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Management article
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Reference no. BH022
Published by: Indiana University
Published in: "Business Horizons", 1995

Abstract

In theory, mastery of a single competency provides a distinct niche in the marketplace. In practice, today''s global competition is more dynamic and multidimensional than those models suggest. The mature industry paradox is that leadership demands differentiation, yet differences are quickly copied. Single-factor innovations tap one competency, and capable competitors can usually match it. Multiple competencies strengthen several dimensions and in effect redefine the basis of competition. The "shadow strategy task force" is offered as a method to force managers to relinquish the comfort of the firm''s accepted view of itself. This approach begins with the objective of identifying the strategies and competencies that, in the hands of competitors, might be used to attack the firm''s competitive position successfully. Especially critical on the task force are individuals with insight into how customers, suppliers, and competitors view the firm''s products and services. Developing new competencies requires constant experimentation. The innovation-imitation- equilibrium cycle suggests that industry leaders teach customers what to demand by defining the current state of the art in performance, price, service, and other dimensions; customers learn to judge competitive offerings against these standards, and the learning effect is cumulative.

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Abstract

In theory, mastery of a single competency provides a distinct niche in the marketplace. In practice, today''s global competition is more dynamic and multidimensional than those models suggest. The mature industry paradox is that leadership demands differentiation, yet differences are quickly copied. Single-factor innovations tap one competency, and capable competitors can usually match it. Multiple competencies strengthen several dimensions and in effect redefine the basis of competition. The "shadow strategy task force" is offered as a method to force managers to relinquish the comfort of the firm''s accepted view of itself. This approach begins with the objective of identifying the strategies and competencies that, in the hands of competitors, might be used to attack the firm''s competitive position successfully. Especially critical on the task force are individuals with insight into how customers, suppliers, and competitors view the firm''s products and services. Developing new competencies requires constant experimentation. The innovation-imitation- equilibrium cycle suggests that industry leaders teach customers what to demand by defining the current state of the art in performance, price, service, and other dimensions; customers learn to judge competitive offerings against these standards, and the learning effect is cumulative.

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