some might remember US author Richard A. D’Aveni, a professor of strategic management, for his ideas about ‘Hypercompetition’. long, long ago are the days of the ‘new economy’ ;-)
in the summer issue of the MIT Sloan Management Review he wrote an article about what he calls ‘Corporate Spheres of Influence’. I find his approach quite helpful since it puts strategic actions into another perspective. while companies usually assess their markets based on resources (internal view) or market analysis (external view) D’Aveni looks at the different spheres/areas where a company has or could have its stakes in. by evaluating these areas of (possible) influence companies can use market/external forces for their own benefit.
even though the article is mainlydrawing on examples from global players like Microsoft, Procter & Gamble, Johnson & Johnson, Anheuser-Busch, Nokia and Harley-Davidson the core idea of assessing a company’s areas of influence can be used for smaller companies as well. for the designmanagement profession the approach/model can be useful on two levels: first to assess the designmanagement consultancy’s scope of business and secondly (and most importantly) to understand the client’s business in a more comprehensive way.
unfortunately the article can’t be downloaded for free. however the MITSloan website offers executive summaries and purchasing options. here’s the exec summary:
“Traditional models for developing and managing corporate portfolios are based on financial frameworks, business synergies or leveraging core competencies into related businesses. In this article, the author goes beyond those traditional approaches and offers an alternative — the corporate sphere of influence. Like nations, says the author, companies build spheres of influence that protect their cores, project their power outward to weaken rivals and prepare the way for future moves. By recognizing the strategic purpose of each part of the portfolio, the sphere of influence model focuses attention on the company’s overall strategy, including how it wants to structure the division of product and geographic markets in an industry, which threats it will address or ignore, and how the company’s portfolio enhances or detracts from its competitive or alliance strategy.
Thinking in terms of building a sphere of influence forces managers to draw together corporate- and business-level strategic analyses that are often treated as separate. The corporate-level concern about where to fight and the business-level concern about with whom and how to fight are brought together into a coherent view.
In this article, the author defines the components of a sphere of influence and explains how senior executives can use his framework to assess their company’s current sphere and map their desired one. Then he offers examples of how companies have managed their spheres.”
