Essay about A Critical Review of ‘Strategy as Stretch and Leverage’

1365 Words Jun 2nd, 2013 6 Pages
A Critical Review of ‘Strategy as Stretch and Leverage’

Academics argue a lot on strategic approaches that a company should make to gain competitiveness advantages over its competitors. Hamel and Prahalad (1993) challenge the traditional way and come up with ‘stretch’ and ‘leverage’ concepts to exhibit a whole new way to run a company. This essay aims to give a critical review of this article in the wider debate, theoretical underpinnings and main strengths and weaknesses. There are so many definitions about strategy in academics, and among them one of the fittest definition according to this article is come up by Johnson et al. (2008, p.3), ‘Strategy is the direction and scope of an organization over the long term, which
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Indeed, ‘the ability to maximize the insights gained from every experience is a critical component of resource leverage’ (p.80). This statement is supported by Long and Vickers-Koch (1985) that developing a learning system that concentrating on technology, resources, process and core competencies within the operational systems can improve facilitates’ competitiveness in some extent. Similarly, in order to improve competitiveness and there is a need to develop a learning system (Acur and Bititci, 2004). Thus, Grant (1996) suggests that knowledge is one of the important competitive assets that a firm possesses and knowledge is significant to extracting resources. Therefore, it should believe that it is one of managers’ challenge tasks to pay a lot attention on companies’ learning more efficiently to gain competitiveness advantages. This article offers a great number of arguments and evidences. Among them there are several strengths on one hand. Hamel and Prahalad’s (1993) article relies heavily on the RBV of strategy which has been developed to understand how organizations achieve sustainable competitive advantages (Halawi et al., 2005). Moreover, the RBV strategy has huge influential and managers are looking forward to building on the least resources to achieve competitive advantages (Johnson et al., 2008). Consequently, it

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