The Future of Competitive Strategy

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Introduction

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

Meeting this challenge requires three key inputs: first, a new under- standing of how digital technologies have transformed prevailing ways of utilizing data; second, a fresh comprehension of business environ- ments as digital ecosystems; and third, new mindsets and frameworks for a strategy that builds a data-driven advantage for competing in digi- tal ecosystems. The purpose of this book is to provide insights into how firms can draw competitive advantage from data. It draws attention to the new competitive dynamics of the modern digital world and explains how a firm can establish an advantage in it using its own or others’ data. The book serves as a guide for firms to shape their digital transformation journeys and to envision and execute their modern-day digital strate- gies. This introduction explores the foundational concepts and lays the groundwork for subsequent chapters. To get some grasp of the task ahead, let’s consider some of Ford Motor Company’s new initiatives as it adapts to a changing business land- scape. A doyen of the industrial era and one of the original champions of the automotive industry, Ford in 2018 pledged $11 billion toward its digital transformation efforts, planned for a ten-year span. 4 One of the underlying features of its digital initiatives is an expansive adoption of sensors installed in Ford vehicles that generate data from a vast array of sources. Sensors that detect and capture in real time the status of engine performance, braking performance, tire pressure, road conditions, and air quality are some examples. Ford’s sensors can send data updates at rates of up to fifty times per second. In one hour of driving, they gener- ate around 25 gigabytes of data. 5 With these data, Ford is able to offer several new “smart” car fea- tures. Cars can detect and alert drivers to other vehicles in blind spots. They help drivers stay in their lanes. They automatically brake before imminent collisions. They adapt to speed limits (with the driver’s con- sent) and decelerate when detecting slowing traffic ahead. Electric cars The Ford Motor Story