6. Recommendations and concluding remarks
While I have focused on strategic changes that ultimately proved to be detrimental, sometimes companies may persist with strategies that have been successful in the past. Continuation of a past strategy, however, poses its own set of risks. Consider the cases of Blockbuster and Nokia. Placing great faith in its existing business model and its importance to the Hollywood studios, and fearing cannibalization of its existing bread and butter product of VHS videotapes, Blockbuster Video postponed the changeoverto DVDs and sowed the seeds of its eventual demise. For its part, Nokia persisted with an inappropriate business strategy based on the twin beliefs that customers would place great value on a broad line of phone models, and that emerging market consumers would continue to prefer cheaper-feature phones to expensive smart phones; these incorrect assumptions caused Nokia to slip from the position of dominant industry leader to eventually exiting the industry altogether. The cases of Nokia and Blockbuster suggest that even extremely successful business strategies need to evolve due to the dynamic broader environment (e.g., technology); competitive issues (e.g., new strategies implemented by competitors); and managements’ own ambitions, especially as regards growth (Pangarkar, 2012). From a managerial perspective, it is important to identify–—using the 2x2 matrix (see Figure 1)–—the positioning of a planned strategic change. Managers and companies might also improve performance by focusing resources on those changesthat are located in the most favorable quadrant (Quadrant I): they are competitiveness-enhancing, aswell aslikely to receive strong commitment from key stakeholders. It may be equally important to avoid implementing strategic changesthat fitin the leastfavorable quadrant(Quadrant IV): they do not enhance competitiveness and stakeholder commitment will be lacking.
