The design of a company’s value chain has traditionally been viewed as a static enterprise, the assembling of a fixed set of suppliers and distribution channels to get and keep competitive advantage. But the pace of change in today’s technologies and markets has made that approach obsolete. Competitive advantage is, at best, a fleeting commodity that must be won again and again. And that requires continual disintegration and reintegration of organizations, with frequent reshuffling of structural, technological, financial and human assets, as every player in the value chain seeks some sort of temporary competitive advantage. No matter what business or industry one looks at — from telecommunications to computers, automobiles to health care — ongoing value-chain assessment and design at the corporate level have become a necessity.
The best examples of such innovative value-chain adjustment can often be found in the dynamic evolution of upstart ventures and aggressive high-technology giants. With their constantly shifting technologies, processes and organizational structures, these companies provide useful lessons in how value chains can be managed to respond rapidly to ever changing strategic challenges. These New Economy players, however, are not the only ones facing dramatic and sweeping changes throughout their value chains. All companies in all industries are operating on ever faster evolutionary tracks and at ever greater risk.
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