Strategy has recently become the most important item on the management agenda because companies nowadays face increasingly more competition, turbulent economic environment and fast pace technological change (Chaharbaghi, and Willis ,1998). In the article “Strategy as Revolution” by Gary Hamel (1996), he defined what strategic innovation is and gives 10 principles that company in any industry should adhere in order to become leaders of their field. The purpose of this literature review places the article in the wider context of the innovation/optimization debate and also discusses the overall strengths and weaknesses.
Placing of the article in the wider strategy debate
In the article, Strategy as Revolution can be discussed in various different strategy debates. However, the most appropriate position is focusing on the strategies of innovation and optimization. These opposing views include different factors, which are the relationship between the firm and its environment and, the nature of the products created within each model organisation and environment. Gary Hamel mentioned in the article that there are three kinds of companies in any given industry; the rule makers, rule takers and rule breakers. In this article is more specifically base on rule breakers; which tend to gear towards being out of the ordinary different and often become revolutionaries in their field (Prahalad and Hamel ,1990). Thus, as a revolutionary to their field company or person Hamel (1998) states every organization must apply innovation on their own way and instil the culture of a way of thinking innovative and thus, aligning to the corporation’s core competences and culture Shieh (2011).
According to Adcroft and Willis (2000), the innovation paradigm is where the emphasis is on revolutionary change of the products and processes thus creating a new market itself. In contrast, the optimisation paradigm, is primarily considering competition amongst a relatively small number of firms who are all engaged in the delivery of a similar product using roughly the same processes.
Hamel (2006) stated that innovation is very crucial for companies to manage as it provides opportunities to stabilize their competitive edge. However, in this article Hamel strongly argues against the optimization view which is based on the emphasis on gradual changes and improvements within the companies vying for same market space (Adcroft and Willis, 2000). An example Anita Roddick, founder of the Body shop. She herself a rule breaker; she defied the cosmetic industry rules by choosing a direction outside the strategic norm by assuming women actually had self-esteem and just simply wanted simple products as oppose to expensive products to self-conscious individuals. (Hamel,1996). As innovative strategies is said to be based on giving a competitive edge through differences and by competing on the basis of strategic uniqueness rather than similarity (Adcroft and Willis, 2000). On the other hand, Michael Porter argues that optimization only works when all the firms face broadly similar environment, and there exists few rather than many competitors (Andcroft and Wills, 2000).
Other innovative strategies, as Kapferer (2012) pointed out that “blue ocean” strategy states innovations are disruptive and often called value innovations. This is highlighted in Kim and Mauborgne’s (2004) blue ocean strategy article where strategy is far different from traditional models; for example the ‘Red oceans strategy’ which primarily focuses already competing existing market space and demand while the blue ocean strategy defines how other companies take account into new market space and demand never gone before.
In addition, from the article “strategy as revolution”, it states that the view of radical innovations are based on the development and implementation of new...