A low barrier to entry does not prevent existing and prospective competitors from entering the race for the same profitable business. Similarly, in order for the knowledge-based competitive advantage to be sustainable, it must be difficult for anybody else to import or create the knowledge. In an era in which knowledge quickly gets obsolete, the only way an organization can stay at the top of competition all the time is to constantly renew and expand its knowledge base. A steel manufacturing company called Nucor Corp. (www.nucor.com ) and the most envied Google pop up in my mind on this point.
Nobody can afford basking on its past or current success for too long a time and still expect to be a model business. Just like the earth never stops revolving aroung the sun, a business must constanly move along the right direction and do so in the right way. This is just how the reality work. Calling it challenge or calling it fun doesn't change the basic nature of competition. Asking why doesn;t help. It's easier to deal with you own perspective.
The only way to sustain competitive advantage is to constantly recreate competitive advantage. This is equally applicable to a society, a firm, a department, and an individual.
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5 comments:
Dr. Jih,
I agree completely with your perspective on this issue. I work for Ford Motor Company and the situation that you describe in your posting is precisely where my employer finds itself and as a result, the company is currently engaged in the most difficult fight of its storied history. It is commonly upon agreed that Ford was quite content with the way it has historically done business with respect to its product offerings and the ability to retain top talent. While this was taking place, its foreign competitors realized that the way to succeed in the North American automotive industry was to appeal to the changing styles while still providing top level quality in its products. At the same time the competitors were offering environments conducive to creativity without constraint or financial limitations of its counterparts. It is almost as if they sat back and assessed how the domestic companies were handling their operations and went in the complete opposite direction. As a result, Toyota is now poised to become the number auto manufacturer in the United States already surpassing Ford and closing fast on General Motors. I will touch more on this during my presentation Thursday.
Dr. Jih,
I also agree with what this post, and the previous poster. For the past 5 years, I worked for an electrical company called "Pan American Electric". Pan American got many of the big jobs in the Nashville, or southeast, area for over twenty years. The company was the top grossing electrical company in this area for these twenty years. In the past three years, the company has faced many problems. They lacked innovation. The company didn't evolve around its current and upcomming competitors. Pan American stopped receiving the big contracts from colleges and hospitals that they had in the past. Also, employees that had been with the company for well over 10 years began leaving the company to work for competitors. Eventually, the company was bought out by a now bigger electrical company.
If the company had hired a knowledge management expert, or director of types, to come into the company and help the executives lead the company, the company might have survived. It would have been a good idea for the executives to take a class like your 3500 class, to show them that staying with the same twenty-year-old gameplan does not work in today's competitive market.
Brian Moses-
How sad it is to see once successful companies fail to make it in the new knowledge economy! It's easy to blame competition or other external threats for the trouble or difficulty. However, it is the kind of companies like Nucor Steel (www.nucor.com) that have demonstrated the most effective approach to staying in business is relentless innovation and disciplined execution of innovative strategies. We must continue to learn new "tricks" as long as we are still around. And we really can not afford taking anything for granted.
Dr. JIH,
Your knowledge about competitive advantage is very strong. The sentence that caught my attention the most was "The only way to sustain competitive advantage is to constantly recreate competitive advantage." That sentence really sums it all up to what competitive advantage is all about. Hope to hear more in class.
You write very well.
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