The Future of Competitive Strategy

Introduction

19

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

Table 0.3 Evolution of concepts and the need to change strategic mindsets

Traditional Competitive Strategy Premises

Modern-Day Digital Strategy Premises

Concept Domain

Competitive Instrument Business environment Capability repositories

Product

Data

Industry

Digital ecosystems

Value chains

Smart value chains and digital platforms

Barriers to competition Scale

Network effects

Value provided by customers

Buy products

Buy products and provide interactive data

Competitors

Product rivals

Data rivals

prevailing industry concepts lose all relevance. These concepts help firms maintain their product-based strengths. They are important. They provide a base for firms to build the new resources required to compete in digital ecosystems. These prevailing strengths also can help firms pivot into new positions of strength. Ford’s brand and large customer base, for example, can be turned to help develop popular platforms with strong network effects. While this book is primarily about digital competitive strategy, it also reviews some key concepts of traditional competitive strategy to underscore both their differences and their interdependence. Going forward, firms will have to balance their tradi- tional strengths and ways of thinking with fresh ones as they find ways to adapt to their unique competitive contexts. This book provides the information firms will need to chart such a path forward. Through these chapters a reader will receive answers to many questions: How should firms build new data reserves? How do they entice customers to provide interactive data? How do they build new digital ecosystems that are best suited for their business? How do they retain their prevailing product strengths even as they search for new sources of value in their digital ecosystems? What strategy should firms adopt to harness data in their production ecosystems? What strategy should they adopt in their consumption ecosystems? How can firms extend their products into platforms? How should they compete