Strategic Drift

• What is strategic drift?

  When a business's strategy no longer aligns with its changing external environment, reducing competitiveness
• What are the four phases of strategic dift?

  1. Incremental change
  2. Strategic drift
  3. Flux
  4. Transformational change or demise
• What is the incremental change stage in strategic drift?

  Gradual adjustments that keeps the strategy aligned with market trends
• What is the 'strategic drift' stage in strategic drift?

  The rate of external change accelerates, but the company fails to keep up
• What is the 'flux' stage in strategic drift?

  The business is uncertain about what action to take
• What is the 'transformational change or demise' stage in strategic drift?

  The business either adapts or fails
• What are some causes of strategic drift?

  • Resistance to change
  • Failure to monitor the external environment - (e.g. PESTLE or Porter's five forces)
  • Over-reliance on past success
  • Slow decision-making
• What is a real-world example of a business that experienced strategic drift?

  Blockbuster - ignored the rise of streaming services like Netflix
• How can businesses prevent strategic drift?

  • Encourage innovation - companies should continuously invest in research and development
  • Continuously monitor market trends
  • Quicker decision-making
• Why is strategic drift important for managers to understand?

  • Helps managers recognise when changes are needed
  • Ensures long-term business survival
• How can strategic drift link to management decision-making?

  Firms relying too much on past data rather than adapting intuitively may drift behind competitors
• How can strategic drift link to short-termism?

  Firms overly focused on short-term profits may ignore long-term shifts in the market
• How can strategic drift link with Ansoff's matrix?

  If a company sticks to market penetration while the industry shifts towards diversification, strategic drift can occur