Boardwalk floorboards painted in rainbow colours.

Strategic renewal: what can we learn from the rail and food industry?

9 February 2018

The article at a glance

As business leaders, having a clear strategy and being aware of when crucial changes need to be made is imperative to success. …

As business leaders, having a clear strategy and being aware of when crucial changes need to be made is imperative to success. As a leader, spotting the need for strategic renewal and executing your approach successfully is key to your position, and central to what colleagues within your organisation expect from you.

In some cases it is easier for leaders to spot the need for change – the challenge comes in the planning and rolling out of strategic renewal. For others there is a challenge in recognising where and why change needs to happen. Either way, a myriad of factors need to be considered, not least of all leadership style, capabilities, resources, timing and budget.

Abstract Rainbow Wooden Fence

Professor Yasemin Kor
Professor Yasemin Kor

Professor Yasemin Kor, Beckwith Professor of Management Studies, recently carried out research that looked at the various approaches, and the lessons learned by organisations going through the process of strategic change and renewal. Professor Kor’s research encompassed two keys areas; firstly the US railroad industry that went through major deregulation, redefining the rules of competition in the industry. The research then looked at the food retail industry and the approach supermarkets are taking to respond to the global food waste crisis.

There are lessons to be learned and applied from both industries:

Surviving the US railroad deregulation

Professor Kor and her colleagues studied competitive responses of the US railroad companies following a deregulation that lifted restrictions on market entry and exit, diversification, and pricing strategy. After an intense period of deregulation between 1980 to 2003 only nine out of 40 railroads survived as an independent legal entity. The research, published in Strategic Organization, found that the surviving railroads transformed themselves, and survived, using the following principles:

  • Strategic renewal in surviving firms involved a delicate balancing act: firms showed a high degree of entrepreneurial orientation and market responsiveness, but they were also masterful in capturing efficiencies.
  • Surviving firms first focused on overcoming inherited weaknesses from the regulation era. This involved eliminating cost inefficiencies, adopting new technology, and extending their geographical reach through acquisitions.
  • Once they established themselves and better understood their strengths, they developed a complex intermodal transportation capability. This involved combining rail with other modes of transportation including trucking, barges and ocean freight. This diversification move was then followed by entry into international markets. Thus, strategic renewal in the aftermath of deregulation involved proper sequencing and timing of competitive responses.
  • Survivors ventured into uncharted territories only after strengthening their core competencies in their expert domains, but they were also swift in their transformation. They chose to implement their competitive responses through acquisitions and alliances rather than organic growth.

How large food retailers are responding to global food waste crisis

The research, published on, looked at how large food retailers respond to the ongoing global food waste crisis and how these responses shape their competitive strategy and partnerships across the supply chain.

  • Global food waste crisis stems from the fact that between a third and a half of all food produced is wasted worldwide. Some of this enormous waste is linked to supermarket practices including how they transact with their suppliers and sell to their customers.
  • A crisis like global food waste isn’t just a PR issue. It is an indication of underlying systemic problems across the supply chain that urge the food retailers to revisit unproductive practices. Yet food retail is a conservative industry and change is hard to achieve organisationally. It takes a systematic approach to address the issues.
  • Despite difficulties some companies view the food waste crisis not just as a threat, but also an opportunity. Pioneer firms are utilising new technology and abandoning old practices used in working with farmers and other suppliers. They find that new practices strengthen their competitiveness and boost the future viability of their supply chain partners.
  • Likewise, helping consumers to cut food waste is a potential way to rekindle the relationship between grocery stores and customers. Companies with a long-term orientation toward the issue are on the way to develop more robust relationships and resilient supply chains.

Professor Yasemin Kor has shared her insights on the Strategic Change & Renewal programme at Cambridge Judge Business School on 3-4 May 2018