The physics of the value chain towards a dynamic theory of strategy

Abstract

Understanding the evolution of a firm's competitive advantage in a changing environment over time remains one of the most important topics in competitive strategy. We build on a recent stream of research in the arena of the dynamic resource-based view to propose a simple heuristic for strategic corporate foresight powered by Little's Law. Notably, we propose a throughput equality required to align and synchronize resources in the value chain. We borrow the terminology of the supply/demand chain and assembly process representation to propose a fundamental construct for manifold decomposition of the value chain. Our proposed heuristic simplifies the dynamic complexity of the value chain.