TThe main question that arises is whether organizations should choose an environment and build a resource base and activity system around it? Or should they build a resource base and and select an environment to fit in with these strengths? This leads us to two perspectives. They are as follows.
Managers with an outside-in perspective believe that firms should not be self-centered, but should continuously take their environment as the starting point when determining their strategy. They believe that successful companies are externally oriented and market-driven. For this type of manager, the game of strategy is about market positioning and understanding and responding to external developments. Insights into markets and industries are essential.
On the other hand we have the inside-out approach wherein the belief is that strategies should not be built around external opportunities, but around a company’s strengths. The issue of market positioning is essential, as only a strong competitive position in the market will result in above-average profitability. The firm’s competencies are more important than its tangible resources.