“Inside-Out” vs. “Outside In” Frameworks Comparison
In the modern setting, companies struggle to meet customers’ requests. Although the outside-in view is more common, the inside-out one creates a strong competitive advantage.
The outside-in framework suggests a customer-oriented approach, whereas an inside-in one implies the focus on analyzing a firm’s internal environment. The main advantage of the inside-out approach is its use in building a compelling competitive advantage as a result of the internal factors’ analysis (Yrjölä, 2021; Frau et al., 2020). Tin turn, the main benefit of the outside-in approach is the focus on customers’ needs and the development of a respective business strategy based on the current market demands (Day, 2020; Kyprianou, 2018).
Remarkably, neither of the frameworks exempts the other from an organization’s choice of a business strategy entirely. However, depending on the circumstances, one of the frameworks will inevitably dominate the other. For example, an inside-out approach allows for a quick foray into a specific market, whereas the outside-in framework is preferable when a customer-oriented philosophy is needed (Liu et al., 2021; Hunt & Madhavaram, 2020; Musarra & Morgan, 2020).
Yet, it is important to remember that, when choosing between the two approaches, it would be wrong to dismiss one of them entirely. It is only after recognizing its own strengths and weaknesses in order to understand its potential that an organization can start approaching customers’ needs and understand how to meet them in the way that will be most efficient and expeditious for the organization in question (Takhtehkar & Rademakers, 2020; Goto et al., 2020). In turn, when trying to follow the market demand blindly and without a due assessment of its resources and capabilities, a company is likely to fall flat in its efforts to placate every member of the target audience. In other words, while the outside-in approach helps to understand the current trends, the inside-out framework is the one that helps an organization to become a true leader.
For example, the inside-out approach has worked perfectly for Apple (Verganti, 2017). The success of Apple can be explained by continuous innovation (Mohin, 2017). However, the same inside-out framework caused Toyota an entire host of problems, which can be considered the effect of poor analysis of internal factors and a lack of self-awareness (Mathewson & Moran, 2016). Therefore, the inside-out framework should be recognized as a short-term approach that will need to be supported by an outside-in framework eventually.
Day, G. (2020) ‘The yin and yang of outside-in thinking’, Industrial Marketing Management, 88, pp. 84-86.
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), p. 1.
Goto, S., Ando, T. and Yaegashi, K. (2020) ‘Outside‐inside‐out Frame Creation Model for the Innovation of Meaning in a B2B Industry’, Design Management Journal, 15(1), pp. 58-67.
Hunt, S. D. and Madhavaram, S. (2020) ‘Adaptive marketing capabilities, dynamic capabilities, and renewal competences: The “outside vs. inside” and “static vs. dynamic” controversies in strategy’, Industrial Marketing Management, 89, pp. 129-139.
Kyprianou, C. (2018) ‘Creating value from the outside in or the inside out: How nascent intermediaries build peer-to-peer marketplaces’, Academy of Management Discoveries, 4(3), pp. 336-370.
Liu, J., Sheng, S., Shu, C., and Zhao, M. (2021) ‘R&D, networking expenses, and firm performance: An integration of the inside-out and outside-in perspectives’, Industrial Marketing Management, 92, pp. 111-121.
Mathewson, J. and Moran, M. (2016) Outside-in marketing: using big data to guide your content marketing. Indianapolis, IN: IBM Press.
Mohin, T. J. (2017). Changing business from the inside out: a treehugger’s guide to working in corporations. New York, NY: Routledge.
Musarra, G. and Morgan, N. A. (2020) ‘Outside-in marketing: Renaissance and future’, Industrial Marketing Management, 89, pp. 98-101.
Takhtehkar, J. S. and Rademakers, M. F. (2020) ‘Solving post-acquisition integration failure from the outside-in’, Journal of Creating Value, 6(2), pp. 232-248.
Verganti, R. (2018). Overcrowded: designing meaningful products in a world awash with ideas. Cambridge, MA: MIT Press.
Yrjölä, M. (2021) ‘Eye on the customer: breaking away from the inside-out mindset’, Journal of Business Strategy, 42(3), pp. 206-214.