19 Competitive strategy in the digital age

Zusammenfassung

The last few decades have seen an extraordinary development in the field of Competitive Strategy. Ideas that were first developed by obscure academics working on Industrial Microeconomics were adopted (and adapted) by business school professors, consultants and, eventually, practitioners. Many tenets of corporate strategy held as evident in the last century are now rightly considered wrong. For instance, it would be difficult today for a company specializing in weapons to justify buying a shoe brand, as Oerlikon did with Bally, or for a European telecom to buy an isolated minority stake in an Asian country, as Swisscom did in Malaysia. Markets, i.e., investors, would immediately react against such strategic nonsense, no matter how much the respective Public Relations departments dressed the idea up. There is now a clear appreciation of the need for a solid strategy to ensure the health of the company, going beyond platitudes such as “diversifying cash-flow streams” or “establishing bridgeheads in emerging markets to ensure future growth”. We have all learned that future profits don’t depend on some “story telling”, but are subject to a strict “Strategic Logic”.