Wednesday, February 3, 2010
Impact of history on business
Our civilization has a huge history of conflicts. These conflicts have impacted our patterns of thinking in a huge way. For instance most theories of Strategic management are driven out of wars. Some people define strategy as the bottom-line behind actions of a firm to gain competitive advantage. However with globalization in most business scenarios today, defining competition for a firm itself is a huge task. This makes it very difficult to employ strategies which are driven by competition. Therefore the new era is era of blue-ocean strategies or developmental strategies. There is also a huge discussion going on these days about Cooperative strategies. Today only companies which are able to innovate and develop new businesses are able to create huge profits. If you take a list of fortune 500 companies and consider their growth rate on the basis of revenues, you can easily see that top 10 companies are the ones who are innovating very fast. The point that I am drive forward is that our history has impacted our patterns of thinking to a very large extent. Had it not been so, the business practices could have been very different from what they today are. So in this world of differentiation, a good strategy is to start with out any frame work or preconceived plan of action. Thinking afresh will help to be succeed in business today. You can see Google has done just that !!