Define an effective resource strategy
Make or buy? This question is central to strategic analysis. Yet, the way it is formulated is outdated: today, it is often more effective to borrow resources. What are the recipes to succeed at this strategy?
Business strategies fail for two main reasons. The first—poor execution—is certainly no secret. The second occurs frequently but continues to be largely underestimated, namely, the failure of companies to think sufficiently about how they will procure the resources required to execute the strategy. The publications analyzed here cover this latter issue.
Most companies are satisfied to reproduce what has worked in the past. The Axel Springer press group, for example, had this reflex at the dawn of the Internet era. Accustomed to relying on home-grown skills to meet changing needs, the group began to invest in developing the digital competencies of its in-house journalists and marketing teams. However, executives soon realized that they were rapidly falling behind other market players. Only once the strategy was completely revisited and the company stated to acquire Internet start-ups on a massive scale did it manage to import the resources needed to survive in the digital revolution.
Conversely, the acquisition strategy conducted by Compaq in the late nineties precipitated its decline until it was finally acquired by Hewlett-Packard in 2002. Compaq, then one of the PC market leaders, was under great pressure, specifically from Dell. Taking inspiration from IBM’s strategy, Compaq decided to buy Tandem Computers, a high-end professional computer manufacturer, and the following year, Digital Equipment Corporation (DEC), the mini-computer market leader. These decisions were unfortunate, because Compaq lacked the skills required to integrate the newly acquired resources and found itself considerably weakened as a result.
What is more, too many companies have an excessively black-and-white vision of their resource strategy, i.e., they think they must choose between developing their resources organically and acquiring them from other sources. However, underline the authors of Build, Borrow or Buy, the most effective companies are precisely those which combine different approaches—organic development, acquisitions and resources borrowed from alliance partners or simply accessed on a contractual basis. How can one optimize these choices?
In this synopsis:
- Obtain the resources required to grow: A strategic choice
- Partnerships and alliances: Key success factors
- Learn to give up resources you no longer need
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