New Global Strategies for Competitive Advantage

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NEW GLOBAL STRATEGIES FOR COMPETITIVE ADVANTAGE

1. High intensity domestic competition breeds international success. 2. In the diamond-shaped chart, there are key elements of it success is to be sustained: Company strategy (structure and rivalry), factor conditions, demand conditions, related and supporting industries. 3. The home base shapes a company’s capacity to innovate rapidly in technology and methods and to do so in the proper directions. 4. A global strategy supplements and solidifies the competitive advantage created at home base. 5. The most important sources of national advantage must be actively sought and exploited. 6. Caught up in a never-ending process of seeking out new advantages and struggling with rivals to protect them. 7. Stability is valued in most companies, not change. Protecting old ideas and techniques becomes the preoccupation, not creating new ones. The long-term challenge for any firm is to put itself in a position where it is most likely to perceive, and best able to address the imperatives of competitive advantage. Expose a company to new market and technological opportunities that may be hard to perceive. Preparing for change by upgrading and expanding the skills of employees and improving the firm’s scientific and knowledge base. Overcoming complacency and inertia to act on the new opportunities and circumstances. Much attention has rightly been places on the importance of visionary leaders in achieving unusual organizational success. Great leaders are influenced by the environment in which they work. Innovation takes place because the home environment stimulates it. Innovation succeeds because the home environment supports and even forces it. The right environment not only shapes a leader’s own perceptions and priorities but provides the catalyst that allows the leader to overcome inertia and produce organizational change. Great leaders emerge in different industries in different nations, in part because national circumstances attract and encourage them In many industries, the national environment provides one or two nations with a distinct advantage over their foreign competitors. Leadership often determines which particular firm or firms exploit this advantage. The ability of any firm to innovate has much to do with the environment to which it is exposed. Seeking safe havens and comfortable customer relationship only reinforces past behavior. Innovation grows out of pressure and challenge. It also comes from finding the right challenges to meet. The main role of the firm’s leader is to create the environment that meets these conditions. 8. The new rules for innovation, a company should actively seek out pressure and challenge not try to avoid them. Part of the task is to take advantage of the home nation in order to create the impetus for innovation. Some of the ways of doing so are: seel to the most sophisticated and demanding buyers and channels seek out the buyers with the most difficult needs, establish norms of exceeding the toughest regulatory hurdles of product standards, treat employees as permanent, and establish outstanding competitors as motivators. 9. The true costs of stability.

Such a search for a quiet life, and understandable instinct, has led many companies to buy direct competitors or from alliances with them, in a closed, static world, monopoly would indeed be the most comfortable and profitable solution. In reality competition is dynamic. Good managers always run a little scared, they respect and study competitors. Seeking out and meeting challenges is part of their organizational norm. A firm need not exclusively serve demanding buyers nor should it compete head on with any rival. The aim in seeking pressure and challenge is to create the conditions in which competitive advantage can be preserved. In global competition, the pressures of demanding local buyers, capable suppliers, and aggressive domestic rivalry are even more valuable...
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