For the past twenty years, competition has occupied the center of strategic thinking. Indeed, one hardly speaks of strategy without drawing on the vocabulary of competition — competitive strategy, competitive benchmarking, competitive advantages, outperforming the competition. In fact, most strategic prescriptions merely redefine the ways companies build advantages over the competition. This has been the strategic objective of many firms, and, in itself, nothing is wrong with this objective. After all, a company needs some advantages over the competition to sustain itself in the marketplace. When asked to build competitive advantage, however, managers typically assess what competitors do and strive to do it better. Their strategic thinking thus regresses toward the competition. After expending tremendous effort, companies often achieve no more than incremental improvement —imitation, not innovation.1
Consider what happened in the microwave oven and VCR industries. As a result of competitive benchmarking, product offerings were nearly mirror images of each other and, from the customer’s perspective, they were overdesigned and overpriced. Most buyers had no use for most of the features and found them confusing and irritating. These companies may have outdone one another, but they missed an opportunity to capture the mass market by offering microwaves and VCRs that were easy to use at accessible prices.
Another classic example is the battle of... To read the complete article, login or sign-up using the form below.
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