More on this book
Community
Kindle Notes & Highlights
back from lead customers or proprietary information gleaned from its own internal operations.
Important point here, especially if developments are published and become public knowkedge. Need to match science with customer insights.
One way to find fresh undefended high ground is by creating it yourself through pure innovation.
The other way to grab the high ground—the way that is my focus here—is to exploit a wave of change. Such waves of change are largely exogenous—they are mostly beyond the control of any one organization.
You exploit a wave of change by understanding the likely evolution of the landscape and then channeling resources and innovation toward positions that will become high ground—become valuable and defensible—as the dynamics play out.
To make good bets on how a wave of change will play out you must acquire enough expertise to question the experts.
Each guidepost is an observation or way of thinking that seems to warrant attention.
escalating fixed costs.
deregulation.
predictable biases in fo...
This highlight has been truncated due to consecutive passage length restrictions.
incumbent r...
This highlight has been truncated due to consecutive passage length restrictions.
attractor...
This highlight has been truncated due to consecutive passage length restrictions.
The simplest form of transition is triggered by substantial increases in fixed costs, especially product development costs.
Interesting, especially in growing scale market. Competitive landscape can begin to consolidate as smaller, slower players go bust. Opprotunity for new product with scale and lower fixed costs to compete?
transitions are triggered by major changes in government policy, especially deregulation.
predictable biases in forecasting.
people rarely predict that a business or economic trend will peak and then decline.
Bias blind to sales cycles or known trends in goods. Can be easily avoided with good understanding of product life cycle
Another bias is that, faced with a wave of change, the standard forecast will be for a “battle of the titans.”
A third common bias is that,
the future winners will be, or will look like, the current apparent winners.
To avoid this bias requires a deeper understanding of competitors actions followed by deep dive into emerging shifts/waves. In a stable time, this bias is okay as long as you understand why the leaders works. In turbulent times, need to understand the shifts happening.
we expect incumbent firms to resist a transition that threatens to undermine the complex skills and valuable positions they have accumulated over time.
attractor state describes how the industry “should” work in the light of technological forces and the structure of demand.
an evolution in the direction of efficiency—meeting the needs and demands of buyers as efficiently as possible.
An attractor state provides a sense of direction for the future evolution of an industry.
Two complements to attractor-state analysis are the identification of accelerants and impediments to movements toward an attractor state.
One type of accelerant is what I call a demonstration effect—the impact of in-your-face evidence on buyer perceptions and behavior.
As an example of an impediment,
The major impediment to the U.S. power industry moving in this direction is the convoluted and highly uncertain licensing process—at
Inertia and entropy have several important implications for strategy:
Successful strategies often owe a great deal to the inertia and inefficiency of rivals.
Understanding the inertia of rivals may be just as vital as understanding your own strengths.
An organization’s greatest challenge may not be external threats or opportunities, but instead the effects of entropy and inertia.
Organizational inertia generally falls into one of three categories: the inertia of routine, cultural inertia, and inertia by proxy.
The problem at AT&T was not the competence of individuals but the culture—the work norms and mindsets.
Now, with deregulation, competition, and the soaring opportunities in mass-market computing and data communications, this way of doing things was a huge impediment to action.
The first step in breaking organizational culture inertia is simplification.
Strip out excess layers of administration and halt nonessential operations—sell
After the first round of simplification, it may be necessary to fragment the operating units.
The triage must be based on both performance and culture—you
In general, to change the group’s norms, the alpha member must be replaced by someone who expresses different norms and values.
All this is speeded along if a challenging goal is set.
customers’ inertia—a form of inertia by proxy.
a rival could poach customers away from PSFS without triggering a competitive response.
Because of psfs inertia by proxy
Inertia by proxy disappears when the organization decides that adapting to changed circumstances is more important than hanging on to old profit streams.
the kernel of a good strategy at work:
diagnosis, guiding policy, and coherent action.
evident that chips would eventually get fast enough to do good 3-D graphics on a PC.
Attractor state or wave? First sign of inflection point in computer graphics technologies/industry
When a product gives a buyer an advantage in competition with others, there will be an especially rapid uptake of the product.
So far, possibly a focus in graphics cards for computer games, especially online competitive games. No wave, but some demand
new multimedia standard.
Opportunity to become the standard on a growing wave/demand for multimedia. Opportunity with strong network effect (strong complimentary)
no better than the fast-moving competition’s, and its quirky 3-D graphics approach did not catch on.
Wrong market, no competitive advantage
focus on 3-D graphics for desktop PCs.
the company would embrace the SGI-based triangle method.
Gave up propiretary technology for better protocol and validated product. Competitive advantage wasnt proprietary tech but design/limited expertise
