The concept of strategic fit is vital for organizations seeking sustainable competitive advantages. It refers to the alignment between a company’s internal resources and capabilities and external market conditions. This text explores the meaning of strategic fit and its practical application through the case study of Equinor, previously known as Statoil.

The meaning of strategic fit

Strategy is a link between the firm and its goals and values, resources and capabilities, structures and systems, and its environment consisting of competitors, customers, and suppliers. A successful strategy must be consistent with these two environments. This consistency is called strategic fit.

It means that a company needs the necessary resources and capabilities to execute and support a certain strategy. It also means that a given set of resources and capabilities limits the potential strategies which can be realized by the firm.

Strategic fit can be used actively to evaluate the current strategic situation of a firm as well as opportunities to compensate current deficiencies in a given strategy.

Dimensions of strategic fit

Strategic fit encompasses two primary dimensions: the internal (resource-based view) and the external (market-based view) environments of a firm. Internally, it involves aligning a company’s goals, values, resources, capabilities, and organizational structures. Externally, it considers the broader market landscape, including competitors, customers, suppliers, and regulatory frameworks.

The essence of strategic fit lies in integrating the internal resource-based view (RBV) with the external market-based view (MBV). The RBV emphasizes a firm’s unique resources and capabilities as sources of competitive advantage, while the MBV focuses on how external market conditions create opportunities or threats.

Equinor as an example of strategic fit

Equinor’s transformation from a traditional oil company to a broader energy firm exemplifies strategic fit in practice. The company’s rebranding aligns with global sustainability trends and reflects its commitment to renewable energy, aiming for climate neutrality by 2050.

Leveraging its offshore oil expertise, Equinor leads in offshore wind energy, demonstrated by projects like Hywind Scotland, a collaboration with key players in the renewable energy sector. This transformation aligns the company’s internal strengths with external market changes, fostering a competitive and sustainable business. By investing in research and development (R&D) and diversifying its intellectual property, Equinor enhances its resource-based strategy while adapting to market trends.

In summary, Equinor’s strategic fit allows it to align internal capabilities with external demands, securing a long-term competitive advantage. The name change signifies its commitment to balancing fossil fuel expertise with renewable energy and adapting to regulatory and market shifts. Furthermore, Equinor possesses valuable, hard-to-imitate resources such as patents, trade secrets and trademarks, further strengthening their competitive advantage.

The concept of strategic fit holds significance. An aligned strategy can enable organizations to respond to market changes and pursue emerging opportunities.

About the author

Kenneth Bech is a Senior Advisor at the Norwegian Industrial Property Office (NIPO), where he has dedicated 17 years to promoting the organization’s services and the importance of intellectual property rights (IPR) in creating value for Norwegian businesses. He focuses particularly on startups in incubators and innovation hubs, as well as engaging with students and the broader business community through lectures.

He recently completed a University Diploma in IP Business Administration, which further contributes to his knowledge in the field. He also holds a Bachelor of Management degree and a bachelor’s degree in marketing from BI Norwegian Business School.