Prospectors respond quickly to change.
How does your organization compete within its industry? Do you constantly look for new opportunities? Do you prefer to focus on the same market and improve efficiency? Or maybe you sit back, and react to changes in the marketplace?
Organizations show incredible diversity in the ways that they operate and compete. For example, consider the various restaurants in your area. Each has its unique way of attracting new customers. Some frequently change their menus, based on the latest trends (think of wheatgrass juice and protein shakes), while others have offered the same menus for years.
Neither approach is necessarily right or wrong – each restaurant may be successful doing different things. Similarly, your organization may choose to launch a new product every quarter, or you may focus all your energies on one 'star' product. What's important, however, is that the type of competitive strategy you choose needs to be aligned with how your organization is structured.
Raymond Miles and Charles Snow studied the relationship between structure and strategy. In 1978, they published 'Organizational Strategy, Structure, and Process,' which identified four types of organizations – defenders, prospectors, analyzers, and reactors. Collectively, these types show us how companies compete.
Once you understand which type fits your organization, the Miles and Snow typology offers insights into how to improve your company's industry position by answering three key questions:
Miles and Snow's theory has been supported by a wide range of managerial studies, and it has become a useful concept in the field of strategic management.
Miles and Snow classified organizations based on the rate at which the companies change their products or markets. The types of organization that they identified are shown below.
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