Exploiting the dynamic links between competitive and technology strategies

Abstract

To date, two perspectives have dominated thinking about the connection between competitive and technology strategies. The first espouses a hierarchical view in which a company's competitive strategy and internal capabilities jointly determine its technological choices. The second perspective views technology as a subset of organizational resources and one of several vital strategic weapons a company can use to pursue its competitive goals. Unfortunately, both perspectives are static in nature. This article proposes a third perspective that builds on the dynamic interplay between a company's competitive strategy and technology. The article argues that, because technology and strategy variables influence one another in a continuous loop, both variables should embody an element of `prospecting', allowing novel developments to evolve. The dynamic interplay between a company's technology and competitive strategies emphasizes the importance of organizational learning and exploiting the knowledge created in this process. The article concludes by discussing the implications of the dynamic perspective for executive action, highlighting industry forces that may impact the dynamic strategy – technology relationship.