Review: Strategic Windows by Derek F.Abell

Every business model or strategy has a shelf life. That winning idea on which the companies are banking on for the last many years will not remain a winning idea forever. There is a time window during which company will be able to mobilize its resources to meet the market requirement. Author has referred to this window as STRATEGIC WINDOW. This window is open till the time there is a good fit between the market requirements and company’s competencies. Once the window closes down the competitive advantage is lost. For e.g. Dell for the last 10 years has been banking on direct selling model. Model was working beautifully until last 2 years, when it began to lose its steam. Now Dell is also working on retail model to push its products. One can say that every business model/strategy has a shelf life.

Now companies are able to make incremental changes to tune themselves to the changing business environment. But sometimes they are unable to envisage the magnitude of the change happening in the market and hence become incapable of coping with it.

Author has give four possible reasons for this change. One reason is “New Primary Demand”, which essentially means that even though a company might be a pioneer in a particular market, it might not be able to cash on the new opportunities offered by the same market. Other companies which entered late might be able to serve those opportunities better. It may be called as second mover advantage. For e.g. though 3M has been pioneer in developing new markets, Unilever has been to better understand the market created by 3M and deliver better value proposition to the customers than 3M.

Second reason could be “New competing technologies”. Eveready continued to manufacture non rechargeable batteries, when the market was moving to the chargeable batteries fast and eventually lost the market share. This is a classic case of new technology making older technology obsolete. Same may happen to Moser Baer if they don’t move to new DVD format in the coming time.

Third reason is “Market Redefinition”. Under this one case is where customer prefer end to end solution rather that going for piece meal approach. Niche players sometimes loose to big players on this front. Fourth reason is “Channel Change”, which happens due to changing customer requirement s and market dynamics. For e.g. with internet becoming house hold phenomenon in Tier 1 and Tier 2 cities, Travel agents are facing a hard time. Due to internet means of deliver has changed and travel agents are no longer handy.

Apart for these four reasons there could be plenty of other reasons which might lead to change in the market requirements. Some of them are changing demographics, Globalization, rising income levels and many more.

The concept of strategic window comes in handy for both existing business and new entrants. Using this concept they can better time their decision to mobilize or demobilize the resources.

Existing businesses can find out if they are capable to mobilize the required by the changing market or should they exit the business. New entrants can find out the right time to enter the market. It should be the time when market requirements and companies competencies are in sync with each other.