MBA business strategy

Question

. Why would a manager choose a shaping strategy rather than a parallel play approach when introducing a new technology?

Answer 1

I'm going to assume that you're asking about the actually meaningful business reasons for choosing a shaping strategy, because otherwise we could get into the weeds of all the personal motivations, biases, etc. that can drive managerial decisions regardless of the actual business environment.

The parallel play strategy relies upon other companies in the industry being fundamentally unable to scale up to the point that they can hedge other firms out of the market.

In contrast, a shaping strategy is inherently more ambitious and if successful could either radically expand the market or transform it in a way to give the company a persistent competitive advantage and/or create competitive disadvantages for others in the industry. Ultimately the rewards of such a strategy could be vastly greater by allowing one to gain either a larger market share or a share in a larger market, but it necessitates the risk of greater investment. The question is if the manager can marshal the means to reduce the relevant risks and/or maximize the rewards to make such a gambit worthwhile.

For example, if the company has substantial influence to shape the perspectives of many stakeholders and/or other market forces (customers, regulators, etc.) and make the desired direction of the industry appear to be extremely likely, then this can reduce the costs of a shaping strategy and thus alter the calculus in favor of it.