Competitive advantage is a concept that often inspires in strategists a form of idol worship desire to imitate the strategies that make the most successful companies successful. It is interesting, however, that strategists have viewed precisely opposite factors to be sources of competitive advantage at different points in the histories of a number of industries. For example, Henry Ford’s emphasis on focus has been touted right next to General Motors’ product-line breadth as the key to success. Today, the outsourcing flexibility inherent in the nonintegrated business models of Cisco Systems and Dell Computer is held up as a model for all to emulate, whereas a generation ago IBM’s vertical integration was widely considered an unassailable source of competitive advantage. In the 1980s, power-tool maker Black & Decker aggressively consolidated its diffused international-manufacturing infrastructure into a few global-scale facilities so that it could counter the aggressive market-share gains that Makita had logged by serving the world market from a single plant in Japan. At that very time, Makita was moving aggressively toward manufacturing in smaller-scale local facilities around the world.
Indeed, strategists whose anecdotal understanding of competitive advantage runs only as deep as “If it’s good for Cisco, it must be good for everybody” at best are likely to succeed in building yesterday’s competitive advantages. If history is any guide, the practices and business models that... To read the complete article, login or sign-up using the form below.
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