Strategic fit expresses the degree to which an organization is matching its resources and capabilities with the opportunities in the external environment. The matching takes place through strategy and it is therefore vital that the company has the actual resources and capabilities to execute and support the strategy.
- What is a strategic fit example?
- What strategic fit means?
- What are the types of strategic fit?
- What is the purpose of strategic fit?
What is a strategic fit example?
A variety of cost-saving opportunities (or economies of scope) can arise from market-related strategic fit: using a single sales force for all related products rather than separate sales forces for each business, advertising related products rather than separate sales forces for each business, advertising related ...
What strategic fit means?
A strategic fit is defined as “a situation that occurs when a specific project, target company, or product is seen as appropriate with respect to an organization's overall objectives.” Most executives seeking to expand their company through a merger or acquisition will look for another company that makes a good ...
What are the types of strategic fit?
There are three types of fit, which are not mutually exclusive:
- First-order fit: Simple consistency between each activity (function) and the overall strategy. ...
- Second-order fit: Occurs when activities are reinforcing.
- Third-order fit: Goes beyond activity reinforcement to what Porter refers to as optimization of effort.
What is the purpose of strategic fit?
Strategic fit evaluates the current performance of an organization/industry. This is necessary to evaluate how the organization is capable to achieve its external demands. To evaluate these organizational capabilities, this paper developed few models of strategic fitness.