Within an industry there are usually multiple performance peaks

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In our simplified analysis, the performance landscape is a multidimensional space in which the dependent variable is a measure of business performance (for example, business growth and/or profitability), while the independent variables are the different choices that a firm can make with regard to a given activity (for example, the breadth of the product range or the focus of innovation and R&D investment). (http://www.linksoflondon4lover.com)
If the independent variables are N, the performance landscape maps each set of N choices/activities onto a performance value. The concept of performance landscape provides a suggestive way to illustrate alternative strategic options and positions within an industry. Figure 3 illustrates alternative possible configurations of he performance landscape when N=2 3.

Given the environmental conditions, the concept encompassing all variables impacting on the value of a particular activity configuration and hence a firm’s relative profitability (e.g., customer preferences, available technologies, and competitors’ actions), the appropriateness of a set of choices, is represented by the height of a particular point on the landscape4.

The adoption of the notion of performance landscapes in business studies has flourished in the last decade. The early applications were more descriptive in nature and strictly followed the assumptions of the general model (Kauffman, 1993), e.g.: the interactions among activities/choices are distributed randomly. Lately, some studies have developed more realistic assumptions on the nature of the interaction among activities (Rivkin and Siggelkow, 2002; 2003), showing the effects of such patterned interactions and of different design choices on the organization’s performance. 4To keep the framework simple, we focus on static analysis and skip the discussion of how exogenous factors impact on the performance landscape. As suggested by Siggelkow (2001, 2002a, 2002b) a dynamic approach implies a more articulated framework, the distinction between internal and external fit and the specification of other parameters of the performance landscape.

If choices are complementary, or consistent, their combination corresponds to a performance peak in the landscape. The stronger these complementarities are, the steeper is the associated peak. Alternatively, a set of choices is defined to be consistent if changing any single choice (ceteris paribus) implies a performance decline. The notions of complementarities and performance landscape allow capturing the holistic nature of strategy and the effect of complementary choices on business performance. A strategic position corresponds to the situation in which a firm chooses a consistent configuration of (complementary) activities, thus locating itself on a performance peak of the landscape. (http://www.fad77.com)

Within an industry, there are usually multiple performance peaks, characterized by different heights, and, correspondingly, different strategic positions involving different configuration of activities. But performance peaks are not known ex-ante by industry players, and finding them requires costly and risky exploration. Nonetheless, discovering a new performance peak (and, therefore, a strategic position) can be extremely remunerative, under certain circumstances, if compared to the alternatives of either refining an existing configuration of activities or trying to imitate those of competitors (Rivkin and Siggelkow, 2003). A new strategic position within an industry largely corresponds to a “Blue Ocean Strategy” (Kim and Mauborgne, 2004) i.e. a strategy that redefines or alters the boundaries of an existing ndustry. Rivkin (2000) suggests another way in which complementarities can contribute to a sustainable advantage: strategic positions based on complementarities among large sets of choices are more complex.

This complexity (defined as the number of elements in a strategy and the interactions among those elements) helps explaining why some firms maintain superior profitability over longer periods, and why they resist imitation despite a) the leaking of information about new products and processes to rivals; and b) extensive public scrutiny of their strategies. Porter and Siggelkow (2000) further develop this point focusing on the nature, and not only the number, of the elements and interactions.

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The adoption of the notion Links Of London of performance landscapes in business studies has flourished in the last decade. The early applications were more descriptive in nature and strictly followed the assumptions of the general model e.g.: the interactions among replica handbags activities/choices are distributed randomly.

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