as a result, the traditional approach of building a business around a competitive advantage and then hunkering down to defend it and milk it for profits no longer makes sense. mcgrath: because many of the barriers to entry that once protected companies and sectors have fallen. s+b: is the loss of competitive advantage a new dynamic in the business world, or is it something that has always existed? the leaders at infosys, one of the outliers that i cite in the book, reorganize the company every two or three years, whether they need to or not. you need to look at the arena of addressable household spending and ask how to make cars that are very relevant to american households. in an environment of temporary advantage, you need to be able to reconfigure assets, people, and capabilities to move from one opportunity to the next as the advantage shifts. they need to have a common understanding of what’s within the strategy and what’s excluded from the strategy.
the environmental cues in a place like rochester are that everything is fine. the traditional company invests a huge amount of resources in its strategy and then tries to defend it. the pace and rhythm of allocation decisions need to be speeded up, too. if they can come up with a proposition that works, the company is going to invest like crazy in that business. but when the surprises are unanticipated developments, like a new competitor coming from out of left field, leaders need to hear about them or it could be fatal. a company that treats people like disposable resources is going to get rewarded for it in the near term and punished in the long term. mcgrath: there are conditions to being able to step in and out of a career. and we need to create a place in the mix for it.
thus, what she says is worth reading and even if you do not agree with some of her ideas, there should still be something in her new book, the end of competitive advantage, that will make you think differently about your approach to strategy in the future. [v]irtually all strategy frameworks and tools in use today are based on a single dominant idea: that the purpose of strategy is to achieve a sustainable competitive advantage. this is not a new idea and mcgrath owes much to the concept of ‘disruptive innovation’, a term coined by clayton christensen to describe the process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors1. the book serves as a ‘playbook’ for strategy that is based on updated assumptions about how the world works, and shows how some of the world’s most successful companies use this method to compete and win today.
as shown in the figure below, there are five phases (launch, ramp up, exploit, reconfigure, and disengage) that exist in each wave of advantage, and the author stresses that although exploitation of a transient advantage is advantageous for a period of time, excessive build-up of assets and people should be prevented as much as possible so that barriers to moving on to the next advantage are minimised. then, if a company is fortunate, it begins a period of exploitation, in which it captures profits and market share, and forces its competitors to react. often, the very success of the initiative leads to competition and a weakening of the company’s advantage. filled with examples from ‘growth outlier’2 firms such as fujifilm (japan), cognizant technology solutions (us), infosys (india) and atmos energy (us), the end of competitive advantage is marketed as a guide to renewed success and profitable growth in an economy increasingly defined by transient advantage. 2these are companies with a market capitalisation of over us$1 billion that had a revenue growth threshold of 5% every year.
are you at risk of being trapped in an uncompetitive business?chances are the strategies that worked well for you even a few years ago no longer deliver the results you need. in a world without sustainable competitive advantage, the new path to winning means capturing opportunities quickly and exploiting them “the end of competitive advantage makes clear that high-performance teams have to stay vigilant. are your leaders seizing new opportunities or just trying to the end of competitive advantage will give you an entirely new perspective on how to think about strategy.” “this smart, readable book addresses today’s most, people also search for, people also search for, the end of competitive advantage pdf, the end of competitive advantage summary, why are competitive advantages temporary.
this book serves as a new playbook for strategy, one based on updated assumptions about how the world works, and shows how some of the world’s the columbia business school professor says the era of sustainable competitive advantage is being replaced by an age of flexibility. “the end of competitive advantage” is based on a compelling premise: that the traditional view of competitive advantage is no longer viable in today’s, mcgrath 2013, transient competitive advantage examples, industry vs arena, blue ocean strategy, seeing around corners pdf, blue ocean strategy kim, transient advantage, blue ocean strategy book review.
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