 Sloan Management Review
Issue Date: Spring 1999, 40:3
Pages: 41-53
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Strategy, Value Innovation, and the Knowledge
Economy
W. Chan Kim and
Renée Mauborgne
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For the last twenty
years, competition has occupied the center of strategic thinking.
Indeed, one hardly speaks of strategy without drawing on the vocabulary of
competition - competitive strategy, competitive benchmarking, competitive
advantages, outperforming the competition. In fact, almost all of
the strategic prescriptions that have been put forth only redefine the
ways in which companies build advantages over the competition.
Building advantages over the competition has been the strategic objective
of many firms. Nothing is wrong with this strategic objective in
itself. In the end, a company should have some advantages over the
competition to sustain in the market. When asked to build
competitive advantage, however, managers typically assess what competitors
do, and strive to do it better. Their strategic thinking thus
regresses toward the competition. In the end, companies expend
tremendous effort but often achieve no more than incremental improvement -
imitation, not innovation. Strategy driven by the competition can be
detrimental as it often induces companies into a trap of continuous
competitive improvement over one another, making them play a zero-sum game
within their existing markets. To achieve sustained profitable
growth, companies need to break out of the trap of competing and
imitation. Rather than striving to match or outperform the
competition, companies should strive for value innovation. Emphasis
on value places the buyer, not the competition, at the center of strategic
thinking; emphasis on innovation pushes managers to pursue beyond
improvements to totally new ways of doing things.
Sloan Management Review
Issue Date: Spring 1993, 34:3
Pages: 11-27
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Making Global Strategies
Work
W. Chan Kim and
Renée Mauborgne
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What most motivates the top managers of
multinational subsidiaries to execute the global strategies formulated at
headquarters? Is it compensation, monitoring systems, or the
magnitude and precision of rewards and punishment? It is none of
these, argue the authors. Subsidiary top managers are most concerned that
the global strategic decision-making process employs due process.
That is, they want an open process that is consistent and fair and that
allows for their input. The authors describe their research on this
subject and urge companies to pay more attention to how they make
strategic decisions.
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W. Chan Kim is The Boston Consulting Group Bruce D. Henderson
Chair Professor of International Management at INSEAD,
France.
Renée Mauborgne is The INSEAD Distinguished
Fellow and a professor of strategy and management at INSEAD, and a Fellow of the World Economic Forum. 
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