Position Paper on the Business Strategy
Developing the business strategy, it is necessary to encounter current environment and economic conditions. Due to the rapid globalization of the world’s economy and the scientific revolution world’s businesses, and American business is not an exclusion, can no longer rely on the strategies that proved to be successful over the past decades. Business has to meet the challenge it is exposed to by technological and globalization changes. It led to the evolution of strategic thinking that underwent a shift from the industrial economic to a resource-based strategy and to the human and intellectual capital strategy.
The strategic tools used in industrial economies involve industry analysis, competitor analysis, segmentation, positioning, and strategic planning. The industrial economics sought to capture economic value instead of creating it. The resource-based strategy emerged as the reaction to the changes caused by technology revolution and globalization. It encounters current economic perspectives and is focused on the development of the new core capabilities that would enable businesses to transcend the limits of the traditional business unit. It bases on the knowledge-based economics and aims at the creation of the economic value.Taking into account the aforementioned changes in the global economy, it is possible to suggest that the resource-based strategy can help American businesses meet the demands of global markets and gain the competitive advantage. The resource-based view involves the elements of the three key economic traditions: SCP-based theories regarding industry determinants of the performance of the firms, evolutionary economics, and neoclassical microeconomics (Barney, 2001).
According to the Beige Book report on American economic conditions, the national economic activity continues the tendency to expand. The overall economic results remain positive with an increased spending in the field of non-financial services. American businesses going global have to meet the requirements and demands of the international market. American multinationals, as well as national companies, are showing the increasing interest in the knowledge-based perspective on the strategy. De Klyuver mentions that currently American businesses tend to perceive knowledge and human and intellectual capital as the significant strategic resource which makes them shift the focus from the financial and physical resources to knowledge and the right people, the absence of which may eventually become the limiting factor. The resource-based strategy recognized the diversity of the firms and envisages the heterogeneity of resources.
One of the advantages of the resource-based strategy is that it can define the areas of business in which the company can compete through turning the distinctive competence into the competitive advantage (Montgomery, 2011). The resource-based view on the multi-line firms helps to explain its growth and development through extant resource base.However, despite the aforementioned advantages of using the resource-based strategy, it also has some negative effects that need to be tackled. The resource-based view although promising the competitive advantage has little practical implications, which makes the strategy rather difficult to implement for the American businesses. Resource-based strategy acts merely as a framework for the development than an actual guideline …