Which concept best explains a company's reluctance to shift from a strategy that is no longer effective?

The concept that best explains a company's reluctance to shift from a strategy that is no longer effective is competitive inertia. This phenomenon occurs when an organization continues to follow its existing strategies, even when they become less effective or relevant in the face of changing market conditions or competitive landscapes. Companies may become comfortable with their current practices, which can lead to a resistance to change.

This inertia is often fueled by previous successes, internal culture, and organizational structures that favor stability over adaptability. As a result, even in the face of clear evidence that a shift is necessary, companies may struggle to embrace new strategies or abandon older, ineffective ones. In essence, competitive inertia reflects a form of organizational rigidity that hampers responsiveness to external changes, thereby potentially jeopardizing long-term competitiveness.

Other concepts like strategic alliance focus on partnerships between firms, competitive advantage emphasizes the edge a company has over its rivals, and strategic dissonance indicates a disconnect between a firm's actions and its strategic goals. However, these do not specifically capture the reluctance to change ineffective strategies the way competitive inertia does.