5. A dual strategy of differentiation and cost leadership
Strategies of differentiation and cost leadership have usually
necessitated different and incompatible investments and organizational
models. A strategy of differentiation for example implies
high quality offerings, and significant investments in innovation,
staff development and branding, leading to higher costs than
average. SIA achieves a differentiation strategy, but intriguingly,
without a cost penalty. In fact, as noted above, SIA has significantly
higher efficiency than its peer group, the key feature of a successful
cost leadership strategy. Table 1 above outlines many of the
elements discussed above in relation to the dual strategy of integrating
elements of differentiation and cost leadership (Table 1).
Strategic alignment can be represented as consisting of four key
elements. First, environmental conditions (macro- and microelements
relating to the industry), secondly the strategy of the
company that should be appropriate for the environmental
conditions, thirdly the core competencies that should effectively
support the strategy, and finally the organizational level (including
elements such as processes, culture, and functional strategies) that
should deliver the necessary core competencies.
The elements of SIA relating to the pillars are principally located
at the level of organization. This is the basic and key level of strategic
alignment, which delivers the core competencies of the
organization. SIA’s core competence is the ability to achieve
a differentiated offering with exceptional levels of efficiency, which
we labelled ‘‘cost-effective service excellence’’. This capability
supports SIA’s dual strategy, which in turn is aligned with macroand
micro-level market conditions