Gary's strategy should best match his firm's resources and capabilities to the opportunities in external environment. Defining the firm in the terms of what it is capable of doing may offer a more durable basis for strategy than a definition based upon the needs that the business seeks to satisfy.
Gary has to look at the fact that his firm was started with an aim of providing quality service and health to customers. Now, he is looking at the market from the resource point of view. But, a resource which caters to a changed market is different. Therefore, First-fitness strategy will be based on developing and exploiting internal capabilities to adjust and exploit external change (figure 8).
Establishing competitive advantages involves formulating and implementing a strategy that exploits the uniqueness of a firm's portfolio of resources and capabilities. He can learn from Competitor's success, but attempts to replicate their strategies mindlessly.
Gary has to look at his firm's resources (figure 7) and assess the decision criteria using the decision group dynamics (figure 8). He has to consider the risk reward trade-off in,
oAre the paybacks in the near future
oAre the profits reasonable
oIs the profitability and cash flows appropriate
oWhat are my Real Options'
oAm I satisfied with the option
oIs it consistent with my values
oDoes it evoke my interest
oDoes it challenge me enough
oIs it the best use of my resources
oDoes it increase my competitive advantage
oDo I influence the industry structure favourably
oAm I increasing the competitiveness in the industry (scorched earth policy) oAre my resources getting over-extended
oAm I delighting my customers and increasing their loyalty
oDoes it get the staff to carry this off