High velocity markets drive adaptive capabilities
Prof. Dr. John J Olivervisibility
…
description
3 pages
link
2 files
At the core of every good strategy is the word ‘advantage’. Over the years management consultants and scholars have described this advantage as being competitive, differential, comparative, scale and sustainable to name but a few perspectives. However, with many markets now exhibiting high velocity conditions (Oliver, 2012) firms are adapting their corporate level strategy, business models, resources and capabilities at an increasingly frequent rate. This paper argues that at the core of every strategy, there now needs to be the word ‘adaptability’. One of the most topical management issues today is how firms sustain their business in markets that are increasingly characterized by volatility, numerous disruptions and uncertainty. The idea that corporate strategy needs to emphasize the adaptation of a firm faster than rivals means that adaptive capability should be considered as a competitive advantage in itself. Therefore, in high velocity market conditions the ability to adapt a firm will be the most effective way to sustain a business the in the long-term.
Related papers
Adaptive Advantage and Superior Firm Performance
2015
The past decade has seen a transformation in the way media organizations have managed their businesses. The emergence of new media has paved the way for new technologies, digitalization, a proliferation of media outlets and multiple platforms to distribute mediated content. Picard (2002, p.46) argued that these structural market changes compel media executives to address the issue of sustainability since “a firm that is competitive today can lose that competitiveness in future years”. The work of Kung (2008) and Oliver (2012) demonstrated the nature of high velocity market conditions that characterize many media industries, whilst Doyle (2013, p.35) commented that “media firms have naturally adapted their business and corporate strategies” in response to the dynamic nature of media environment. This paper examines the concept of media firm sustainability by investigating the dynamics of the current UK media environment and the efficacy of media firm strategy and resource management. As such, issues of media firm sustainability will be examined through the lens of Dynamic Capabilities Theory (Teece and Pisano, 1994) which is well placed to consider how media organizations have adapted (Ambrosini, Bowman & Collier 2009) to a transformational context heavily influenced by technological innovation. This paper argues that it is the ability of a media organization to adapt and refresh their resource base, capabilities and competencies that can provide them with an advantage in the market place. As such, this paper argues that Adaptive Advantage should be a prime consideration for media firms operating in the type of high velocity market conditions that can threaten the sustainability of their business. This paper will present the findings from a survey of UK media executives and argue that Dynamic Capabilities Theory can be extended to consider not only the adaptation of organizational strategy and resources, but the notion that a media firm can gain an Adaptive Advantage over their competition, and therefore, provide the basis for the long-terms sustainability of their business.
Unraveling Successful Company Organizations: A Research Design to Explore Strategies for Thriving Amid Market Turbulence
Administrative Sciences
Companies operate in ever faster and more abruptly changing environments. Due to the global interconnectedness of markets and actors, changes in framework conditions often have impacts across industries and geographical borders and constantly present companies worldwide with new challenges; however, they also offer opportunities. Adaptability to abruptly changing conditions and the ability to shape market environments have gained enormous importance as strategic factors for company organizations. How exactly can adaptability be shaped? This paper assumes that today’s companies need concepts that help them to successfully adapt to these turbulent business environments and ideally to shape the changes to their own advantage. In addition, this work assumes that companies rely on already established models from science and business, but also (especially currently) develop new ideas themselves to adapt even faster and more effectively to changing conditions. To explore these phenomena, t...
How to sustain your business in times of uncertainty
2016
One of the most topical business issues today is about how firms sustain their business in markets that are increasingly characterized by volatility, numerous disruptions and uncertainty. Certainly the recent UK referendum result in favour of ‘Brexit’ will only have added an additional layer of complexity to this issue in the short to medium term. The issue of how businesses sustain themselves is increasingly centred on how they ‘adapt’ their business faster than their rivals. It’s all about having adaptive learning capabilities, and in fast changing market conditions, the ability to adapt your firm will be the most effective way to sustain your business the in the long-term. It’s called Adaptive Advantage.
Adaptive Organizations, Maintaining Competitive Advantage by Exploiting Change
2009
Crosscutting Issues in International Transformation, Interactions and Innovations among People, Organizations, Processes, and Technology, Essay 13, pp. 249-270, December 2009.
Staying Ahead of the Curve: An Analysis of Strategic Agility and its Role in Ensuring Firm Survival in a Dynamic Business Environment
This research paper explores the relationship between strategic agility and firm survival in a highly dynamic business environment. The study aims to identify the key factors associated with strategic agility and to analyze how they impact firm performance in a competitive and rapidly changing market. A systematic literature review methodology was employed to gather and analyze the relevant literature. Three key factors were identified as being associated with strategic agility: resource fluidity, leadership capabilities, and strategic sensitivity. The analysis revealed that firms with a higher degree of strategic agility have a better chance of survival in a dynamic business environment. Strategic agility helps firms quickly adapt to changes in the market, anticipate future trends, and respond to customer needs, thereby enhancing their competitiveness. This study contributes to the literature by highlighting the importance of strategic agility as a critical factor in ensuring firm survival in a highly dynamic business environment.
Nonlinear Dynamic Capabilities and the “Red Queen Effect”: Strategic Options for Bridging the Present to an Uncertain Future
Using the complexity science idea of fitness landscapes, a “bridges to the future” metaphor is used to describe three strategic approaches to adaptation: The land bridge (on a fitness landscape) is built by establishing strategic partnerships across the ecosystem and working to coevolve a solution to problems confronting the industry. The suspension bridge relies on firm footing that will survive the transition to carry an organization’s assets and resources across the difficult period. Finally, an organization can attempt a cantilever bridge across the adaptive valley in what amounts to a leap of faith. Examples are used to illustrate the argument.
The Price for Market Embeddedness is Declining Adaptive Capabilities: Model, Measurement and Illustration
British Journal of Management
This paper deals with a central challenge in organization and management research: to predict the evolution of an organization's adaptive capability. We address both theoretical and methodological gaps in existing research. First, focusing on the largely overlooked external constraints on adaptive capability, we model how ties between an organization and its market audiences curtail adaptive capability as market tenure increases. Second, we address the methodological weakness of conceptualizing the content of organizational change in prior research with a novel approach. Our distance‐based approach sees adaptation as change in an organization's position in a cognitive market space. With position defined, one can measure the speed of movement in that space. An analysis of the UK motorcycle market serves as an empirical illustration for our theoretical prediction and proposed measure.
Strategic Agility: A State of the Art Introduction to the Special Section on Strategic Agility
California Management Review, 2014
I n a chaotic environment in which markets emerge, collide, split, evolve, and die, one of the primary determinants of a firm's success is strategic agility, the ability to remain flexible in facing new developments, to continuously adjust the company's strategic direction, and to develop innovative ways to create value. The competitive landscape has been shifting in recent years more than ever. Globalization, rapid technological change, codification of knowledge, the internet, talent and employee mobility, increased rates of knowledge transfer, imitation, changes in customer tastes, and the obsolescence of products and business models have all caused a turbulent environment and accelerated changes and disruptions. These trends are expected to continue, producing ever more rapid and unpredictable changes. Current concepts such as sustained competitive advantage, resource-based view, and strategic planning have been deemed vague, tautological, and inadequate for companies to cope with the rate and complexity of environmental and market changes. 1 There are tensions between formal processes of strategic planning and opportunistic strategic agility. Strategic planning has been criticized for preparing plans for tomorrow based on yesterday's actions, concepts, and tools. Although strategic planning can help in specific situations, it usually creates an inertia that prevents fast adaptation when circumstances change or market discontinuities occur. There is an agreement on the importance of strategic agility in light of complex managerial challenges such as dynamic environment, globalization, accelerating rate of innovation, and mergers and acquisitions (as mentioned by Jack Welch). 2 Strategic agility requires inventing new business models and new categories rather than rearranging old products and categories. To cope with growing strategic discontinuities and disruptions, scholars have suggested the creation of strategically agile companies, including new ways for managing business transformation and
Business Resilience a Dynamic Capability to Overcome Extreme Adversity
2019
This article delimits the business resilience concept making however a direct association with dynamic capabilities, and reviews 3 crucial moments a turbulent company endures and has to overcome in order to be resilient. It is being presented in the form of a case study of the Colombian construction company AIA with a qualitative methodology. With the above, I want to share with the scientific community the findings that will explain how theories of dynamic capability and resilience could be a strategy for business recovery. The final results reflect what an organization must not do and thus should do in order to use this powerful dynamic capability better known as resilience to stay in or get to a number one spot in the market.
High velocity markets drive adaptive capabilities
At the core of every good strategy is the word ‘advantage’. Over the years management consultants and scholars have described this advantage as being competitive, differential, comparative, scale and sustainable to name but a few perspectives. However, with many markets now exhibiting high velocity conditions (Oliver, 2012) firms are adapting their corporate level strategy, business models, resources and capabilities at an increasingly frequent rate. This paper argues that at the core of every strategy, there now needs to be the word ‘adaptability’.
One of the most topical management issues today is how firms sustain their business in markets that are increasingly characterized by volatility, numerous disruptions and uncertainty. The idea that corporate strategy needs to emphasize the adaptation of a firm faster than rivals means that adaptive capability should be considered as a competitive advantage in itself. Therefore, in high velocity market conditions the ability to adapt a firm will be the most effective way to sustain a business the in the long-term.
How do firms sustain themselves through adaptation?
Adaptive capability should not be confused with the Darwinian view of natural selection where the competitive survival of the firm is determined by trial, error and how successful they are at incrementally adapting the business to the prevailing environmental conditions. The strategic adaptation of a firm is not achieved by ‘chance’ but by rationale strategic planning and the desire to achieve an organizational goal that is dictated by changes in the competitive environment.
The concept of Adaptive Advantage is not new. However, it has received surprisingly little attention by way of theoretical development and empirical testing. To date, there has been much discussion on the need for organizational adaptation, rather than the advantage it can deliver to a firm who embraces the principle. Reeves and Deimler (2011) argued that firms could develop new adaptive learning capabilities that would reshape their business, through a process of managed evolution, which would deliver superior firm performance. These capabilities were considered to be the:
ability to detect and act on signals in the external environment;
ability to experiment and develop expedient low cost ideas;
ability to manage complex and dynamic multi-stakeholder eco-systems;
ability to mobilize resources by empowering people to proactively respond to changes in the environment.
Adaptive Advantage in Action
Recent research by Bournemouth University (UK) has examined the ability of UK media firms to gain an ‘adaptive advantage’ in the market place. The research investigated three areas of business activity.
An assessment of the competitive environment and outlook for the industry
The outlook for the UK Media Industry was extremely favourable with 89% of executives agreeing that the year ahead would be positive. This optimism is likely to be the result of improved macro-economic conditions that have fed down to industry level, since the majority of executives (63%) said that their ability to develop strategy was ‘not’ being hampered by uncertain market conditions. They also commented that their corporate advertising revenues were likely to increase (68%). However, there was some doubt with regard to some aspects of their competitive environment. For example, 82% stated that the industry was experiencing a high rate of turbulence and change and that only 54% of executives agreed that their business planning assumed economic growth in the year ahead. The majority (62%) of executives also commented that it was difficult to protect their core business whilst building new revenue streams.
An assessment of media firm capabilities
Corporate capabilities are derived from the an organization’s ability to manage and develop their resources in a way that differentiates them from the competition. These capabilities provide customers with value and a competitive advantage for the firm in the market place. Capabilities are the minimum threshold of resources that are required to satisfy market requirements, but in high velocity markets, these resources need to be regularly renewed and refreshed in order to meet the dynamics of new market conditions and sustain the corporate objectives of the firm.
The survey data provided some interesting observations on how media organizations were adapting their resource base to changing market conditions. In response to the question ‘Our core business is running out of steam and needs new capabilities’ the majority (68%) of executives felt that their core business was robust, which suggests that media firm sustainability is being achieved through the adaptation of their resources and capabilities in line with fast changing market conditions. In terms of how these capabilities translate into financial returns for the firm, 64% of executives believed that their firm’s current capabilities were sufficient to achieve their financial objectives in the year ahead.
The survey asked executives to comment on their firm’s corporate strategy and 92% stated that their strategy was aspirational. When asked whether their corporate strategy would include strategic alliances and other forms of collaborative activity to access new capabilities and boost innovation, 88% of executives strongly agreed or agreed with this statement. Indeed, innovation was central to most executive responses, with 64% of them saying that their company would focus more on innovation than cost reduction in order to remain competitive.
Refreshing a firm’s resource base in order to create new capabilities, requires significant and long-term strategic investments in Research & Development, infrastructure, people and organizational processes. The survey data indicated that many media firms (56%) would make significant investments in Research & Development in the year ahead and a further 52% would make investments in infrastructure, people and processes.
An assessment of media firm ability to adapt to new industry dynamics
A changing and dynamic industry encourages firms to experiment in order to sustain their business and remain competitive. This experimentation is often seen in adaptive processes relating to strategy making, business models and wider issues of organizational change.
The survey data indicated that the majority of media firms (74%) placed an emphasis on experimentation in order to keep pace with structural market changes. However, the process of making strategy showed that just over half (52%) of executives developed emergent and experimental strategies, whilst the remaining executives (48%) confirmed that their strategies were derived from the more traditional ‘analysis and design’ approach. Executive views diverged more substantially when considering business model adaptation and broader views on organizational change since most firms were adapting their business models (70%) in line with changes in the industry and yet when asked if their firms were adapting too slowly to change, around half (57%) agreed.
Conclusion
Perhaps the most compelling finding to support the idea that organizations need to place adaptive advantage at the centre of their corporate strategy is that research by Bournemouth University in 2012 found that 33% of media firms believed that they were adapting too slowly to change, and by 2015, this figure had risen to 57%. This finding is interesting and supports the idea that firms can gain an ‘adaptive advantage’ over their competition by adapting their business at a faster rate than their rivals.
References
Oliver, J.J. (2015). Media Outlook: A Survey of UK Media Trends and Firm Capabilities. Bournemouth University.
Oliver, J.J. (2012). Winning in high velocity markets: the case of BSkyB, Strategic Direction, Volume 28, Issue 10, pp. 3 – 5.
Reeves, M. and Deimler, M., (2011). Adaptability: The New Competitive Advantage.
Harvard Business Review. Vol. 89 Issue 7/8, pp.134-141.
Published as: Oliver, J.J. (2016). High velocity markets drive adaptive capabilities, Strategic Direction, Vol. 32, Iss 1, pp. 5 – 7.
High velocity markets drive adaptive capabilities
At the core of every good strategy is the word ‘advantage’. Over the years management consultants and scholars have described this advantage as being competitive, differential, comparative, scale and sustainable to name but a few perspectives. However, with many markets now exhibiting high velocity conditions (Oliver, 2012) firms are adapting their corporate level strategy, business models, resources and capabilities at an increasingly frequent rate. This paper argues that at the core of every strategy, there now needs to be the word ‘adaptability’.
One of the most topical management issues today is how firms sustain their business in markets that are increasingly characterized by volatility, numerous disruptions and uncertainty. The idea that corporate strategy needs to emphasize the adaptation of a firm faster than rivals means that adaptive capability should be considered as a competitive advantage in itself. Therefore, in high velocity market conditions the ability to adapt a firm will be the most effective way to sustain a business the in the long-term.
How do firms sustain themselves through adaptation?
Adaptive capability should not be confused with the Darwinian view of natural selection where the competitive survival of the firm is determined by trial, error and how successful they are at incrementally adapting the business to the prevailing environmental conditions. The strategic adaptation of a firm is not achieved by ‘chance’ but by rationale strategic planning and the desire to achieve an organizational goal that is dictated by changes in the competitive environment.
The concept of Adaptive Advantage is not new. However, it has received surprisingly little attention by way of theoretical development and empirical testing. To date, there has been much discussion on the need for organizational adaptation, rather than the advantage it can deliver to a firm who embraces the principle. Reeves and Deimler (2011) argued that firms could develop new adaptive learning capabilities that would reshape their business, through a process of managed evolution, which would deliver superior firm performance. These capabilities were considered to be the:
ability to detect and act on signals in the external environment;
ability to experiment and develop expedient low cost ideas;
ability to manage complex and dynamic multi-stakeholder eco-systems;
ability to mobilize resources by empowering people to proactively respond to changes in the environment.
Adaptive Advantage in Action
Recent research by Bournemouth University (UK) has examined the ability of UK media firms to gain an ‘adaptive advantage’ in the market place. The research investigated three areas of business activity.
An assessment of the competitive environment and outlook for the industry
The outlook for the UK Media Industry was extremely favourable with 89% of executives agreeing that the year ahead would be positive. This optimism is likely to be the result of improved macro-economic conditions that have fed down to industry level, since the majority of executives (63%) said that their ability to develop strategy was ‘not’ being hampered by uncertain market conditions. They also commented that their corporate advertising revenues were likely to increase (68%). However, there was some doubt with regard to some aspects of their competitive environment. For example, 82% stated that the industry was experiencing a high rate of turbulence and change and that only 54% of executives agreed that their business planning assumed economic growth in the year ahead. The majority (62%) of executives also commented that it was difficult to protect their core business whilst building new revenue streams.
An assessment of media firm capabilities
Corporate capabilities are derived from the an organization’s ability to manage and develop their resources in a way that differentiates them from the competition. These capabilities provide customers with value and a competitive advantage for the firm in the market place. Capabilities are the minimum threshold of resources that are required to satisfy market requirements, but in high velocity markets, these resources need to be regularly renewed and refreshed in order to meet the dynamics of new market conditions and sustain the corporate objectives of the firm.
The survey data provided some interesting observations on how media organizations were adapting their resource base to changing market conditions. In response to the question ‘Our core business is running out of steam and needs new capabilities’ the majority (68%) of executives felt that their core business was robust, which suggests that media firm sustainability is being achieved through the adaptation of their resources and capabilities in line with fast changing market conditions. In terms of how these capabilities translate into financial returns for the firm, 64% of executives believed that their firm’s current capabilities were sufficient to achieve their financial objectives in the year ahead.
The survey asked executives to comment on their firm’s corporate strategy and 92% stated that their strategy was aspirational. When asked whether their corporate strategy would include strategic alliances and other forms of collaborative activity to access new capabilities and boost innovation, 88% of executives strongly agreed or agreed with this statement. Indeed, innovation was central to most executive responses, with 64% of them saying that their company would focus more on innovation than cost reduction in order to remain competitive.
Refreshing a firm’s resource base in order to create new capabilities, requires significant and long-term strategic investments in Research & Development, infrastructure, people and organizational processes. The survey data indicated that many media firms (56%) would make significant investments in Research & Development in the year ahead and a further 52% would make investments in infrastructure, people and processes.
An assessment of media firm ability to adapt to new industry dynamics
A changing and dynamic industry encourages firms to experiment in order to sustain their business and remain competitive. This experimentation is often seen in adaptive processes relating to strategy making, business models and wider issues of organizational change.
The survey data indicated that the majority of media firms (74%) placed an emphasis on experimentation in order to keep pace with structural market changes. However, the process of making strategy showed that just over half (52%) of executives developed emergent and experimental strategies, whilst the remaining executives (48%) confirmed that their strategies were derived from the more traditional ‘analysis and design’ approach. Executive views diverged more substantially when considering business model adaptation and broader views on organizational change since most firms were adapting their business models (70%) in line with changes in the industry and yet when asked if their firms were adapting too slowly to change, around half (57%) agreed.
Conclusion
Perhaps the most compelling finding to support the idea that organizations need to place adaptive advantage at the centre of their corporate strategy is that research by Bournemouth University in 2012 found that 33% of media firms believed that they were adapting too slowly to change, and by 2015, this figure had risen to 57%. This finding is interesting and supports the idea that firms can gain an ‘adaptive advantage’ over their competition by adapting their business at a faster rate than their rivals.
References
Oliver, J.J. (2015). Media Outlook: A Survey of UK Media Trends and Firm Capabilities. Bournemouth University.
Oliver, J.J. (2012). Winning in high velocity markets: the case of BSkyB, Strategic Direction, Volume 28, Issue 10, pp. 3 – 5.
Reeves, M. and Deimler, M., (2011). Adaptability: The New Competitive Advantage.
Harvard Business Review. Vol. 89 Issue 7/8, pp.134-141.
Published as: Oliver, J.J. (2016). High velocity markets drive adaptive capabilities, Strategic Direction, Vol. 32, Iss 1, pp. 5 – 7.
3
Related papers
Remythologizing Augustine: History and Politics at the Edge of Time 2023 Saint Augustine Lecture
Augustinian Studies, 2024
The Forger's Creed: Reinventing Art History in Early Modern China (In Press / will be available in Jan. 2025)
University of California Press , 2025
A Study of Principled Negotiation Based on Transactional Analysis Theory
BRAND. Broad Research in Accounting, Negotiation, and Distribution , 2017
“Educate that holy hatred”: place, trauma and identity in the Irish nationalism of John Mitchel
Political Geography, 2001
JURISDICTION ON THE BLOCKCHAIN
ICBEMM 2020 (Oxford) 11th International Conference on Business, Economics, Management and Marketing, 2020
Reparación de Muelles para Garantía de Su Seguridad y Durabilidad
Revista De La Construccion, 2007
Block models of crustal motion in southern California constrained by GPS measurements
Journal of Geophysical Research, 2005
KARANLIK LİDERLİK ALGISININ İŞGÖREN PERFORMANSI VE İŞ TATMİNİNE ETKİSİ
İstanbul Ticaret Üniversitesi Sosyal Bilimler Dergisi, 2022
Severity of Pain and Sleep Problems during Kratom (<i>Mitragyna speciosa</i>Korth.) Cessation among Regular Kratom Users
Journal of Psychoactive Drugs, 2018
A histological study for the evaluation of potential harmful effects of orally ingested iron oxide nanoparticles in mice
Annals of Clinical and Analytical Medicine, 2021
An Approach to 8-, 16- and 24-Membered Sulfur-containing Heterocycles via Homolytic Cycloaddition of Alkynes with Butane-1,4-dithiol
Mendeleev Communications, 1995
Zwangssterilisation im Nationalsozialismus: Studien zur Rassenpolitik und Frauenpolitik
Schriften des Zentralinstituts für Sozialwissenschaftliche Forschung der Freien Universität Berlin, 1986
Molecular systematics and evolution in an African cycad-weevil interaction: Amorphocerini (Coleoptera: Curculionidae: Molytinae) weevils on Encephalartos
Molecular Phylogenetics and Evolution, 2008