Strategy's Biggest Blind Spot: Erosion of Competitive Advantage
Competitive advantage is eroding faster than most companies notice: the industry shuffle rate rose in over 60 percent of industries, yet few firms track their advantage market by market, and those that do outperform.
Summary
The authors measure the shuffle rate, the speed at which market leaders and laggards change places, and find it accelerating in more than 60 percent of industries over the past decade. A survey of 1,257 executives shows most do not monitor their advantage. Top-quintile growth and EBIT firms are 2.5 times as likely to be aligned on their advantages. Five rules follow: granular view, tailor to market, avoid overinvesting, embed it in decisions, and track signals.
Editor's opinion
Most companies fail to monitor competitive advantage erosion; top quartile performers are 2.5x more likely to track advantage decay across market segments — a precision gap that compounds over
Key concepts
Shuffle rate · Granular view of competitive advantage · Good-enough threshold · Return on competitive advantage · Market-level erosion signals