It is mainly 3 conditions that strategists need to be wary of these days:
1) What performance measures really matter?
We need to relax the assumption of profit maximisation as the driver of business behaviour and the measure of success. We should be open to other interests, such as the intergenerational security of family control or the economic development of nation states.
For instance, state-controlled companies account for 80 per cent of the national stock market index in China, some of the largest Asian companies are family controlled.
2) What drives competitive advantage?
The traditional definition of competitive advantage directs us to forms of competitive behaviour that are often irrelevant. Anti-competitive strategy can matter a lot more. And competitive advantage may be state-based rather than market-based.
The example here is the Russian oil and gas industry where its mostly about superior access to Kremlin support.
3) Where is the competition?
In a world where many markets are dominated by a handful of companies, our theory and teaching should rely less on findings from large sample research studies. We need more in-depth case studies to understand intimately, from the inside, the interactions of giant companies with ambivalent motivations.
Google and Facebook dominate their markets of course, and the same is true for the Big Four accounting firms, the bulge bracket investment banks, the energy and mining companies, or the all-embracing Amazon. Strategy in these markets involves at best strange kinds of competition.
So it’s not about maximising the profit anymore and the number of markets with perfect competition are getting smaller every day. Especially in the industries that are most attractive to MBA graduates - technology and financial services - the traditional strategic frameworks cannot be applied and an effort has to be made to reinvent some of the teachings to reflect reality better.