Strategic Fit versus Strategic Stretch

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Strategic Fit > Best Practices

Anneke Zwart, Student (University), Netherlands
According to Agnihotri (2014), literature has often overemphasized the importance of strategic fit. Many studies such as the study of Johnson and Scholes (1999) - suggest that companies must assess the macro environment surrounding the firm so as to determine the threats and opportunities and how to deal with them. Firms must at least have a certain level of strategic fit in order to be successful. However, a study of Prahalad and Hamel (1994) suggests that strategic fit is not the most important factor to take into account. Rather it is a matter of strategic stretch, which means that the successfulness of firms depends on the ability of companies to 'stretch' their available resources to achieve their objectives and intent. What arguments are in favor of stretch as a more important determinant of corporate success? 1. Stretch can better explain why small companies often outperform large companies in competition. 2. Several cases have shown that companies can create opportuniti (...) Read more? Sign up for free

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