Strategic Drift

• What does strategic drift explain about businesses?

  Why successful businesses lose direction
• When does strategic drift occur?

  When a business's strategy is no longer relevant
• What happens to a business during strategic drift?

  It drifts off course over time
• How is the external environment described in relation to strategic drift?

  It is always changing
• What is the process called when businesses make small changes to their strategy?

  Incremental change
• What does the blue line in the diagram represent?

  The changing external environment
• What occurs in the second phase of strategic drift?

  The gap between business and environment grows
• What is the third phase of strategic drift called?

  Flux
• What does the flux phase involve?

  Recognizing issues and fluctuating responses
• What significant decision must a business make in the fourth phase of strategic drift?

  Whether to make transformational changes
• How can a new CEO help a business in strategic drift?

  By providing a fresh perspective
• What can happen if a business fails to respond to strategic drift?

  It may face business failure
• What market share did Kodak have in film processing?

  95%
• What did Kodak fail to recognize?

  The significance of digital photography
• What was Nokia's market share in feature phones?

  45-50%
• What did Nokia fail to respond to?

  Developments in smartphone technology
• What was Myspace's position in social media?

  Global market leader
• What did Myspace fail to respond to?

  Changing customer preferences
• What are the key reasons for strategic drift?

  • Constant changes in the external environment
  • Complacency among market leaders
  • Denial of problems by senior management
• What are the phases of strategic drift?

  1. Incremental changes
  2. Growing gap with external environment
  3. Flux phase
  4. Decision for transformational change
• How does the technological environment contribute to strategic drift?

  • Rapid development of digital technologies
  • Changing opportunities and threats for businesses
• What is the relationship between strategic drift and change management?

  • Strategic drift highlights the need for change
  • Businesses must adapt to external changes