The Harvard Strategy Guru Errs When He Says Partnerships Erode Competitive Advantage, the Author Contends. Instead, They Are Now Central to Business Success.
Rethinking
(or Why Michael Porter Is Wrong about the Internet)
by Don Tapscott
strategy + business issue 24
content strategy & competition
1
ina Netw
The Harvard strategy guru errs when he says partnerships erode competitive advantage, the author contends. Instead, they are now central to business success.
Strategy orked World
For decades, the starting point for strategic thinking
content strategy & competition
2
has been the stand-alone, vertically integrated corporation. These powerful companies do everything from soup to nuts and dominate the competitive landscape. We think of them as intrinsic to the economy, and they provide the context for theories about competitive strategy. Companies prospered with this model of production because it was cheaper and simpler for them to perform the maximum number of functions in-house, rather than incurring the high cost, hassle, and risk of partnering with
outsiders to execute vital business activities. This is no longer true. The CEO of Boeing Company says his company is no longer an aircraft manufacturer; it has become a systems integrator. Mercedes-Benz doesn’t build its own E Class cars; the Magna Corporation does the work, including final assembly. IBM has become a computer company that doesn’t really make its computers; its partner network does. Indeed, we are seeing spectacular growth in contract
Illustration by John Hersey
Don Tapscott (dtapscott@ digital4sight.com) is president of the New Paradigm Learning Corporation and co-founder of Digital 4Sight, a company that designs and implements new business models for corporations. He is the coauthor, with David Ticoll and Alex Lowy, of Digital Capital: Harnessing the Power of Business Webs (Harvard Business School Press, 2000).
3
manufacturing — with companies such as Celestica, Flextronics, and Solectron partnering with computer and telecommunications vendors to provide core electronics manufacturing services. Virtually
(or Why Michael Porter Is Wrong about the Internet)
by Don Tapscott
strategy + business issue 24
content strategy & competition
1
ina Netw
The Harvard strategy guru errs when he says partnerships erode competitive advantage, the author contends. Instead, they are now central to business success.
Strategy orked World
For decades, the starting point for strategic thinking
content strategy & competition
2
has been the stand-alone, vertically integrated corporation. These powerful companies do everything from soup to nuts and dominate the competitive landscape. We think of them as intrinsic to the economy, and they provide the context for theories about competitive strategy. Companies prospered with this model of production because it was cheaper and simpler for them to perform the maximum number of functions in-house, rather than incurring the high cost, hassle, and risk of partnering with
outsiders to execute vital business activities. This is no longer true. The CEO of Boeing Company says his company is no longer an aircraft manufacturer; it has become a systems integrator. Mercedes-Benz doesn’t build its own E Class cars; the Magna Corporation does the work, including final assembly. IBM has become a computer company that doesn’t really make its computers; its partner network does. Indeed, we are seeing spectacular growth in contract
Illustration by John Hersey
Don Tapscott (dtapscott@ digital4sight.com) is president of the New Paradigm Learning Corporation and co-founder of Digital 4Sight, a company that designs and implements new business models for corporations. He is the coauthor, with David Ticoll and Alex Lowy, of Digital Capital: Harnessing the Power of Business Webs (Harvard Business School Press, 2000).
3
manufacturing — with companies such as Celestica, Flextronics, and Solectron partnering with computer and telecommunications vendors to provide core electronics manufacturing services. Virtually