The new supercompetitors

Since the mid-1990s, the source of competitive advantage has been shifting. Leading companies used to be diverse conglomerates that based their competitive strategy on assets, positions, and economies of scale. Today’s market leaders, by contrast, are more focused enterprises. They do not follow the traditional portfolio strategies of seeking short-term profitability or growth wherever they can find it. Rather, they recognize that value is created by their distinctive capabilities: what they can do consistently well. Their strategic approach, which is based on a single powerful value proposition backed up by a few mutually reinforcing capabilities, gives them a continuing advantage over their rivals. As they consolidate their efforts around this approach, they fundamentally reshape their industries.

A supercompetitor is a company that, by competing successfully with its distinctive capabilities, changes the dynamics of its business environment. A capability, in this context, is the ability to consistently deliver a specified outcome relevant to the business. This takes place through the right combination of processes, tools, knowledge, skills, and organization, generally developed across functional boundaries. Supercompetitors are emerging today because, in industry after industry, their few distinctive capabilities are both scalable and relevant, while other forms of competitive advantage, like sheer size, have decreased in importance.

Source: The New Supercompetitors