Business Results - Revolution

Business Strategy - Four Schools of Thought

Extracts from article “The Right to Win” by Cesare Mainardi and Art Kleiner with Booz & Company.

Business Strategy Became Formal Focus in 1960

Business strategy did not really become a formal focus until 1960.  It really grew as  a discipline from the 1970s – in large part due to increased economic turbulence and a need to improve and change.

Improvements in strategic thinking contributed significantly to business success.   However,  there have also been a large number of fleeting fads during the last 50 years that contributed to  business failures.

The most important question to ask yourself is, ”Does our business strategy give us the right to win?”  The answer is not in continually looking for and adopting new theories in hopes of finding the quick solution to success.   The right approach is to develop your own method that focuses on building the underlying capabilities of your business.

There are four schools or camps of thought pertaining to business strategy. Each perspective offers something significant, so long as they are adopted in an appropriately balanced way.

  1. Position: The camp suggests that winning businesses are the ones that find and focus on the most favorable markets as defined by external forces. These winners exploit a competitive advantage
  2. Concentration: According to this school, the winners focus on their core competencies and don’t dilute themselves.
  3. Execution: This camp advocates that winners gain competitive advantage through operational excellence.
  4. Adaptation: According to adaption advocates, today’s winners act quickly and creatively in response to events.

Position School - Business Strategy

The major authors contributing to the position school of strategic thinking include:

    • Bruce Henderson Essays, 1966
    • Kenneth Andres, The Concept of Corporate Strategy, 1971
    • Michael Porter, Competitive Strategy, 1980
    • W. Chan Kim & Renee Mauborgne, Blue Ocean Strategy, 2005

Concentration School - Business Strategy

The authors contributing most significantly to the concentration school of strategic thinking include:

  • Gary Harnet & C.K. Prahalad, Competing for the Future, 1994
  • Chris Zook, Profit from the Core, 2001
  • Execution School - Business Strategy

    Key authors that made significant contributions to the execution model of business strategy are:

      • W. Edwards Deming, Out of the Crisis, 1986
      • Ram Charan & Larry Bossidy, Execution, 2002
      • William Abernathy & Robert Hayes, “Managing Our Way to Economic Decline,” 1980
      • Michael Hammer & James Champy, Reengineering the Corporation, 1993

    Adaption School - Business Strategy

    Key authors that made important contributions to the adaption framework of strategic thinking are:

      • Tom Peters & Robert Waterman, In Search of Excellence, 1982
      • Henry Mitzberg, The Rise and Fall of Strategic Planning, 1994

    Articles on Strategy Approaches

    Business Strategy - Four Schools of Thought

    By David Willden