Competition and positioning; innovation and growth

In most industries, radically changing supply chains or distribution chains mean that assumptions of strategy being a search for sustainable competitive advantage should be assigned to the trash can. 

The search of advantage is now a function of relative speed and selection of the firm's portfolio of product's, services and their markets, as well as markets for capital and for the knowledge and capabilities you need to service end-client needs. Advantage is short-lived.

Innovation is essential in all areas of the firm's arenas – its portfolio of products, services, resources, activities and interests. Sitting still means moving backwards – stasis is decline. 

You should think of your competitive position in terms of ‘arenas’ rather than industries.
— Ruth Gunther McGrath

Competition 

Competition is increasingly fierce and comes from non-traditional, often unexpected quarters; it is also increasingly global. Technologies, globalisation and inter-connectedness are changing how we compete and over what we compete. Customers' expectations are increasing as their options are rising. The result is that no advantage – at least one that is not a breakthrough innovation – is defensible. We live in times of strategy that must adapt to continually-eroding advantage or 'transient' advantage.

It is no longer sufficient to use old, five-forces-type thinking  to examine strategic forces in industries as traditionally defined. We must now anticipate competition from previously-unimagined sources. And we must keep strategic options open, meaning optionality must be valued. 

innovation & growth

In an environment of continually-eroding advantage, innovation cannot be episodic and it cannot be a serendipitous accident; it must be a continual and deliberate setting for the firm in all activities. And it is not helped by what some consultant, rather disingenuously, call 'best practice'. 

Firms must understand the rate at which erosion of advantage occurs and look for its tell-tale signs.

 

How we help

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CONTACT

Peter Bonisch
Chairman & Co-Managing Director


RESOURCES

A useful article on business models by Saul Kaplan at HBR online