Global Strategy - blog

The success of technology based firms hinges greatly upon their strategic fitness within two key domains: output markets and technology. First and foremost, the better the firms are able to develop and deliver valuable outputs (i.e. products and services) to customers within a focal target market, the better chances of success they have. Market based success is a function of an optimal market position and coverage and thus the demand potential underlying the targeted market. However, the value-added that that technology based firms ultimately deliver to their customers is based on an extensive and complex platform of technological knowledge and routines. Technology thus represents the inputs to a firm's productive process, whereby routines are required to turn the technological-scientific knowledge into tradable outputs that are perceived valuable by the customers. Despite normal mechanisms of market-based competition, much of competitive racing actually takes place in the technological domain.

The dynamics between a firm's strategy and finance is one major research focus in GloStra (see e.g. http://www.glostra.fi/research/business-model-evolution, as well as http://www.glostra.fi/faculty/hse/120-jaakko-aspara). Therefore, it is interesting to ponder what implications the current financial crisis and looming recession have for the relationships between firms' strategies and finance options, such as venture capital.