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Flouting Conventional Wisdom
INSEAD scholars W. Chan Kim and Renée Mauborgne say the key to success isn’t about your company or industry. It’s about smart strategic moves.
BY DES DEARLOVE & STUART CRAINER
Chief executives in search of strategic inspiration traditionally have had two alternatives. They start with either their industry or their company as the basic building block. The former leads them into the familiar if cold embrace of Michael Porter’s Five Forces framework, which posits that different industries can sustain different levels of profitability; the latter nuzzles them seductively towards Gary Hamel and C.K. Prahalad’s core competencies of companies.
Over the past two decades, a great deal of intellectual energy has been expended on refining these two worldviews. But according to two leading Europe-based academics, an intellectual irony underlies both. “There’s no such thing as a permanently great company or a permanently great industry. All industries rise and fall as do companies,” say W. Chan Kim and Renée Mauborgne. “However, there are permanently smart strategic moves.”
Kim and Mauborgne are based at INSEAD, the elite business school situated in the beautiful forest of Fontainebleau, just south of Paris. They are methodical people, not prone to hysterical outbursts or wild hypotheses. Their work, characterized by rigorous research and attention to detail, is supported by a substantial database—one that extends all the way back to 1850. As scholars, they are also patient. Some thought leaders of their standing would be on their second or third book. Kim and Mauborgne are currently wrapping up their first. When it does finally see the light of day—probably in 2004—it will be the culmination of more than a decade of work.
In the quiet of Fontainebleau, the Korean and American are preparing their challenge to the strategy hegemony. They want to be sure their theories stand up—that they cannot be dismissed as a passing fad. Stretching their...
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