#Jurassic old habits die hard tv#

A strategic inflection point, he says, is “a time in the life of a business when its fundamentals are about to change.” Inflection points are difficult for traditional strategy tools to address, because they usually don’t look important at first. Andy Grove’s phrase inflection point captures this situation nicely.

#Jurassic old habits die hard tv#

Apple and Google didn’t necessarily intend to disrupt point-and-shoot cameras, stand-alone GPS devices, TV advertising, or the Weather Channel, but they did so nonetheless.įor some time my argument has been that we need a new way of thinking about strategy in environments where traditional barriers to entry are eroding, or in which emerging technologies weaken constraints. And long-standing competitive strengths can be upended almost overnight by someone who has digitized your physical business (hello, Encyclopaedia Britannica) or turned your product into a service (see Zipcar, Airbnb, and Uber). Their environments aren’t stable-companies can be disrupted by entrants from below, as Clayton Christensen has pointed out, but also by competitors using a different business model or moving over from an adjacent industry. Just ask anyone in retail, entertainment, or telecommunications. Their industry boundaries aren’t clearly delineated-in fact, they’re totally blurry. Attempting to apply it outside those conditions can lead to disaster.īut for a growing number of companies, those conditions don’t apply.

The point is that every theory has its constraints. In such cases being an early mover can result in a formidable advantage.

Often called network effects, these dynamics mean that the more customers a company has, the more valuable it is to each additional customer. In addition, a whole new category of “platform” companies, such as Google, Apple, and Facebook, have emerged, and the very size of their customer base creates a reinforcing virtuous cycle.

Companies are achieving advantage through access to assets rather than ownership of them. Today the dynamics of competitive advantage have shifted once more. Although the industrial giants remained in place for a long time, companies such as Walmart, AIG, Enron, and Citigroup had joined them on the Fortune 500 list by 1995. With the advent of communications and computational technology, strategic advantage began to shift toward companies that leveraged information technology to provide services in addition to goods, and toward models that placed a value on information utilization in addition to product features and functions. Indeed, the Fortune 500 list of 1970 reveals the dominance of huge U.S.-based industrial players such as General Motors, General Electric, Exxon Mobil, and Union Carbide. In the early 1900s, for instance, companies that achieved economies of scope and scale through mass production were dominant, and they remained so right through the period after World War II. Over the years, we have seen systematic shifts in how companies create a strategically valuable position, often reinforced by the constraints of the systems within which they operate. A theory that works beautifully under one set may fall apart under another. The changing nature of competitive advantageĪny theory that seeks to explain cause-and-effect relationships operates within a set of constraints. Procter & Gamble has a similarly strong track record with Tide, Unilever with Dove, and PepsiCo with Tropicana orange juice. As BCG has shown, the candy company Mars has enjoyed very long product life cycles: Snickers and M&M’s (introduced in 19, respectively) are among the best-selling candies in the world today. The theory of cumulative advantage makes a lot of sense in what Martin Reeves and his colleagues at BCG call a classical strategic setting-one in which industry boundaries are clearly delineated, the basis of competition is stable, the environment experiences no major disruptions, and a strong competitive position, once created, can be sustained. That’s one reason the subscription model has become so popular in so many industries-it eliminates the need for customers to consciously decide about routine purchases and offers providers the lure of effortlessly recurring revenue. I completely agree with the authors that customers’ unconscious minds dominate their decision-making process-and I suspect that any company can benefit from making their routine choices easier, faster, and more convenient. And, as Lafley and Martin suggest, it has major implications for how products are developed and brands are managed. I love the notion that customers’ purchase decisions are more closely related to habit and ease than to loyalty-it brings much-needed insight from behavioral science to the study of consumer decisions.