Three Revolutionary Sources of Business Upheaval and the New Business Strategy

Seminar paper from the year 2003 in the subject Business economics - Business Management, Corporate Governance, grade: 2,0, University of Northampton, language: English, abstract: Demos, Chung and Beck stated in their paper ' The New Strategy and Why It Is New' (2001) that the traditional approach of strategy to create and protect long-term defensible competitive advantage in the marketplace no longer holds in the new millennium. Their arguments were based on three revolutionary sources of business upheaval: 1) New and disruptive technologies; 2) Deregulation and globalization; 3) Capital markets. These revolutionary changes in global and sectoral economies have converted the traditional linear value chain into a 'three-dimensional value constellation', 'where both threats and opportunities can arise more easily in almost any one of a firm's competencies or capabilities'. To solve this problem, traditional ways of developing strategies must be changed. They further pointed out the way out in the changing environment that 'traditional strategies aimed only at shaping and protecting long-term positions need to be supplanted by a focus on continuous transformation, to forge capabilities required to win the next game ...' This paper agrees on this point of view and will combine this new strategic thinking with practice by analysing two worldwide successful multinationals: IKEA and Canon, to demonstrate how the new strategy functions and determines companies' success in the new millennium.