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Sustainable Growth Through Strategic Innovation

Driving Congruence in Capabilities

Mitsuru Kodama

From detailed reviews of existing dynamic capabilities, this book presents a theoretical model of a strategic innovation system as a corporate system capability to enable a large company to achieve strategic innovation. The book includes in-depth case studies to illustrate the importance of strategic innovation capabilities.
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Chapter 4: Apple versus Sony: strategy transformation by capabilities congruence through asset orchestration

Driving Congruence in Capabilities

Mitsuru Kodama

Extract

Apple, a company that continuously brings about business innovations, achieved strategic innovation with its lineup of iPod, iPhone and iPad products and services enabled through convergence of diverse content and applications with a range of digital devices, based on the company’s “Digital Hub” vision. Apple’s redefining of its corporate boundaries to expand outwards from its Macintosh PC business into music distribution, smartphones and tablet PCs is also a good example of a corporate vision advancing for strategy transformation. In contrast, in spite of the fact that it had been way ahead of Apple with its successful commercialization of its “Walkman” portable music player, Sony lagged way behind in the music distribution business. This chapter analyses the major differences in the strategic actions of Apple and Sony, and presents the capabilities congruence achieved through asset orchestration processes to mobilize the different capabilities both inside and outside of the company leading to the Apple success (with the iPod and iTunes music store, and later the iPhone and iPad). Also, as a micro organizational strategy at the company, behind the success of their new product developments, was the achievement of integration through asset orchestration processes enabled by the formation of strategic communities (SC) (and boundary networks) at Apple. In contrast, Sony lacked elements of capabilities congruence within its group companies, and failed to integrate its different capabilities. This chapter describes the five dynamic capabilities (DC) at Apple, and how Apple successfully achieved strategy transformation by bringing congruence between these capabilities.

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