Strategic pathway: Establishing the right sequence of strategic priorities. Four stages are sited. First protect your existing business. Then, penetrate further into existing market segments with existing products or upgrades. Next, extend the business by creating new products for existing segments or by entering new segments with existing products. Finally, diversify into new markets with new products. This article was primarily written for midsize company management —specifically the manufacturing sector, but the authors see usefulness for other businesses including service industries.


James E. Ashton served as the chairman or CEO of a number of midsize manufacturing companies. Frank X. Cook, Jr., is a consultant to such companies. Paul Schmitz is the CEO of ThemaSys, a maker of heat-transfer products. Ashton and Cook authored "Time to Reform Job Shop Manufacturing".


Their theory is that midsize companies can produce growth rates of 15 % to 20% per year, over the short term by focusing on the unexploited potential of seemingly mature businesses. Their key to success is operational excellence. By continuing improvement in areas that contribute to customer satisfaction tremendous competitive advantage can be gained. They view the mistake of too many companies is that they don't follow the right sequence of strategic planning. Most companies jump to diversification to early and therefore their earnings don't reach true potential at the least.


This article contributes to the course's strategic planning chapter. The article sites strategic planning as a benefit for management development. The authors believe corporate strategy is overrated, and that the important strategic work to be done at most companies is at the business-unit level. Like our text, the article makes detailed mention of how companies have systematic ways of analyzing ongoing programs. Most mentioned is the value chain analysis: profit improvement opportunities through linkages with suppliers, profit improvement opportunities linkages with customers, and...