Assessing Your Strategic Alternatives From Both A Market Position And Core Competence Perspective

Assessing your strategic alternatives from both a market position and core competence perspective

The Authors
Brian Leavy, Brian Leavy is AIB Professor of Strategic Management and former dean at Dublin City University Business School (brian.leavy@dcu.ie). His research is focused on strategic leadership, competitive analysis and supply chain strategy. The author of more than 40 articles on these topics, he has also published three books: Strategy and Leadership (co-authored with David Wilson, Routledge, 1994), Strategy and General Management (co-edited with James S. Walsh, Oaktree Press, 1995), and Key Processes in Strategy (International Thomson, 1996 and reprinted in 2001).

Abstract
The practice of strategic decision-making has two major perspectives to help managers create and maintain competitive advantage in the face of a range of business challenges. One stresses market position and the other core competence. (1) Market position – the positioning approach to strategy development is associated mainly with the work of Michael Porter; strategic choice is focused primarily on the structure of the industry and how it might be shaped to advantage. The aim is to establish a “privileged”/hard-to-replicate position in an industry that is difficult to enter. (2) Core competence – the competence-led perspective is associated with the work of C.K. Prahalad and Gary Hamel; strategic choice focuses primarily on assessing which distinctive competences should be built, then considers the market opportunities that would exploit them best. It may be tempting to use one approach or the other because the market position and core competence approaches do create perspectives that see things very differently, and their analytical methodologies offer different guidance. But instead of picking one over the other, the astute strategist may be best served to test out both perspectives and generate a wider range of options. This is shown in the article’s illustrations of...