Four main cornerstones of competitiveness are shown in Exhibit 2-10. Strategy authorities agree that an organizational focus on providing superior customer value is essential to achieving superior performance. As we noted in the earlier discussion of competitive advantage, value is gained through product differentiation, low cost, or a combination of the two. We will briefly examine each cornerstone. One or more is included in many of the strategy paradigms.

The importance of a market focus is considered in Chapter 1, where we looked at the process of becoming market-oriented and reviewed the evidence that market-oriented firms achieve better performance than those that are not market-oriented. Market focus also highlights the need to recognize diversity in buyers' needs and wants by segmenting markets and targeting specific segments.

Earlier in the chapter we looked at the compelling logic of finding out what a company does best and leveraging this capability in achieving superior customer value. The capabilities approach to strategy is widely cited as an important strategy focus. Day proposes classifying capabilities as outside-in, inside-out, and spanning processes, as shown in Exhibit 2-II.36

Collaborative relationships are increasingly cited as essential components of business strategy. Environmental risk and uncertainty, as well as resource and skill gaps, encourage

companies to partner with others. Included are relationships with customers, suppliers, internal partners, and even competitors. Such relationships are common to many business strategies.

Organizational change is part of the strategies of many companies. Managers are

restructuring and redesigning traditional pyramid structures, focusing people on key

business processes (e.g., new product planning, customer management) and creating

multifunctional teams to manage the processes. The dramatic changes in the structure and

processes of IBM in the 1990s are illustrative.