The Relevance of the Rational, Classical Approach to the ICT Sector
The chapter will now analyse the relevance of the rational, classical approach to strategy (McMillan 2008) within the modern, digital ICT sector. This can be approached from two perspectives. First, there is the rational ‘process approach’ and the extent to which strategy is formulated, evaluated and implemented in a sequential manner (Andrews 1971) and the appropriateness of Johnson and Scholes’ ‘analysis, choice and implementation’ model (Johnson and Scholes 1988). Second, there is the ‘strategy as content’ approach and the relevance of the strategic positioning paradigm and other strategic management tools. This includes Porter’s Five Forces framework (1980) and Porter’s Generic Strategy model (1985). The relevance of other strategy content (i.e. tools and techniques illustrated in Table 1.1) are also important including Porter’s Value Chain (1985), portfolio models such as Ansoffs Product/Market Matrix (1965) and the Boston Consulting Group (BCG) Matrix (Grant 2013) plus Porter’s Diamond (1990) and theories of comparative advantage. This chapter will focus on the first perspective, the ‘rational process approach’, before analysing the ‘strategy as content’ approach in Chapter 2.
The analysis will start by identifying who the constituents of the modern digital ICT sector are and the types of organisation that comprise the actual sector. Due to digitisation, the rapid diffusion of the Internet and the convergence of technologies (Hitt et al. 2003) the range and type of firms that can now be classed as belonging to the ICT sector has become quite large. The firms that now compete within this space belong to a range of categories including telecoms operators, telecoms equipment manufacturers, cable and satellite companies, Internet firms, software and silicon chip companies, hardware manufacturers (devices), cloud computing firms, and media companies providing content. There is also a new form of app-based aggregator company that operates as an intermediary between the buyer and the seller using a multi-sided market model such as Uber and Airbnb (Eisenmann et al. 2006).