The Future of Competitive Strategy

Introduction

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©2022 MIT. This excerpt is from The Future of Competitive Strategy by Mohan Subramaniam, published by The MIT Press.

ecosystems displace industries as a firm’s principal business environ- ment and competitive arena.

The Need for New Mindsets Consider how this change from traditional strategy to digital strategy plays out for Ford as it plans to offer self-driving fleets in the coming years with fully autonomous cars. 17 Ford anticipates future customers preferring subscription-based services for car usage over car ownership. For example, a user could opt for a service whereby an autonomous car arrives when needed, is aware of the user’s schedules, plans itineraries for different destinations, and is able to customize offerings for a variety of lifestyle needs, such as stops at favorite coffee shops or stores or tun- ing in to personalized news, videos, or music during the ride. In such a scenario, the data management attributes of cars become more important than their physical attributes. Users may not care as much about which particular brand or model of a car arrives for their ride, instead valuing more the data-driven services offered by the ride. Consequently, the digital ecosystems that provide Ford the opportu- nities and strengths to offer such data-driven services become more important than the attributes of its traditional industry. Indeed, the boundaries of such digital ecosystems—encompassing all the entities that can generate and share data for the car’s new data-driven services—­ transcend the boundaries of the traditional automobile industry. Furthermore, competing in digital ecosystems changes many under- lying premises associated with competing in industries. Rivals now are firms that have similar access to data, not just firms that offer similar products. Ford encounters new rivals such as Waymo, the self-driving car technology firm launched by Google parent Alphabet, and Uber, which compete with similar access to data and with different capabili- ties of managing data-driven services. Many of Ford’s traditional indus- try rivals, if they continue offering just products, lose their competitive relevance. With a shift in its competitive focus to data-driven services, Ford now needs new capabilities to manage digital platforms. Its prevailing