Examples of perseverance in corporate strategy

Thoughts on corporate strategy in the era of network economy

This article takes the network economy as the strategic background and corporate strategy as the research object, discusses the levels of corporate strategy, and points out the importance of corporate strategy in the network economy The nature is rising from an action mode of allocating resources to a system capability of the enterprise.

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1. Looking at the network economy from the perspective of strategic changes in mobile phone manufacturers

(1) The launch of the Swedish Ericsson Company, one of the global mobile phone manufacturers The company has implemented the mobile phone outsourcing strategy of the "Profit Recovery Plan" and stopped Ericsson mobile phone production operations outside of China. The company only implements strategic management of Ericsson's core mobile phone business. This strategy of Ericsson marks the multinational company's timely response strategy to the phenomenon of network economy.

With the rapid development of computers, information and communication technology (CIT), especially Internet technology, the global economy has not only entered a state of globalization, but also due to the support of the above-mentioned technological progress, production factors are changing. Presented to the world as a new economic form. People generally refer to this economic form based on the application of information or knowledge as the new economy. In the new economy, this kind of economic activity based on CIT and its network is called network economy. Because this type of technology reflects the unprecedented dependence and interdependence of economic entities on styles, it makes almost every corner of the world The behavior of economic entities tends to be intangibly rather than tangiblely unified.

It must be said that how enterprises respond to this economic form and carry out corresponding strategic innovation is an unavoidable issue. It is the key consideration for us to formulate strategies for enterprises in the network economy era.

(2) Talk about corporate strategy under traditional economic conditions

Under traditional economic conditions, corporate strategy is an action plan for enterprises to integrate internal and external resources and form asset capabilities. Its goal is to create long-term, future strategic option value for the enterprise, which is the core basis for the continuation of the enterprise's competitive advantage. From the perspective of the mechanism of value creation, corporate strategy is not only the result of corporate institutional arrangements, but also the product of corporate internal organization. It is also the influence of internal and external technology and the related consequences of decision-making cognition. System, organization, technology and cognition can be regarded to a large extent as the basic framework that constitutes the value creation of enterprise strategy.

The value creation of corporate strategy under traditional economic conditions is typically reflected in the academic thought of American strategic management scientist Mike Porter. The application of corporate strategy is to obtain value that exceeds competitors. competitive advantage. In other words, the highest goal of a company's competitive strategy is to create a gap in the company's stock of material resources; competitive advantage is actually the value of material resources based on artificial barriers. In addition, another place where Peter's general strategic thinking reflects the material economy is the view of corporate competition based on this competitive strategy. Porter always believed that the essential performance of enterprises in the market is the cruel fact of competition. Competition is the process in which market participants find ways to obtain resources and form barriers to entry.

Therefore, corporate strategy under the traditional economy is a material cost strategy driven by diminishing returns, and is the product of the experience level of the strategic decision-making group within the enterprise. Among them, integration strategy is the strategic preference for enterprises to gain competitive advantages. It includes internal integration (independent development) strategy and external integration strategy, including horizontal integration and vertical integration based on mergers and acquisitions. In other words, corporate strategies governed by the law of diminishing returns usually pursue scale advantages, and a company's competitive advantage is formed by "possessing" the abundance of material resources.

(3) The era of network economy is relative to the traditional material economy.

In summary, the basis of the material economy is based on the possession of resources, with improving the input-output efficiency of resources as the basic goal of enterprises engaged in production activities.

Since the basic organizational unit of material resources is the atom, it is a production factor with material loss in economic analysis, and the output efficiency of economic activities follows the law of diminishing returns, that is, production The increase in output decreases with the increase in input factors. The economic law of diminishing returns directly affects the decision-making behavior of enterprises as industrial organizations.

It is not difficult to see that the material economy is essentially a resource-constrained economic form. How to eliminate the bottleneck effect of this resource has become the strategic starting point of the enterprise. Therefore, the competitive advantage of an enterprise is mainly manifested in the end product market in which the enterprise operates through the direct ownership of natural resource-based production factors.

The network economy is a new economic form based on the utilization of information and information technology networks. Due to the causal relationship between information and knowledge in nature, the network economy is also an information economy and a knowledge economy. Network economic activities use "open" information to enable economic entities to obtain the risk probabilities of the market environment provided by the information to realize value. In other words, if network economic activities cannot effectively make the supplied information or codifiable knowledge recognized by customers, Then the value of such economic activity cannot be realized. In other words, the higher the "openness" of such information, the greater the value of the economic activities supported by the information. For market organizations, any form of direct communication will be possible.

Since the basic unit of information is bits, the factor input-output results of the network economy do not conform to the loss attributes of factor inputs in the traditional economy. This leads to the fact that if economic activities in the network economy are mainly based on information and its network. The difference between it and the traditional economy is that the role of knowledge in economic development is greatly enhanced. The resurgence of the Internet in the 1990s proved the results of this economic theoretical analysis. Computer software companies, Internet network providers, and telecommunications companies that process information on a large scale and utilize information networks are typical market organizations that achieve output with increasing returns.

So we can see that the essence of the network economy is to provide institutional supply based on interdependence to economic entities. "One move affects the whole" is a unique phenomenon in the networked market. How to coordinate this interdependent information network is the strategic starting point of enterprises.

2. Networked enterprise strategy

Compared with the conditions and forms of enterprise strategy under traditional economic conditions, the strategy of enterprises in the network economy is a network driven by openness and increasing returns. ization strategy.

(1) The so-called network strategy is actually to use the network as the main means of cultivating and applying network resources for enterprises, to implement network operations for enterprises, to achieve sustainable competitive advantages of enterprises, and to maintain the strategy of enterprises. competitiveness. The connotation of network strategy includes two aspects. First, enterprises’ understanding of the network goes beyond the general scope of the network. It includes both the enterprise's application of information technology and its network, and the hybrid operation of enterprise organizational forms. Secondly, the enterprise's network strategy refers to the comprehensive network construction of the enterprise internally and externally. Internally, enterprises tend to reduce or eliminate intermediate hierarchical structures to flatten the organizational structure, and the way of resource combination tends to be a team format dominated by the personalized or scale customization needs of external "customers"; externally, economic activities of property rights transactions are carried out At the same time, we also pay attention to the organizational relationships of innovative value and use these organizational relationships as the main starting point of corporate strategy.

In fact, network strategy is the deepening of corporate cooperation strategy. This network strategy enables enterprises to change the basic concept of market competition and move the sum-non-cooperative game closer to a non-zero-sum cooperative game. In practice, group or alliance behaviors such as outsourcing, joint ventures (cooperation), franchising, and R&D consortiums are of this kind. Application form of strategy. Within the enterprise, corporate governance has moved from the traditional strengthening of enterprise ownership and operational control to property rights cooperation based on cooperation or partnership.

Among them, with the rapid development of economic globalization and technological progress, especially the convergence of technical functions, enterprises relying on integrated competitive strategies to obtain natural resources cannot guarantee the long-term continuation of their competitive advantages. Enterprises must not Instead of being under the impact of information and network technology, we should consider cooperation strategies based on complementary resources.

(2) In the traditional economic era, cooperation strategies also exist. Research on industrial organizations shows that cooperative behavior of enterprises in the market can bring excess profits to enterprises. The reality of market economy is the organizational behavior of perfect monopolistic competition, monopolistic competition and oligopolistic competition of enterprises in addition to perfect competition.

However, in the SCP analysis paradigm, the ultimate performance of enterprises in these organizational forms violates several market norms of capitalism and is subject to varying degrees of regulation in different market economy countries.

So we know that the essence of network strategy requires corporate strategy makers to rethink the new economic implications of strategy. Since the efficiency mechanism of enterprises in production input under the new economy moves from diminishing returns to increasing returns, this directly leads to different strategic mechanisms for creating value. The interdependent relationship network is not only another basic form for enterprises to allocate resources, but also the basis for the existence of enterprises. The enterprise's strategy subsequently changes in the enterprise's resource and capability base. Networking has the same impact on an enterprise's internal organization and external competition. Therefore, strategy here is not the level of experience of previous enterprise strategic decision-making groups, but the level of enterprise capabilities and the imagination of the enterprise as an organism facing the future; enterprise competition is determined by The competition of products in the terminal market has turned to the competition between the core competitiveness of enterprises, and then the competition between enterprise networks. Regarding competition between networks, examples of competition between knowledge-intensive high-tech enterprises in the formulation of product standards show that property rights cooperation between enterprises is very common, and enterprises, regardless of whether they are competitors or not, form intricate relationships. Alliance groups maintain the base for enterprise development in an interdependent business ecosystem, which is called alliance competition or "co-evolution." This situation makes strategy transform from an action framework to an asset capability role in traditional enterprise management, resulting in strategic innovation.

In view of the unlimited information transmission in cyberspace and the effective impact of the "openness" principle on organizational boundaries, the conditions for corporate strategic innovation will shorten its life cycle, and the corresponding value creation mechanism will It is the continuity supported by past experience that changes into the discontinuity supported by the imagination of the backbone network. In other words, corporate competition under network conditions has become a non-linear competition, and the value provided by corporate strategy implementation has to transform from linear competitive advantages to non-linear competitive advantages. Therefore, the strategic innovation of enterprises means that under the network economy, enterprise strategy enters the enterprise's resource and capability library with a non-linear innovative system capability, rather than a general action framework.

3. Thoughts on strategic management of networked enterprises

(1) The value creation mechanisms of enterprise strategies are different under different economic forms. Driven by the advancement of information technology, the traditional economy is changing both in economic practice and economic theory. This change is reflected through a new economic form such as the network economy.

The growth and development strategies of enterprises in the traditional economy are essentially subject to the constraints of diminishing returns. Therefore, corporate strategies tend to be low-cost or differentiation-oriented competition strategies, pursuing zero-sum game competition results. Market performance is mainly due to the scale and scope advantages of enterprises. Network economy as a new economic form. In essence, it embodies the law of rapid growth in economic theoretical research. The corporate strategy under this condition presents a "competition and cooperation" networked strategy driven by information technology and its network, that is, winning through cooperative competition and pursuing a non-zero-sum cooperative game. The results of competition have become a systematic capability of the enterprise in a non-linear innovative way.

(2) The emergence of the network economy has an extraordinary impact on corporate business activities. To a large extent, it will promote corporate business concepts and models, not just product transformation and innovation. The existence of the network economy shows that enterprises have to consider changing the previous concept of competition, from single competition to cooperative competition, and establish a concept of winning competition based on cooperation. The formation of this concept comes from the blockade of material resources by information and its network, so the widespread application of the network will inevitably break various traditional competition barriers. This is both an opportunity and a challenge for enterprises.

Through the application of the Internet, our state-owned enterprises can reduce the competition cost of entering the international market. Similarly, through extensive cooperation, state-owned enterprises can also exist in domestic and foreign markets in the form of an enterprise network. Compete at all levels of the market. However, also because of the all-weather economy and all-round economy attached to the network economy