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Similarities and Differences Between “Inside-Out” and “Outside-In” Strategies

Businesses can use various strategies to achieve their goals, and it is necessary to understand their pros and cons.

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In the beginning, it is necessary to explain what “inside-out” and “outside-in” strategies mean. Firstly, an “inside-out” approach implies using companies’ internal resources and competencies to gain shareholder value (Lagerstedt, 2014, para. 14). Secondly, an “outside-in” strategy focuses on external knowledge and resources, including customers, suppliers, and competitors, to create some value (Saeed et al., 2015, p. 122). In other words, the first approach denotes that a firm’s ideas and technologies can be used by others, while the second strategy implies the use of external advancements in internal contexts (Giadiodis, Ettie, and Urbina, 2013, p. 77). Consequently, businesses typically choose one of these models to run their operations.

There exist three differences and two similarities between the “inside-out” and “outside-in” strategies. Firstly, the definitions above demonstrate that the two represent the opposite approaches to finding value. Secondly, the “outside-in” strategy is more commonly used in high-tech industries, while low-tech ones tend to rely on an “inside-out” model (Saeed et al., 2015, p. 130). Thirdly, an “outside-in” strategy is more appropriate when the industry is dynamic, while more stable sectors benefit from “inside-out” approaches. As for the shared features, the two strategies imply certain disadvantages because an “outside-in” approach only leads to short-term advantages, while an “inside-out” strategy can be difficult to sustain (Kelly, 2019, para. 17, 30). Another similarity refers to the fact that the two are similar because they are used when companies want to generate some value.

It is worth admitting that some benefits can be obtained from uniting these strategies. It refers to cases when businesses focus on both productivity and customer satisfaction (Rust, 2019, p. 102). Furthermore, the focus on both internal and external environments allows organizations to assess their possibilities better (Frau, Moi, and Cabiddu, 2020, p. 3). This information makes it challenging to clarify which strategy is more appropriate. The current world provides organizations with versatile issues that require a comprehensive approach (Camillus, 2008, para. 3). That is why it is necessary to choose a strategy that will shape a long-term direction of a firm (Whittington et al., 2020, p. 2). Thus, a suitable option is to combine “inside-out” and “outside-in” approaches.

Reference List

Camillus, J. C. (2008) ‘Strategy as a wicked problem’, Harvard Business Review, pp. 99-106.

Frau, M., Moi, L. and Cabiddu, F. (2020) ‘Outside-in, inside-out, and blended marketing strategy approach: a longitudinal case study’, International Journal of Marketing Studies, 12(3), pp. 1-13. Web.

Giadiodis, P. T., Ettie, J. E. and Urbina, J. J. (2013) ‘Open service innovation in the global banking industry: inside-out versus outside-in strategies’, Academy of Management Perspectives, 28(1), pp. 76-91. Web.

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Kelly, C. (2019) Inside-out strategy vs. outside-in strategy: which marketing approach is best? Web.

Lagerstedt, E. (2014) Business strategy: are you inside-out or outside-in?  Web.

Rust, R. T. (2020) ‘Outside-in marketing: why, when, and how?”, Industrial Marketing Management, 89, pp. 102-104. Web.

Saeed, S. et al. (2015) ‘Inside-out and outside-in orientations: A meta-analysis of orientation’s effects on innovation and firm performance’, Industrial Marketing Management, 47, pp. 121-133. Web.

Whittington, R. et al. (2020) Fundamentals of strategy. 5th edn. Harlow: Pearson.

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