New Bases of Competitive Advantage

New Bases of Competitive Advantage: The Adaptive Imperative is an article from the Boston Consulting Group about the changing nature of competitive advantage. It points out that the traditional bases of competition need to be supplemented by six new bases of advantage. One of them is adaptive advantage.

In the articles summary, it says: Competitive strategy has generally assumed relatively homogeneous competitors in stable industries, in which durable advantage comes from scale, position, or capabilities. Yet sweeping changes in the business environment argue for an “adaptive imperative” as a new way of acknowledging and unlocking the dynamic qualities of competition.

The first part elaborates on the traditional approach to strategy. This is based on preliminary static elements. Thus, traditional strategy-making is limited in its ability to produce results that fit evolving trends and a rapidly changing business system.

The article than suggests and explains six new bases of advantage to supplement the traditional ones. These are:

  1. Adaptive advantage: Organizations seek to develop the most favorable organizational context in which new approaches to new problems can continually emerge.
  2. Signal advantage: Detect, capture, and exploit information patterns for advantage
  3. Systems advantage: Shape and manage business systems for advantage
  4. Social advantage: Leverage new social and ecological expectations for advantage
  5. Simulation advantage: Apply simulation techniques to decrease the costs and increases the yield of experimentation
  6. People advantage: Leverage human resources beyond the firm’s boundaries for advantage

Each of these advantages is introduced and illustrated with a real-world example.

The value of this article is that it inspires strategists to add new elements to their analysis of competitive advantage. Not all of the supplementary advantages listed here may be equally relevant for all companies. There may be even more around. However, they introduce the “adaptive imperative” as a new way of acknowledging and unlocking the dynamic qualities of competition.

Link >> New Bases of Competitive Advantage: The Adaptive Imperative

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