Blog #2 Internal Organizational Analysis and Developing Strategic Options

In today’s world, companies need to have a clear strategy in order to survive. Many companies today happen to have multiple strategies at the same time, based on different philosophies. This leads to incoherence according to the “The Coherence Premium” by Paul Leinwand and Cesare Mainardi. Companies should have some very basic questions answered that include; who they are going to be, how are they going to differentiate themselves, and how they are going to win.

One of the things I was thinking through after reading this article was about the changing times and how a company that might have achieved coherence may slide back to being incoherent in the future, how will a company always remain coherent? Markets are changing and technology is changing, if a company has an advantage today, how is it going to keep it tomorrow? After giving it some thought, I believe that by understanding the company’s coherence and what makes it great and distinct, they will be much better prepared to move as the market does, and also think about how that capability may apply to many new product categories.

Choosing the right strategy to move forward plays such an important part for a company. It is also mentioned in the article “Seven Ways to Fail Big” by Paul Carrol and Chunka Mui that the root cause of failure is not failing the execution but choosing the wrong strategy. The article carries on with listing the seven ways to fail, starting with the synergy mirage. When a company joins forces with another company, and they seem to have complementary strengths but turns out not all aspects have been considered and more problems have risen than before. Another reason for failure is faulty financial engineering; mistakes happen, but in this case, there would be brands and entire businesses at stake. Companies need to make sure they have enough time to double, triple check from multiple perspectives in order not to end up in a situation like this. Continuing with another way to fail, the article mentions stubbornly staying the course, meaning that even though the market is changing, the strategy is not, and this can lead to a disaster. Another failure reason, that has worked in some cases, is pseudo-adjacencies, where expansions on core organizational strengths are attempted. Sometimes the companies don’t consider that because customers buy one thing, they will buy the other as well.

In today’s technology-driven world, many companies are inspired by the rewards of having a new breakthrough product. In this case, according to the article, strategies were usually ill-conceived from the start, and companies would go to great lengths to deceive themselves on this breakthrough product. The article continues with two more reasons for failing that have some common ground, rushing to consolidate and roll-ups of almost any kind. Things need to be looked at from multiple perspectives and there are so many factors to be considered, for example, if the customers will remain loyal to the possibly new company name.

In conclusion when developing the strategic options of a company, multiple analyses are required, as well as cohesiveness and avoidance of the seven aforementioned reasons for failure.