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1329 Strategic Management - Coggle Diagram

- - - - Industry Effect = Effect on performance of the industry
      - Corporate Effect = Effect on performance of the individual company
      - Reasons for this change
        
        Growing differences among corporate parents
        
        Increasing importance of intangible assets
        
        Increasing globalization of markets
        
        Increasing use of MnA
        
        Increasing importance of managerial talent
      - Implications
        
        More focus on intangible assets
        
        More focus on managerial talent
  - - - Corporate (competitive) advantage
        
        Digitalization can create new sources of competitive advantage
        
        Data-driven insights
        
        Customized products
        
        New Business Models
      - Firm scale, scope, and boundaries
        
        Reach new markets and customers
        
        Collaborate with customers
        
        May lead to changes in size, scope and boundaries
      - Internal structures and design
        
        Improve communication
        
        Improve Coordination
        
        Improve decision-making
        
        These three may lead to changes in the way firms are organized and managed
  - - - Shaping
        
        Create new knowledge and shape environment
      - Adapting
        
        Learn from environment and adjust to change
      - Which choice depens on knowledge problems and epistemology
        
        Low Knowledge Problem + Positivist epistemology = Shaping
        
        High Knowledge Problem + Constructivist epistemology = Adapting
- - - - Airbnb reduces occupancy rates of all hotels, but more for low-quality
      - Airbnb increases the prices and service quality investments of high-quality hotels, but decreases them for low-quality hotels
      - Airbnb makes hotel industry more heterohenous
        
        Low quality hotels compete on price with airbnb
        
        High quality hotels reposition themselves in the higher end
  - - - Boundary questions are fundamental to the competitive process
      - Hard to define competitive boundaries in imperfectly competitive markets due to infinite dimensionalization, eg infinite similarities and differences
    - - Extend literature on markets, competition, and categories as related to strategic management
      - Comparing and contrasting the following approaches to categories and competition
        
        Economics
        
        Provides good methods for measuring competitive interdependence at product and firm level, but ignores socio-cognitive aspects of categorization and assumes stable preferences
        
        Strategic Management
        
        Strength of recognizing the importance of strategic groups as an intermediate level of analysis between firms and industries, but has weakness of lacking clear definitions and criteria for identifying such groups and their effects on performance
        
        Organizational Theory
        
        Strength in emphasizing the social constructionist nature of categories and their influence on market outcomes, weakness of neglecting role of firm level strategic choices and actions in shaping categories
  - - - Strong network effects increased revenues of market leaders relative to followers when using freemium, but not when paid only strategies were used
      - Freemium strategies amplify the advantage of leaders over followers in network industries, but also pose challenges for profitability
- - - - Future studies should build more on Penrose and pay attention to other factors than resources such as managerial cognition and environmental conditions
    - - Versatile Resources associated with growth
        
        Can be both externally and internally fungible resources
        
        Fungibility = Ease of exchanging or.redeployring resources
      - VRIN Resources create sustainable competitive advantage but not growth
  - - - The abilities of firms to adapt to changing environments
      - Two core elements
        
        Attention Control
        
        Problem Solving
      - Three fallacies that hinder effectiveness of dynamyc capabilities
        
        Transfer fallacy
        
        Interpretation Fallacy
        
        Expectation Fallacy
    - - The routines and processes that firms use to operate
    - - Attention control and problem solving interact to reconfigure resources and modify ordinary capabilities.
      - OVercoming the three fallacies enable dynamic capability to impact NPD (New product) performance and outcomes
  - - - The endogenous degradation of strategic resources that are valuable and scarce for the firm
    - - Typology of strategic resources based on two dimensions
        
        Perishability/Depletability
        
        Tradability
      - SRD can negatively affect performance through:
        
        Resource exhaustion
        
        Capability erosion
        
        Loss of competitive advantage
        
        Erosion is identified as a boundary condition for this relationship
      - Firms might mitigate the impact of SRD by synchronizing its resource management actions with temporal properties of strategic resources
- - - - Corporate purpose influences stakeholder trust in 2 ways
        
        Cognitive pathway
        
        Affective Pathway
      - Drawbaks and challengese of purpose as basis of trust
        
        Purpose Washing
        
        Decoupling
        
        Inconsistency
        
        Value Pluralism
  - - - Ecosystem
        
        Group of firms that produces products/services that comprimise coherent solution
      - Bottlenecks
        
        Constraint ecosystems growth or performance
    - - Firms can adopt one of three ecosystem strategies
        
        System
        
        Component
        
        Bottleneck
      - Location and crowdedness of bottlenecks affect how firms balance cooperation and competition over time
      - Ecosystem maturity affects how firms balace cooperation and competition, over time system become entrenched, component cooperative and differentiated, bottleneck may exit low margin components or become system
  - - - OS Fits to explain how and why organizations cooperate, compromise, or conflict with each other
    - - Compatibility between an organization and a stakeholder when their characteristics are well matched
      - Two dimensions
        
        Value congrueence
        
        Strategic Complementarity
      - OS Misfit
        
        Different from low or absent fit
        
        Might lead to conflict of compromise
        
        Conflict when high on both
        
        Compromise when high on one and low on one
- - - - Amazon Kindle ebook
    - - Publishers face tension between value creation and value appropriation
        
        Kindle benefits from network effects which could increase its bargaining power
        
        Complementors (publishers) can use product offering decisions as strategic mechanism to balance the value creation/appropriation risk in interorganizational relationships
        
        Complementors product offering decision vary depending on product demand, competitiveness, and importance, as well as complementor's size, resources and outside options
        
        Complementor's product offering decisions have implications for the development and performance of the ecosystem and its particiipants
    - - Complementors should be aware of the potential tension when joining digital platform with strong network effects
      - Complementors shuld leverage their product portfolios to both benefit from digital technology and maintain bargaining power
      - Complementors should consider offering high demand products, their competitive products, and their moderately important products on the platform, while withholding low demand products, less competitive products and their most important products.
  - - - Ecosystem legitimacy is a process where and orchestrator, complementors, users, and external actors together drive ecosystem legitimacy through discursive and performative processes
      - Discursive processes
        
        Framing, sensemaking, positioning, recognition
        
        Improves cognitive legitimacy by giving meaning and comprehensibility
      - Performative processes
        
        Strategic action, value realization, adoption, and external intervention
        
        Promotes normative legitimacy by proving viability
      - Ecosystem identity construction comprises the emergence of mutual understanding of what the ecosystem is about and its goals, and how it seeks to reach this. Ecosystem identity facilitates legitimation from internal and external perspectives.
      - Three processes for legitimacy emergence
        
        Discursive legitimation
        
        Performative legitimation
        
        Ecosystem identity construction
      - Four types of actors
        
        Orchestrator
        
        Complementors
        
        Users
        
        External actors
    - - Emerging ecosystems need to address wide variety of stakeholders
      - Need to overcome "Chicken and egg"
      - Em ecosystems establish collaborative routines and coherent boundaries among ecosystem participants that are limited in ther understanding of interdependence-related risks
      - Em ec need to balance generativity and coherence in ecosystem outputs by using appropriate coordination structures such as platforms or shared identities
  - - - Framework to analyze how pace of technology substitution depends on the interaction between ecosystems of old and new technologies
    - - Ecosystem emergence challenge
        
        Extent to which innovation in other components and complements is required for the new technology to achieve its potential performance
      - Ecosystem extension opportunity
        
        Extent to which improvement in other components and complements enhances performance of the old technology
    - - 4 regimes of substitution based on the levels of emmergence challenge
        
        Fastest when both low
        
        Slowest when both high
        
        Intermediate when one high and one low
      - Pace of substitution is not only determined by performance of the focal technologies but also evolution of ecosystems
      - Interaction between ecosystem emergence challenge and ecosystem extension opportunity can create four different substitution regimes with different predictions for the pace of substitution
      - Understainding ecosystem dynamics in new and old can result in better strategic decisions regarding new or old tech opportunities
    - - 10 transitions in semiconductor industry
- - - - How strategy makesrs can use narratives to influence the acceptence of transformative change
    - - Transformative change
        
        Radical and continous change in organizations strategy
    - - Alessi
        
        Italian Company that transformed from steel tableware to producer of household objects
    - - Three sets of narrative practices
        
        Memorializing
        
        Revisioning
        
        Sacralizing
  - - - Examine how centralization affects the openness of strategy making in organizations
    - - Propose a distinction between participatory and inclusive practices
      - The degree of centralization affects the choice of participatory or inclusive practices in open strategizing, as well as the information transfer and process transparency between phases
      - Centralized org more likely to use participatory practices in alternatives generation and inclusive practises in idea selection, while decentralized inclusive in both
      - Info transfer in cen. organizations is characterized by filtering of ideas and handover from one set of participant to another, while in decentralized characterzed by championing of ideas and carryover by participants
      - Process transparency is higher in decentralized org than cetr., as inclusive practices foster more communication, coordination, and commitment among stakeholders.
    - - HealthCO and FoodCo
    - - Recognize potential benefits of inclusion for enhancing stakeholder engagement, alignment, and learning in open strategizing, as well as potential challeges of managing diversity, conflict, and coordination among stakeholders
  - - - Problem formulation is a crucial and overlooked aspect of strategic decision making
      - Problem formulation is paramount to strategic decision making
      - Problem formulation is intimately related to theorizing about value creation and caputre
      - Problem formulation is often influenced by individual and group cognitive, and other factors, which can lead to biases
      - Effective problem formulation processes depend on complexity, uncertainty, and ill-structuredness of the situation, and characteristics of the group involved. They require sharing unique info, avoid groupthink, agreeing on common criteria, and exploring multiple formulations before moving to solution generation
      - Problem formulation has implications for alternative strategies and making the strategic decision, and also implementing and evaluating this.
    - - Problem formulation
        
        process of developing a coherent and comprehensive theory of the causes and consequences of a situation that deviates from a desired or acceptable state.