strategic dynamics

(Source: Burgelman, 2007) Strategic dynamics describes the nature of change affecting a company. When the industry players, including the focal company, are ""playing by the rules"", the industry is stable and the change is fairly linear and predictable. Rule-changing strategic actions, on the other hand, are multiplicative and produce strategic dynamics that are nonlinear and more difficult to predict. This leads to four possible states for a company to deal with, each with its particular challenges.

A framework of strategic dynamics

• stable industry structure -- the strategic actions of both the focal company and the environment, which includes the traditional industry players, other industries, and emerging segments are all rule-abiding, i.e. not changing the rules of the industry.
• independent industry change -- the strategic actions of the environment are rule-changing while those of the focal company are rule-abiding
• controlled industry change -- the strategic actions of the focal company are rule-changing while the environment is rule-abiding
• runaway industry change -- the strategic actions of the focal company and the environment are both rule-changing

Matching induced and autonomous processes to strategic dynamics situations --

• stable industry structure --
• induced strategy process -- serves to exploit core business opportunities
• autonomous strategy process -- serves to explore potential new growth opportunities
• independent industry change --
• induced strategy process -- serves to retreat orderly fro core business
• autonomous strategy process -- key: serves to develop new opportunities consistent with distinctive competence in advance of threats to current ones
• controlled industry change --
• induced strategy process -- key: serves to exploit new major opportunities through 'vectoring' the organization in the new strategic direction
• autonomous strategy process -- serves to continue to explore potential new future growth opportunities
• runaway industry change (uncertainty) --
• induced strategy process -- 1) key: serves to align the organization behind a 'safe bet' or 'bet the company' strategic direction, or 2) serves to maintain alignment during 'wait to bet' decision.
• autonomous strategy process -- 1) serves to reduce uncertainty of new possible strategic directions before betting on one, or 2) key: serves to continue to experiment with new opportunities while waiting to bet.