Striking a Balance

In reality, a strategy that seeks to achieve a balance of the inside-out and outside-in approaches may be the most successful.

The reverse approach is known as "outside-in," or a "market-based view" of strategy. This involves identifying what the customers and the market are going to need or want in the future, and then developing your resources and competencies to satisfy those market needs.

This approach has the advantage of ensuring that your products or services are desired in this market and will be bought. However, it may be hard to succeed with this strategy if what the market wants is not what you are good at, and if it is not easy or is prohibitively expensive to acquire the relevant resources and competencies.

In reality, a strategy that seeks to achieve a balance of the inside-out and outside-in approaches may be the most successful. There is no set formula for creating this balance--what matters is that it is right for your business. consider, for example, an organization that owns a medium-sized hotel in its own grounds with a group of experienced staff. Its strategy might be to look at these resources and select the most lucrative market using them (hotels specializing in romantic breaks, for example). Once the hotel has identified this market, it might then modify its resources and competencies to optimize its success in serving it.

ACTION POINT: Balance the strength of your resources and the needs of the market to develop and implement your strategy.