Searching for Great Strategies

Thomas Fink (), Pankaj Ghemawat () and Martin Reeves ()
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Thomas Fink: London Institute for Mathematical Sciences, Mayfair, London W1K 2XF, United Kingdom; Centre National de la Recherche Scientifique, 75016 Paris, France
Pankaj Ghemawat: Stern School of Business, New York University, New York, New York 10012; IESE Business School, 08034 Barcelona, Spain
Martin Reeves: BCG Henderson Institute, Boston Consulting Group, New York, New York 10001

Strategy Science, 2017, vol. 2, issue 4, 272-281

Abstract: We focus on answering the question posed for this special issue by elaborating a specific perspective, involving information-enabled search, in which firms add capabilities (or components) that expand what they can accomplish in the product market arena, and the key strategic choices concern the kinds of capabilities that are added. We establish that measuring how a new candidate component interacts with the components we already have can be a reasonable proxy for how they will combine with new components which we don’t yet have. This allows us to compare the performance of “impatient strategies” focused on the current usefulness of a new component and “patient strategies” focused on anticipated long-term usefulness. Their relative performance depends on how far the innovation process has progressed, and on the structure of the innovation space itself. In particular, a flattening in the increase of complexity implies an increase in the relative attractiveness of patient strategies over impatient ones, i.e., constitutes a signal to a switch strategies. It is therefore possible to construct information-based adaptive search strategies, which outperform either random strategies or fixed (patient or impatient) strategies for component selection. And there are broader implications for strategy as well.

Keywords: search; combinatorial innovation; irreversibility; uncertainty; adaptation; dynamic strategies (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:orstsc:v:2:y:2017:i:4:p:272-281

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