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Foundations of Corporate Success

How Business Strategies Add Value

John Kay

Publisher: Oxford University, 2001 , 416 pages

ISBN: 0-19-828781-X

Keywords: Strategy

Synopsis:

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Corporate success derives from a competitive advantage, which is based on distinctive capabilities. Competitive advantage relates to the unique character of a firm's relationship with its suppliers, customers, or employees, which must be precisely identified and applied to the relevant markets. Distinctive capabilities as sources of competitive advantage can be separated into four broad categories.Architecture refers to a network of relationships or implicit contracts within or around the firm. It adds value by helping to create organizational knowledge and routines, which enable the company to respond flexibly to changing circumstances and allow easy exchanges of information. Reputation is the main commercial mechanism for conveying information to consumers. By protecting and exploiting innovation, the company can derive competitive advantage, if it can appropriate the gains associated with it. A final potential source of competitive advantage not based on the distinctive capabilities of firms is a strategic asset that includes government-mandated monopolies or other features of market structure, which restrict market access by competitors.Firms that enjoy distinctive capabilities must seek to transform them into competitive advantages. To achieve this, distinctive capabilities must be sustainable and their benefits must be appropriated through corporate and competitive strategies. Corporate strategy is concerned with the businesses the firm is in, competitive strategy with its relationship with other firms in the businesses it chooses. In each case, the key measure of corporate success is the ability of the firm to add value to the resources it uses.

What distinguishes the successful firm is the fundamental question in business strategy, and one the most senior managers consistently ask themselves. In Foundations of Corporate Success, John Kay argues that outstanding businesses derive their strength from a distinctive structure of relationships with employees, customers, and suppliers. He explains why continuity and stability in these relationships is essential for a flexible and co-operative response to change. This book has been hailed as a landmark in our understanding of business strategy and is widely used on courses throughout the world.

Table of Contents:

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  • Part I Corporate Success
    1. The Structure of Strategy
    2. Adding Value
  • Part II Business Relationships
    1. Co-operation and Co-ordination
    2. 4. Relationships and Contracts
  • Part III Distinctive Capabilities
    1. Architecture
    2. Reputation
    3. Innovation
    4. Strategic Assets
  • Part IV From Distinctive Capabilities to Competitive Advantage
    1. Markets
    2. Mergers
    3. Sustainability
    4. Appropriability
    5. The Value of Competitive Advantage
    • Appendix: Added Value Statements
  • Part V Competitive Strategies
    1. Pricing and Positioning, 1
    2. Pricing and Positioning, 2
    3. Advertising and Branding
    4. Vertical Relationships
  • Part VI The Strategic Audit
    1. The Industry
    2. The Firm
    3. The Nation
  • Part VII The Future of Strategy
    1. A Brief History of Business Strategy
    2. Conclusions

Reviews:

Foundations of Corporate Success

by Roland Buresund last modified 2009-02-01 02:53

Rating: ********** (Excellent)

A must read together with Porter's work. Not as well known, but even more important.

Whatever you do, do not miss it.


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