Reference no: EM132204842

Shana Corp.

Shana Corp. was a small, new software company. Some of its product development efforts, combined with a few technologically related contracts, had allowed the firm, over several years, to develop a budding expertise. At first, Shana's skills were not much different from most of its rivals'. But because of the kinds of jobs it had worked on (jobs richer rivals had refused), Shana was acquiring an ability to develop advanced forms-completion software that could run on different computer operating systems. After a while, Shana's top managers gradually came to realize that their firm had learned to skillfully and cheaply do jobs that rivals could not do as well or as efficiently. Also, some affinities began to occur among software developers as each began, quite naturally, to specialize according to talent and build on one another's strengths. Work complementarities grew up as a loosely coupled group became an integrated and effective team. And so Shana kept getting better in their increasingly focused sphere. Soon, Shana's managers began to develop routines, procedures, and incentive policies to further improve team performance. They also started using Shana's growing body of specialized knowledge to concentrate on clients that required its special abilities. The convergence around certain skills and a target market also focused selection and training programs, project management protocols, and marketing campaigns. Shana had not set out to master a special capability. Nor did it prospect intentionally for promising market niches. And the company did not at first possess valuable property or knowledge resources that were unavailable to rivals (they too could have tried to develop forms software to bridge operating systems but decided this was not worth the effort). Rather Shana's managers noticed retrospectively what their firm was becoming especially good at, realized from talking with clients that the talents were rare, tough to match, and worth developing, and pursued clients that would value these talents. The firm, moreover, did not set out to copy the skills of successful rivals. It did not have the wherewithal to accomplish that. Moreover, even if Shana had been able to develop those skills, by the time it did its competitors, most probably, would have moved ahead. Shana's managers realized that emulation would surrender to rivals' product and market leadership, and force the firm to share a market with many other firms.

Adapted from Miller D. 2003. An asymmetry-based view of advantage: Toward an attainable sustainability Strategic Management Journal, 24: 961-976. Why is this exercise important? The “team” identified in this case is an intangible resource, something we will study in Chapter Four. Moreover, the kinds of jobs it worked on (jobs richer rivals refused) constitute an opportunity in the firm’s environment. We will study the firm’s environment in Chapter Three. And the upshot here is whether, during the planning process (Chapter Two), managers are able to correctly assess their own resources and capabilities. This turns out to be a difficult skill to master. I won’t be asking you these questions in this homework assignment because we haven’t covered the material in class yet. But I did think that it would be good to elaborate them here so that you might be able to see the future course we will be taking and to understand it better as, by the end of the first half of the course, you will be expected to know each of these components and how to put them together.

Homework Question: Q: Your text claims that the evolving nature of a company’s strategy means that the typical company strategy is a blend of

(1) proactive (deliberate) moves to improve the company’s financial performance and secure a competitive edge and

(2) adaptive (emergent) reactions to unanticipated developments and fresh market conditions.

Is the Shana Corp. strategy deliberate, emergent, both, or neither? Please explain. (What in the case indicates the presence or absence of a deliberate and/or emergent strategy?)