Strategy Under Uncertainty

What makes for a good strategy in highly uncertain business environments? Some executives seek to shape the future with high-stakes bets. Eastman Kodak Company, for example, is spending $500 million per year to develop an array of digital photography products that it hopes will fundamentally change the way people create, store, and view pictures. Meanwhile, Hewlett-Packard Company is investing $50 million per year to pursue a rival vision centered around home-based photo printers. The business press loves to hype such industry-shaping strategies because of their potential to create enormous wealth, but the sober reality is that most companies lack the industry position, assets, or appetite for risk necessary to make such strategies work.