One if by land, two if by sea … risk and instability

We love it when Boston Consulting Group agrees with us. For over ten years we have told anyone who would listen that today’s market was no longer a stable reference from which to deduce product/market strategy, and that frenetic change was making it impractical for companies to maintain a sustainable competitive advantage based on the old approaches of product, service or manufacturing capabilities. Today, these are just too fleeting a source of sustainable advantage.

In a Harvard Business Review article from last year, BCG notes that market leadership change is increasingly dynamic. They cite the number of companies falling out of the top three rankings in their industry as increasing from 2% in 1960 (when the market was pretty stable) to 14% in 2008. They state: “Sustainable competitive advantage no longer arises exclusively from position, scale, and first order capabilities in delivering or producing an offering.”

As we note in our book, Value Acceleration, the ability to sense and respond, or as BCG calls it “read and act” is critical to success. A company’s ability to sense or read depends on ever-increasing skills and techniques in monitoring the “conversations” that are taking place in the marketplace. These skills are the result of having instituted stable sensing processes in the organization to supplant a no-longer-stable market as a reference.  The ability to respond or act comes down to having sufficiently flexible and adaptable product/market development processes to meet those frenetically changing demands and challenges. Since it is the front end of the process (true Marketing) that must sense and understand the “conversations” and drive the company’s ability to respond, it is here that great processes—great Marketing (in the true sense of the word) processes– can provide a sustainable competitive advantage.

Mitch & Ralph

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