We attempt to work out increasingly more and more advanced strategies, using increasingly more and more modern approaches and methods. Herewith we often overlook that not everything that works in the West, will work in Europe same efficiently and successfully. We have different markets, different management, and other mentality. In Europe we should concentrate on a little bit more simple strategies, because first of all any strategy should be understood by everybody, and in first instance by customers. Therefore let us consider some simple rules, which are effective in dynamic markets because they partially guide actions and yet also enable the flexibility of real-time, improvisational response to meet the demands of a changing environment (Brown amp. Eisenhardt, 1997. Miner et al., 2001).
In January 2001 Harvard Business Review article, Strategy as Simple Rules, Kathleen Eisenhardt and Donald Sull argued that the secret of success in rapidly shifting markets lies in strategy as simple rules. The authors discover that the success of companies such as Yahoo!, eBay, Google can not be interpreted by using traditional approaches to competitive strategy. There two approaches to competitive strategies that are represented in the literature.
The first one is resource based view, which is in conce…
They are enable sustainable competitive advantage both in current markets and through leverage into new ones, and superior performance (Amit amp. Schoemaker, 1993).
The second approach is strategic positioning. According to this approach managers of firms strive to occupy a defensible position in their respective industries aiming to reach a sustainable competitive advantage and superior performance (Porter, 1980. 1991). To the extent that this configuration and its related activity systems are difficult, slow or costly to achieve, incumbent firms are secure in their current competitive advantages (Caves amp. Porter, 1977).
It should be mentioned that these approaches are effective enough in a stable market environment. Strategy as simple rules set this competitive advantage in an unpredictable environment full of sudden-death threats and golden opportunities. According to Sull (2005), companies in unpredictable environments compete in their ability to respond to sudden-death threats, or to minimize their potential impact, on the one hand, and on the other one in the ability to seize potential golden opportunities. Instead of using approaches of competitive advantages, the above mentioned companies have excelled at changing in order to act and develop in accordance with the demands of constantly changing environment. These companies preferred not to survive in markets that were previously regarded as difficult, but let their strategies to evolve at every turn.
Eisenhardt and Sull (2001) discovered that the most successful companies use key strategic processes in order to identify areas, in which concentration of potential opportunities is the greatest. Simple rules are useful for