Making the Shift from Sustainable to Transient Advantage

http://www.innosight.com/innovation-resources/strategy-innovation/making-the-shift-from-sustainable-to-transient-advantage.cfm#.Uf0nsY5XcVc.gmail

Whatever Rita McGrath does is worth your attention.

In her new book, "The End of Competitive Advantage," Columbia Business School professor and Innosight Fellow Rita Gunther McGrath argues that companies need to shift their strategy from long-term to transient edges in the marketplace... 

…The Holy Grail of strategy for many years has been defined as sustainable competitive advantage: you find an opportunity, you throw up entry barriers like crazy and then you get to enjoy it for a long period of time. But increasingly, this no longer works well or even makes sense, thanks to globalization, digital disruptions, and so on. So in response to this shift, organizations need to build up temporary or transient advantages where they seize opportunities, exploit them, and then move on quickly when they've exhausted the opportunity…. 

…One result of this shift to transient advantage is that is that innovation becomes more imperative, which means that organizations really do need to make it a routine capability, rather than pursue it in fits and starts. So you need a governance structure. You need a well-thought-out process for getting new ideas into the market quickly. You need a way of making sure that the funds are there in the right way.You need to create the right the incentives. 

How to Make a New Product Unique

http://www.strategy-business.com/blog/How-to-Make-a-New-Product-Unique?gko=2428c

This article is a definite read. The concept of marrying product attributes with unique capabilities sounds obvious but companies rarely put the two together.

 …two factors help a company stand out from the competition when introducing a new offering:
• Unique product attributes (difficult for rivals to copy), in technology, packaging, customer experience, or design
• Differentiated capabilities that create coherence in your company—an alignment between your business strategy and your portfolio of products
…. four-step strategy to create a great product coupled with a coherent capabilities system.
1. Articulate how your company or division’s innovation approach fits with its overall strategy. For example, is your company a premium or a value player, a technological pioneer or a fast follower? 

2. Identify the needs—articulated and unarticulated—of the particular consumers you have chosen to reach, and figure out how your new products can meet those needs 

3. Devise a group of differentiated innovation capabilities that will sustain those new products. For example, are you going to win by getting closer to the consumer using proactive market insights? Are you going to beat your competition with distribution through your superior front-of-store prowess? Will you employ claims-based research to out-market the upstarts? If these capabilities are too common and generic, your competitors will too easily copy them. If they are too complex and specialized, you may destroy your margin value. Try to find capabilities that complement one another so that they are mutually reinforcing and make the most of your investment in them. 

4. Remember that not every product will be wildly successful. Fail fast, fail cheap, and create a culture of thoughtful risk taking.

New York Times Company Posts a 2nd-Quarter Profit
By CHRISTINE HAUGHNEY
Published: August 1, 2013

http://www.nytimes.com/2013/08/02/business/media/new-york-times-company-swings-to-a-profit.html?_r=0

The sale of the iconic brand The Washington Post created enormous discussion this past week. The challenge faced by these leading companies in markets that are dramatically changed due to technology is profound. This article talks about efforts made by another iconic brand, The New York Times. Basically, the effort seems to be changing and re-branding the delivery method for its profound content. The content is still the key to their future success and whether people will pay for it on line. I do and it is well worth it:

• The New York Times Company swung to a profit in the second quarter on stronger circulation revenue and lower operating costs, but continued weakness in advertising weighed on results.
• Print advertising at the company’s newspapers, which include The New York Times, The Boston Globe and The International Herald Tribune, declined 6.8 percent, and digital advertising fell 2.7 percent. Digital advertising now accounts for 24.7 percent of the company’s total advertising revenue.
• The number of paid subscribers to the Web site, e-reader and other digital editions of The Times and The International Herald Tribune grew to 699,000, a jump of more than 35 percent from the period a year earlier
• Since Mr. Thompson joined The Times in November, he has focused on re-branding The Times as a global operation.
       o the company announced it would sell the New England Media Group, which includes The Boston Globe, Boston.com, The Worcester Telegram & Gazette and Globe Direct, a direct-mail marketing company. Bids for the properties were due in July but a sale has not been announced.
               o The Times also announced in February that it would rename The International Herald Tribune, its 125-year-old newspaper based in Paris, The International New York Times. It also will unveil a new Web site for international audiences in the coming months.
• The company has also continued to increase its plans to charge readers for content. In June, the company started to charge non-subscribers who want to read more than three articles a day on The New York Times apps for mobile devices.

Leadership In Action Series: Thomas L. Friedman
The Aspen Institute

I normally do not post videos but I believe this is so fundamental on  personal and business levels that you MUST take the 35 to 45 minutes it takes to watch this. It is NOT about politics. As business leaders, you must clearly understand the dynamics that Friedman is discussing.

http://www.youtube.com/watch?v=2vcggLol64E&feature=player_embedded