Chapter 1 – The Good, the Bad and the Ugly

After briefly explaining the simple meaning of “strategy”, Kim takes a look at some strategy success stories but concludes that “good strategy is not just about the occasional brilliant choice, made at particular points in time, but is continually developed and reinforced to carry a company from being a bright, first-to-market entity through the challenges of maturity, dealing with competition and staying relevant throughout its life.”

He then goes on to look at “the bad” and says: “Poor, but not disastrous, strategic management comes in many forms. The easiest examples to spot are one-off errors that clearly have negative outcomes, for example, diversifications that should never have been made, misguided entry into new markets, or acquisitions that were never going to deliver any benefits.” But he points out that we never hear of the much wider problem, of companies struggling on and continually failing to reach their aims and potential because of poor strategy and implementation.

Example of “the ugly” mistakes in strategy are all over the business Press, so this chapter does not dwell here long on these examples.

The chapter ends with some basic principles management might follow to avoid the “bad” and “ugly” outcomes in their own situations, although these are not enough on their own – principles from later chapters are also important.



Not all references may be available freely to all readers or in all regions.
cartoon: We should have hired sooner

  1. Gus Lubin, 2010, “Check Out These Collector’s Edition Analyst Reports Calling Lehman A Great Buy”, Business Insider, August 4. Retrieved 28-3-2012.
  2. Jim Collins, 2001, Good to Great: Why Some Companies Make the Leap…and Others Don’t, New York: Random House
  3. Steve Hodson, 2010, “Skype Commands 13 Per Cent of International Phone Calls”, The Inquistr, May 3. Retrieved 28-3-2012.
  4. See the Infosys 2008 Annual Report. Retrieved 28-3-2012.
  5. Skype S.à r.l., 2010, IPO Registration Statement, 9th August. Retrieved 28-3-2012.
  6. “Blue Ocean” strategy describes the search for new competitive positions that other companies cannot serve, in contrast to the “red ocean” of intensely competitive industries. See Chan Kim and Renée Mauborgne, 2005, Blue Ocean Strategy, Boston: Harvard Business School Press.
  7. Mark Perry, 2010, “Due North: Canada’s Marvelous Mortgage and Banking System”, Journal of the American Enterprise Institute, 26th February. Retrieved 28-3-2012.
  8. Giovanni Caveti, Rebecca Henderson, and Simona Giorgi, 2004, Kodak (case study), Boston: Harvard Business School.
  9. Thomas J. Peters and Robert H. Waterman, Jr., 1982, In Search of Excellence: Lessons from America’s Best-Run Companies, New York: Harper & Row, Publishers, Inc.
  10. British retailers going global
  11. NetFlix: Undoing the mess:|wwb|10-13-2011|business_this_week
  12. See Paul de Ruijter, 2010, Rabobank and Scenario Planning. 1st November. Retrieved 5-4-2012.
  13. BBC News, 2001, A Nation in Shock: Swissair Crisis, 28th November. Retrieved 28-3-2012.
  14. For a readable explanation of this concept and its consequences for poor decision making, see Carol Tavris and Elliot Aronson, 2007, Mistakes Were Made (but Not by Me): Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts, Orlando, FL: Harcourt Books.
  15. BBC: Horizon: Are you good or Evil?
  16. See Nick Collins, 2011, “One in 25 business leaders ‘could be a psychopath’”, Daily Telegraph, 2nd September. Retrieved 28-3-2012.
  17. See, for example, Richard Rumelt, R. 2011,. Good Strategy: Bad Strategy: The Difference and Why It Matters,. Profile Books. New York: Crown Business.

Cartoon by “Higgins