From the Activity to the Enterprise

J. Carlos Jarillo

Chapter Chapter 4 in Strategic Logic, 2003, pp 97-124 from Palgrave Macmillan

Abstract: Abstract Chapter 2 made it clear that the key element in strategic analysis is the activity, not the company as a whole, since the characteristics of the activities are what determine the potential for profit. However, we have seen many examples of how the directors of different companies commit strategic errors by not thinking in these terms. The reason, of course, is that management is not used to thinking in terms of activities, but rather in terms of company: their professional performance is measured by the results of the whole company. But in fact, all companies include many distinct activities in their daily tasks, as we have seen, and the division of activities is very far from being evident, since they do not show up with a label: think about the restaurant owner in Chapter 2 who is really in two completely distinct businesses, running a restaurant and property investment, without knowing it, and is exposed to committing serious strategic errors as a consequence of his ignorance.

Keywords: Blast Furnace; Switching Cost; Vertical Integration; Transfer Price; Entry Barrier (search for similar items in EconPapers)
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-59814-0_5

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DOI: 10.1057/9780230598140_5

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