
By Sven Janssen (auth.)
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Example text
At the heart of the remaining sections of this chapter, Porter’s strategic management theory (the five forces framework) is analysed in the context of the banking industry. Porter’s framework for competition analysis is contrasted with Hamel and Prahalad’s theory about a company’s core competence and reviewed critically in the light of Brandenburger and Nalebuff’s use of game theory for competition analysis and strategic management. 4 Economic structures revisited – competitive forces in the banking industry Dealing with competition is central to strategic management.
7). Research about management strategies comprises a wide range of organisational studies (Starbuck, 1965, p. , 1998, pp. 7–9), most of which address the underlying questions about the different sources of a company’s profitability. , 1998; Whittington, 1993) and to clarify the somehow inflationary use of the term strategy. Whittington identifies four different schools (Whittington, 1993, pp. 10–41): the Classic school which sees strategy as a formally planned approach aimed at profit maximisation (key authors: Chandler, Ansoff, Porter); the Processual school is described by him as inward-looking which recognises the importance of internal political bargaining processes and the development of skills and core competences (key authors: Cyert & March, Mintzberg, Pettigrew); the Evolutionary school understands strategy as a means to survival in a hostile environment, with markets determining the natural selection process (key authors: Hannan & Freeman, Williamson); the Systemic concept emphasises the social context of strategy-making (key authors: Granovetter, Marris).
The positioning school maintains that industry structure conditions corporate strategy and thus also shapes corporate structure. Consequently, Porter’s writings stand in the tradition of Chandler’s dictum that “structure follows strategy” (Chandler, 1962). Chandler defines strategy as “the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out those goals” (Chandler, 1962, p. 13).