Sustainability of “Best of Breed” strategy

Abstract

Every organization, especially the ones starting out, face the choice of whether to diversify with a wide range of portfolio or remain a specialist with a single, near-perfect product. Former is focused on acquiring customers by showcasing its platform and range of services being offered by a single vendor, while the latter acquire customers using the “Best of Breed” philosophy. For a customer, there is a range of parameters that drives the decision of whether to create a technology stack with “Best of breed” technology or go with “a single vendor, a packaged platform.” Customers can also switch if their decision turns out to be wrong. However, on the supplier side, an organization has to choose with a much higher degree of constraints. Their decision is not determined by the most “optimal choice” philosophy. Often they make up choices because of their internal resources. We discuss the advantages and disadvantages of these strategic choices in the first half of the paper. We also discuss the different types of diversification and what kind of thought process is required when selecting the organization’s path in terms of this strategy. The report also builds upon the literature on diversification that discusses when and why should a company diversify? In the second half of the report, we look at different case studies from different sectors. We look at Epigamia (food and nutrition), Fisdap (software solutions for medical and healthcare), PayTM (mobile wallets, fintech, and e-commerce), Brooks Sports (sportswear), and Redbus (platform aggregator). These case studies bring to light the strategic choices taken in different contexts and build upon the frameworks discussed earlier in the report. We also discussed the strategies mentioned earlier with a few entrepreneurs to understand their perspectives on these two strategies. The interview excerpts have been noted towards the end of the paper. Finally, we conclude our understanding and analysis about how any organization’s strategic direction depends not only on the context but also on many other things, the most important of them being the internal resources and competencies.