Article Summary
Hacklin, F., Battistini, B., & von Krogh, G. (2013). Strategic Choices in Converging Industries. MIT Sloan management review, 55(1), 65-73.
The journal article talks about the emerging actors in the business world and industrial convergence. It provides information on how some companies have been faced out due stiff competition. It discusses the changes in telecommunication whereby the mobile industry has been taken over by the computer makers. The Nokia Company is no longer the best mobile brand today, and Samsung and Apple are now dominating the market, Blackberry, on the other hand, has to compete with Apple and Goggle; the giants of the market. According to this journal article, the changes had both positive and negative implications to the market.
Although changes created job opportunities for some companies, some other companies were harmed. This journal article has been written as a result of a six-year study on convergence in the communications, media and performing sectors. Companies have been advised not to oversee what the industries around them are doing for this might have turned up to be too costly. Directors can detect problems of convergence by analyzing obvious facts, technical journals and arrangement structures. For instance, they can figure out how other factors of production may overlap and how this might be a problem in the future.
However, it is important to use a specific framework that would help define strategic importance and plotting operational responses (Hacklin, Battistini, & von Krogh, 2013); the changes helped opened to new companies, while some have been forced to merge with others for survival. This journal article also gives advice to individual companies that will help them protect themselves when industries merge through the basic strategies; the technology pioneer approach, which uses superior technological solutions that actively contribute to the progress of convergence among industries. The market attacker strategy is another policy whereby people try to make good use of improved technologies that are already in the market to exploit every opportunity, such as getting an upper hand in revenue opportunities.
The third basic strategy discussed in the journal article is the ecosystem aggregator, which are large businesses that take advantage of the available and favorable opportunities in the market (Hacklin, Battistini, & von Krogh, 2013). They usually have better chances than smaller companies, resulting from their high competences and market experiences that yield innovation and creativity. Finally, the authors of the journal article have proposed the business remodeler; a strategy used by big companies that have dominated the market for a long time, implying that they have a strong customer base, established networks, and strong brand equity (Hacklin, Battistini, & von Krogh, 2013).
Report
In chapter six, the first strategy that has been used is the vertical integration strategy, which contains forward, backward, and horizontal integrations. The approach was used in the article chosen this strategy because it is favorable since companies involved would be assured of business continuity. The other approach discussed in this chapter is the intensive strategy that includes market penetration, market development, product development, and innovation.
The authors of the article use it for the reason that is related to the ecosystem aggregator strategy, whereby companies involved expand their markets and, through innovation, come up with new products. Diversification strategy is the other strategy discussed in this chapter. The authors chose the strategy because it consists of related diversification and unrelated diversification.
From an analytical perspective, the journal article is a realistic document giving us the real picture of what is happening in the business world. It is a great asset to individual companies who are struggling to keep up with the changing market. The main strengths of this journal article are the fact that it recognizes the changes in the market and how the latter are affecting the market as a whole. According to the article, some of these changes are positive as they have created business opportunities for other companies, but some are fatal to other companies.
Another strength exhibited by the journal article is the way it outlines solutions through which companies can survive in case of industrial convergence. What is discussed in the journal article, in one way or another, might help solve the issue of industrial convergence, which can turn out to be harmful to individual companies. The ecosystem aggregator policy that is discussed in the journal article for example, proposes the idea that a company would be self-sufficient, producing literary everything needed in the market by making use of the favorable conditions in the market. This is to a great extent will favor the companies involved since there will be assured continuity and prosperity.
The article has also some weaknesses owing to the fact that it is proposing ways to help companies cope with the changes in the market. The proposals by this journal article are not all practical when a company is suffering from industrial convergence. The idea of market remodeler, for example, will not make sense when a company is in trouble of being faced out, because for a company to do this it has to have a strong customer base and long domination in the market.
Therefore, it is going to extremely hard for individual companies to use this proposal to safeguard itself from industrial convergence and the changes, which come along. A company that chooses to use the journal article should carefully examine it before deciding what to follow and what to avoid as one method may work with one company but fail with another company. From the discussion, it is clear that the ideas presented in the journal article may or may not help achieve a company’s objectives.