From the course: Developing a Competitive Strategy
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Competitive advantage is never permanent
From the course: Developing a Competitive Strategy
Competitive advantage is never permanent
- One of the biggest mistakes that successful companies make is to become fat, dumb and happy. Look at the retailer Kmart. Both Kmart and Walmart were founded in 1962. 20 years later, Kmart was actually bigger than Walmart yet by 2000 Walmart would far outdistance Kmart. Since then the gap between the two has actually widened rapidly. As another example, look at Nokia in mobile phones. As recently as 2008, Nokia was the global giant with a nearly 40% share of the worldwide mobile phone market. Barely five years later, facing an onslaught from Apple and Samsung, Nokia was struggling to survive and had to sell itself to a richer parent such as Microsoft. The dire alternative was to keep withering away and die. As the Kmart and Nokia examples vividly illustrate, competitive advantage is never permanent. Every company must always be on the lookout for four types of disruption. Each type of disruption can pose a potentially serious threat to competitive advantage. However, viewed…
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