Activity: Strategy as Long Term Intent and Systemic Optimization
After Apple Inc., released its iPhone in 2007, Google had a decision to make. Should it try to make a phone that would compete directly? If not, what should it do?
The situation Google found itself in is not unique. Companies in every industry have to respond to their competition. Far too often, the response does not serve a greater, long-term goal. Companies often act reflexively and mimic their competitors. They attempt to do the same thing, yet they hope for better results. However, successful companies will have a strategy in place that guides responses to competitors. While Google may have had the resources to manufacture a great smartphone to compete with Apple, the company believed this did not align with its overall long-term strategy. Instead, Google chose to design Android, the software that other smartphone manufacturers could use as they competed for market share with Apple's phone. Now, almost every smartphone, with the exception of the iPhone, uses Google's Android to power its operating system. Google therefore competes indirectly with Apple, and drives users to Google's core strength: its search platform.
Google's response to the iPhone is a demonstration of what Hamel and Prahalad (2005) refer to as ‘strategic intent.' The response did not merely react to the competition; the response successfully supported a strong, long-term goal with a logical strategy for reaching that goal and one which forced the company to expand beyond its current skills, competencies and capabilities.
To prepare for this Shared Activity:
- Review the Readings.
- Then consider how strategic intent can lead to sustainable competitive advantage.
- Find one example of an organisation that clearly has an articulated strategic intent and long-term posture towards innovation and capability expansion.
- Find one example of an organisation that clearly does not have an articulated strategic intent and long-term posture towards innovation and capability expansion.
To complete this Shared Activity:
- Conduct a thorough and well-argued analysis that provides evidence that one of your chosen companies does have a strong strategic-intent posture.
o Be sure to explain the strategic implications of your analysis and speculate on what this strong strategic intent posture could bring to the organisation in terms of future strategic direction and choices.
- Conduct a thorough and well-argued analysis that provides evidence that one of your chosen companies does not have a strong strategic-intent posture.
o Be sure to explain the strategic implications of your analysis and speculate on what this lack of strategic-intent posture could mean to the organisation in terms of future strategic directions and choices.