Creating Corporate Advantage
by David J. Collis, Cynthia A. Montgomery

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Book Review: Great overview on corporate strategies
Summary: 4 Stars

In this article the authors summarize their findings of 6-year research into 50 companies which were aiming to create successful corporate strategies. The authors found that an outstanding corporate strategy is a carefully constructed system of interdependent parts, in which the firm's resources are the unifying thread. These resources range along a continuum, from highly specialized to very general. The authors describe the impact of the resource continuum on the scope of businesses firms should compete in, the coordination mechanisms, control systems, and corporate office size. Following the case studies of diversified manufacturer Newell, consumer-electronics giant Sharp, and conglomerate Tyco, the authors explain that there is no one right strategy for all companies. "There is no best prescription for all multibusiness corporations. What prevails instead is the logic of internally consistent corporate strategies tailored to a firm's resources and opportunities." But the authors also issue an warning: "The fact that there are potentially an unlimited variety of effective corporate strategies does not mean that most corporate strategies are effective." The authors' resource continuum and the range of strategies provide a useful starting point for checking corporate strategies. The acid test for any corporate strategy is: "The company's businesses must not be worth more to another owner."

Nice article on the subject of corporate strategy. Although it does not present many new insights, it provides a great overview into existing knowledge of corporate strategies. In this sense their resource continuum is extremely useful. And although the authors have strong academical backgrounds, the article makes great use of the case studies provided. Highly recommended to people working in diversified organizations and MBA-students. The authors use simple business US-English. I also recommend Michael Porter's 1987-article 'From Competitive Advantage to Corporate Strategy'.

Summary of Creating Corporate Advantage

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