Corporate Strategy

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Question 1 (I)
(a) Tacit Knowledge
This is a term that is used to refer to common knowledge that is possessed by everyone. It is found in the public domain. The mode of transfer of this knowledge is the continuous interaction between individuals. In the business world this refers to common knowledge in a particular market.
The online business dictionary describes tacit knowledge as a vast, hidden and unwritten resource. It is only seen or witnessed during shared activities .The larger part of what one knows s tacit knowledge and its application changes from scenario to scenario. This concept of tacit knowledge was fronted in 1966 by a Hungarian philosopher-chemist called Michael Polanyi. This was in his book entitled "The Tacit Dimension".
An example of tacit knowledge in the mobile phone market is the fact that a mobile phone should enable its owner to make calls, receive calls, send text messages and also receive them. For this reason a customer is aware that all mobile phones in the market have the above mentioned functionalities.
(b) Idiosyncratic knowledge
This refers to knowledge which is restricted to an individual or to a specific select group. Unlike Tacit knowledge, idiosyncratic knowledge is not in the public domain. The select group in which idiosyncratic knowledge may be found might be a company (Andreu et al 2008). In business terms, idiosyncratic knowledge is often replaced interchangeably with the term ‘firm-specific knowledge`. This is to suggest that this kind of knowledge is confined to a firm. For this reason, idiosyncratic knowledge varies from firm to firm.
Again we can draw examples from the mobile phone market. The manufacturers of blackberry handsets have a profound understanding of what a techno-savvy businessman expects in a mobile phone. In the case of apple computers, the people who work for its branding division know how to make a mobile phone attractive to a fashion-conscious person. The kind of knowledge found in these two firms is what is called idiosyncratic knowledge.
(c) Path dependence
This is a theory that states that all the decisions an individual makes are influenced directly by influences (s) he has made in the past. This applies regardless of the relevance of the previous decisions that had been made.
It originated in 1985 when it was suggested that ‘a few minor random shocks along the way could alter the course of history` (Scott 2006). Some people opted to summarize it even further by stating that the whole idea is that history matters.
An example that can illustrate this theory is a soccer match. As much as victory and defeat are pegged on the strengths and weaknesses of the teams, chance also plays a major role. An unintended tap on the ball can very easily turn the tide and hand victory to the presumably ‘weaker team`.
(ii) Competitive advantage
In general, this term is used t...