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Life Cycle Approach to Competitive Advantage
Geert van der Horst
Rita Gunther McGrath and Ian C. MacMillan in MITSloan Management Review Vol 50 No 3 mention the term Transient Competitive Advantage. I looked up the term "transient" and it means "valid for a limited time". The authors do not see Competitive Advantage as an ON/OFF phenomenon (in which you either have a competitive advantage or you don't), but as a wave, following a kind of product life cycle, with following phases: Launch, Ramp up, Exploitation and Erosion.
During the wave your competitive advantage varies in strength: it is weak in the beginning (launch and ramp up) then strong (exploitation) and then declines again (erosion).
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Transient Competitive AdvantageJuergen Peterke, Member I found these 4 phases mentioned by McGrath and MacMIllan as Transient Competitive Advantage very interesting. Thank you. |
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Life-cycle Approach to Competitive AdvantageGoodnews Cadogan I support the transient approach to competitive advantage.
The foundations thereof lie both in the internal environment (the organization dynamics and product performance), as well as in the external environment (the relevance of the product to the customers' needs, as well as emergence of other competing products, and services).
A CA can not be static in nature, unless you freeze these variables in time. Continuous observation of these dynamics, and responding to the changes through organization renewal and product improvements are making the competitive advantage evolve with time and with changing conditions. |
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