“Strategic Fit.”
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For this discussion, we are going to focus on the concept of “Strategic Fit.” We can define strategic fit as:
“A situation that occurs when business decision-making is seen as appropriate with respect to an organization’s overall strategy and objectives.”
Strategic fit is the result of an organization having a clear business strategy for achieving competitiveness, and the functional areas of the business are aligned with this strategy and support its’ success.
One example is Wal-Mart. Their business strategy is low-cost leadership. For this strategy to be successful, the company must keep their cost of doing business as low as possible. Wal-Mart is the industry leader in low-cost sourcing, inventory control, and distribution. Some specific actions that Wal-Mart has taken to support this strategy include the pioneering of the point-of-sale inventory control system, and creating the world’s largest private truck fleet. By continuing to keep their cost-of-doing business low, Wal-Mart has been able to underprice their competition and grow to become the largest retailer in the world. By Contrast, K-Mart has had a higher cost of doing business, yet they still tried to match Wal-Mart on price. The result for K-Mart was bankruptcy.
For this discussion, I want each of you to conduct some research on strategic fit (and post any appropriate weblinks that you find), and share an example of a company who is either a good example of strategic fit (their business decisions have been supportive of their strategy and led to success), or a poor example (their business decisions have not been properly aligned with their strategy and this has led to poor performance or even business failure).
