Modern Competitive Strategy

Here the advantage is firm-specific. Firms integrate their activities across countries to achieve lower costs through economies of scale or scope.

The attractiveness of vertical integration over buying from a supplier increases under two conditions: uncertainty and asset specialization.

Core competence implies both a technology platform shared by existing businesses and the ability to leverage the platform to develop new businesses.

Similarly, a firm’s dominant cost position, controlling for value, may be due to • Economies of scale in one or more activities, such as operations, procurement, or technology development. • Economies of scope from products sold across multiple markets. • The diffusion of superior practices from the home country to satellite units in regional marke

Motivations behind Partnerships These seven trends have increased the salience of partnering. In addition to lowering the costs or risks associated with an activity, a partnership offers the firm some control over the supply or coinvestment relationship that would not be available in a market contract. What do firms want to control? What are the st

A unique activity that does not contribute to the firm’s value and cost drivers makes no strategic contribution.

Activities are consistent when they are jointly in tune with the firm’s strategy, even if they don’t reinforce each other directly. A high level of consistency or fit implies that the firm’s policies and practices are aligned together with its market position.

Execution must always be tied to the firm’s value and cost drivers.