The difficulty changing strategic position

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Understanding the difficulty changing strategic position

Changing the strategy of the firm may not be easy. A company will have made commitments to its prior position that now need to be adjusted. Certain changes may undermine a prior position, and it may not be possible to continue operating in both the legacy area and the new area at once. Coupled with this, there may be conflicts regarding whether the strategic change is desirable or not. Some organizational stakeholders may oppose adjustments, resulting in difficulties getting people both internally and externally on board with the change process.

Examples of challenges firms face in changing strategic positions

  • New resources required: The firm may need to develop new resources in order to compete in the new position.
  • Redundant resources: Prior company investments may no longer be useful in the new strategic position.
  • Internal conflicts regarding the change: Not everyone in the firm will be on board with adjustments to a firm’s position.
  • Different brand expectations: It may be difficult to shake off a prior customer image or to rebrand the firm for the new approach.

The connection of mobility barriers to changing strategic position

Mobility barriers is the term used to describe the difficulties that firms face in changing their strategic position. For example, the need to change the machinery involved to move from a firm that produces limited product varieties to one that has a large portfolio of product offerings would be one example of a mobility barrier that may make it hard for a company to change its strategic position. 

Final thoughts: Gradual strategic change

One approach to strategic change is to do so gradually over time. This can help avoid a situation where sudden dramatic changes need to be made to the resources of the firm, potentially undercutting its competitive position. Gradual change may also be an easier sell internally, and may allow the firm to position itself over time without a sudden loss of customers; should the changes not be accepted by the market, the firm may be better placed to revert back to a prior psoioning.