All advantage is temporary. As a business you don’t stay ahead of the game for long, certainly not if you remain static for any length of time, if you think you’re at the top and you don’t need to keep moving.
But the ultimate advantage is achieved by choosing your high value competencies well and establishing how long to invest in them, as well as identifying which commodity competencies to divest. The faster the product life cycle the shorter the advantage.
In 1988 Kodak created the slogan “you press the button we do the rest” and from this a highly successful, integrated model was created maintaining an almost Neolithic control of the photographic market. This lasted until digital technology arrived, at which point they were completely overtaken. It is essential that an organisation becomes flexible enough to jump when required.
There is nothing more critical to a business than the development of an end-to-end competency chain from the supply of the initial raw materials, through to the end consumer. There is no single strategy, either developed by your business or bought in, that will stand the test of time. If as an organisation you want to achieve a competitive position you will need to identify your long term distinctive specialisation and your position within your network of diverse, but complimentary, specialist suppliers.
Diversified suppliers bring a wealth of experience from other customers: they provide an early warning platform and the ability to easily modify their existing, loosely coupled business processes. If you work with captive suppliers you will find that they often have hard wired business processes which makes innovation more difficult. The speed of learning is then the key source of advantage, and working in a less restricted network of suppliers gives you and them the space to innovate and to deliver clearly set performance targets. Furthermore; the scale you enjoy as diversified suppliers enables you to provide attractive career paths to retain your highly skilled employees.
When looking at your business as a whole, you need to decide how much of the past you should be take forwards and how much you should be review.
