Article Summary "Strategy as Simple Rules" Essay

1011 Words Dec 6th, 2012 5 Pages
„Strategy as Simple Rules“ by Kathleen Eisenhardt and Donald Sull

A) Article Summary

Basically the article describes how and why companies like Yahoo, AOL or Enron use simple rules in rapidly moving markets. In the past companies were able to apply complex strategies due to a simple business landscape and stable markets, but nowadays most markets are not stable any more. Markets are fast moving and so complex themselves that companies are forced to react and to simplify their strategies.

The authors' central statement is that the traditional approach of staking out a defensible position misses the key to success in rapidly moving markets. That key is the ability to recognize and capitalize on fleeting opportunities. For dotcoms
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Exit Rules tell managers when to pull out of former opportunities. One high tech company focuses on new business creation by pulling the plug on new initiatives that fail to meet certain sales and profit goals within two years.

Key processes: Each of these companies has zeroed in on one or two key processes that are critical success factors. They then set up a few simple rules to guide activity in these processes in a way that balances risk with the need to move quickly.

Deciding if Simple Rules will Work for You: Most dotcom managers are faced with a vertiginous number of opportunities: partnerships, acquisitions, licensing deals, new products, new markets, new ideas, all with the potential to make or break the company. Simple Rules may be the right approach for your company to use in managing this creative chaos.

B) Application

The article was very interesting, it made my pensive and stimulated some new thinking. The most important thing for me – as I am a type of human being that likes complicated situations which need clever decisions to get an advantage over other competitors – was the warning about to try to apply complex strategies in rapidly moving markets. You'll probably work 100 hours a week if you complicate your strategy. Therefore I feel this article and

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