Sustainable business strategy emphasizes how an organization generates wealth in the long run. If it was easy, everyone would make them work. However, there exists organizations such as Apple and IKEA that have been able to both create and execute long-lasting and successful business strategies. Sustainable business strategies are 1) unique/different, 2) aligned with organizational identity, processes, activities, routines, and capabilities, 3) executed properly, and 4) renewed rarely.
Unique/different business strategy. To create long-term benefits, business strategies are often unique or different. Apple has relied on differentiation strategy and this differentiation manifests in their premium products and services. Apple’s products are not meant for everyone as they can be considered pricey and many times competitors already have the same features with the lower prices. The same applies to IKEA, not everyone wants to assemble furniture by themselves. As Michael Porter has said, firm doesn’t need to be the best but different.
Aligned with organizational identity, processes, activities, routines, and capabilities. Sustainable business strategy is aligned with organization’s identity (who are we?), processes (how we do things?), activities (how we organize tasks and errands?), routines (patterns to deploy resources), and capabilities (where are we good at?). Sustainable business strategy is thus something that an organization can do properly, then it’s easier to “walk the talk”.
Executed properly. In the end, only execution matters as talk is cheap. If strategy is not that different from the competitors, execution can make the difference. Elevator manufacturer KONE’s former CEO Matti Alahuhta said that their strategy (differentiation) wasn’t that different from their key rivals. Execution through well-picked must-win-battles differentiated them from the others back in the days.
Renewed rarely. Business strategies are long-lasting even in these times of turmoil and turbulence. Even though business strategies may need to be revamped and renewed occasionally to address exogenous changes, general strategies are renewed rarely. However, capabilities, routines, and activities are altered more frequently.
About the author:
Dr. Tuomas Huikkola is an Associate Professor (tenure track) in the School of Management at the University of Vaasa, Finland. He holds a Doctoral degree in Economics from the University of Vaasa and a Master’s degree in Philosophy from the Universitat Autonòma de Barcelona, Spain. Dr. Huikkola specializes in strategic management, servitization, and digital transformation among technology companies.
In addition to his teaching responsibilities at both the Bachelor and Master levels at the University of Vaasa, Dr. Huikkola is a lecturer for UvaasaExEd in both our MBA and tailored programs for companies. As a researcher, his interests lie in smart solutions, as well as the strategic, dynamic, and relational capabilities of technology companies. He has published his work in various esteemed journals, including Technovation, Journal of Service Management, and Industrial Marketing Management.