident that the problems posed by these challenges could not be resolved simply by adding new business areas to the firm. As a result, in the 1970s the strategist’s attention turned from diversification to optimizing the firm’s competitive strategies in its historical businesses and then to optimizing the firm’s total business portfolio. This shift was accelerated by the fact that the prospects for the different historical businesses of the firm became progressively differentiated from one another with respect to future growth, profitability, and strategic vulnerability.