Is a sustainable competitive advantage still possible?
Discussion weblog on business strategy. Discuss best practices, ideas, news, models, methods, theories, tools, questions and answers.
In a short article "How Competition Strengthens Start-ups" (HBR March 2013), Andrew Burke and Stephanie Hussels report some key findings of their study of tax data of 2 million companies that were launched in the UK between 1995 and 2005.
Where is ‘marketing’ headed from ‘social marketing concept’? ‘Customer Life Growth Monitoring Concept’ seems to offer promise!
Confucius says: “Man who chases two rabbits catches neither!”
“I’d rather be strong somewhere than weak everywhere”.
When managers know they have only one battle to fight it concentrates their minds wonderfully.
Companies that broaden their line, for whatever reason, are vulnerable to narrowly focused competition that takes advantage of division.
Nobody loses business just because they have a broad focus. To lose business you have to run up against a competitor with a narrow focus.
What’s needed for success is focus, which sometimes can be achieved with a full line of products, but with sacrifices' made in other areas. Distribution could be one such area. Dell Computer deselected retail distribution and direct sales force with success.
Some managers equate size with power. Is a large company more powerful than a small one? Not necessarily. A highly focused company is more powerful than a less focused company.
What provide an organization with its power is its degree of focus and its share of market. Size is only important if it contributes to an increase in market share.
Power gives a company the ability to “control” an industry, taking it in a direction that will only increase the company’s power and domination.
Wouldn’t it be easier to increase the share of a business you know than to get a share of a business you don’t know?
A focus is not forever.
At any point in time, a company has 3 kinds of products. (1) yesterdays products, which are candidates for disposal; (2) today’s products, which are producing the bulk of the company’s profits; and (3) tomorrow’s products, which are the company’s future.
Nothing stays still long enough for a company to be perfectly focused.
Sooner or later even the most powerful focus becomes obsolete. That’s when a company must refocus itself.
Focus, the future of your company depends on it.
Abstracts from: “Focus, The future of your company depends on it”, by Al Ries
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In a recent HBR article (Jan 06), Marakon consultants Michael C. Mankins and Richard Steele argue that in most companies, strategic planning is not about making decisions, but about documenting choices that have already been made.
Strategy in uncertain markets requires active waiting. That is what Donald N. Sull says in HBR of September 2005. Furthermore, he identifies a number of management principles for surviving and thriving in unpredictable markets. These principles, taken together, define "active waiting":
Doing active waiting well requires from leaders that they are patient, disciplined and alert during the waiting process, and courageous and bold during the rare times of major disaster or major opportunity. Not many people are capable of aligning their leadership behavior to these crucial external circumstances.
It is now 25 years ago that Harvard professor, Michael E. Porter wrote "Competitive Strategy". Essentially Porter says you need to consider Five Competitive Forces to analyse the attractiveness of an industry for a company.
Most importantly, according to the authors there are really only three sustainable competitive advantages;
Greenwald and Kahn explain in depth how a business can capitalize on each type of advantage.
In the HBR of December 2004, Jeffrey F. Rayport and Bernard J. Jaworski write that the task of managing customer interfaces and managing interface systems is an underestimated strategic imperative. Those who deal with this in their customer S. cracking the code of interface systems will have a competitive advantage.
A new article on strategic industry change can be found in the Harvard BR of October 2004. As we all know, industries change. Some industries change fast, some change slowly over time, but all of them do change eventually. Anita McGahan explains industries actually change in one of 4 ways: radical, progressive, creative or intermediating.