Companies change strategies for different reasons

Companies change strategies for a host of reasons, external (broad economic changes, competitors' moves) and internal (the results of a strategic planning process). But two reasons stand out, a recent McKinsey survey of global executives found. Each executive was asked what drove the largest strategic initiative in his or her company during the previous fiscal year, excluding strategic shifts made in response to a competitor's move or to the current economic turmoil. Two drivers together accounted for more than half the moves: a major product innovation (31%) and entering a new market segment (22%). Click on the graph above to enlarge.