Critical discussion of “How Strategy shapes Structure” of Kim C. W and Mauborgne M. Apart from the conventional way of thinking, planning and acting in the context of forming structuralist strategies, the authors have portrayed a comparative analysis between the latter and reconstructionist strategies which actually shift from either low cost or differentiation dilemma to both cost and differentiation management.
In turbulent times, strategy overall should be adaptive and flexible or – as frequently characterized in operations management and logistics language – WIP (work in progress), therefore no single strategy approach is a lifelong solution. Competition does not concern firms per se but supply chains since suppliers and customers do not maintain a sole, linear relationship with the company of interest.
Supply chains worldwide are choosing to adopt structuralist strategies which are not necessarily risk-averse, however they tend to be mostly reactive and benchmarking-based aiming to confirm the theory of institutional isomorphism (Zhu et al, 2007). In order to assess blue oceans, it would be interesting to monitor red oceans which are actually the prerequisite for supply chains nowadays to think moving towards blue oceans.
Despite Porter’s statement in the late 90s concerning markets’ tendency to overlook the significance of small and niche markets (Srinivasan, 2009), at present there is the evident existence of perfect competition, excess supply and moderate demand therefore niche markets are likely to be smoothed away (Kim et al, 2005).
Innovative business models such as supply chains based on network marketing, MLM and direct sales practices such as LR, NWA and AVON or green supply chains such as Dell, IBM, Toyota, Hewlett Packard and Tesco have found themselves being successful due to the affiliation of value, profit and people proposition even if some of them were not reconstructionists from the very beginning.
Besides corporations and US based supply chains there is slight or no reference to SMEs that are broadly recognized and pursue new opportunities with such high chances of attaining the three propositions at the same time. The Balkan region which is broadly characterized by restricted industrial engagement, political and economic instability and relatively limited financial resources is rather grouped to the environments that favour a structuralist approach although significant technological development as well as progress in terms of infrastructure is noticeable.
Europe has first lost its interest, Eastern Europe came next since differentiation could occur but low-cost was gradually smoothed away. International business claims that it is time for the BRICs (Brazil, India, China) in order to distract competitors’ attention and in order to take advantage of natural resources while at the same time those regions are the lands of the very rich and the very poor.