Strategists Pankaj Ghemawat and Jan Rivkin appear in the HBR February 2006 edition. In it, they examine why large differences in economic performance exist, and how competitive advantage may be created.
First, to create an advantage, a firm must configure itself to do something unique and valuable. The firm must ensure that, were it to disappear, someone in its network of suppliers, customers, and complementors would miss it and no one could replace it perfectly. The first section uses the concept of "added value" to make this point more precisely.
Second, competitive advantage usually comes from the full range of a firm's activities--from production to finance, from marketing to logistics--acting in harmony. The essence of creating advantage is finding an integrated set of choices that distinguishes a firm from its rivals. The second section shows how managers can analyze the full range of activities to understand the sources of added value.
The note covers a lot of ground, from the concept of "adding value" to analysis of discrete activities, but the main ideas rea fairly simple: Although every firm will face different challenges, this article offers a valuable perspective on what any management team should consider when targeting a competitive edge.
Read The Full Article On HBR