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Management & Strategies & Barriers

Constantinos Markides suggests that while new firms have an advantage over existing companies at introducing strategic innovation to the market, existing companies can, indeed must, find ways to do so in order to survive and succeed in the longterm (1998, p. 31). Doing so requires that companies find ways to overcome significant barriers to strategic innovation within existing companies, and Markides offers strategies for doing so.

Markides finds that all companies must answer three fundamental questions: who is the customer? what products or services should be provided? how can the company market these products at a profit? (1998, p. 32). As an industry matures, these questions are answered in similar fashion by increased numbers of companies, some of which are able to operate profitably and others of which fall by the wayside.

Strategic innovation occurs when a company finds new ways to answer these questions and is able to exploit a market niche (or even a new market) which previously did not exist. Because of the risk involved (new market strategies do not guarantee the same revenue stream that an existing strategy does), few existing companies are able to take on the role of strategic innovator successfully. Instead, we associate strategic innovation with new companies characterized by an entrepreneurial spirit. In this way, Dell Computers built a market by selling directly to the consumer rather than through dealers, and the Body Shop found a market in cosmetics that are environmentally friendly.

It is the exceptions to this trend that Markides cites as demonstrating the necessity for strategic innovation among existing firms. Kresge, for example, transformed itself from a variety store chain into the largest discount store chain in the United States and Intel, now clearly identified with microprocessor chips, originally manufactured computer memory. These companies were successful because they were able to mo...

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Management & Strategies & Barriers. (1969, December 31). In LotsofEssays.com. Retrieved 04:13, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1695220.html