Sustaining Competitiveness via Cumulative Advantage
Over the years, we have seen gradual shifts in how companies create strategic positions, which often reinforces the systems they operate within. In the early 1900s, for instance, dominant industrial players such as General Motors, General Electric, and Exxon Mobil achieved economies of scope and scale through mass production.
With the advent of communications and computational technologies, consumer goods giants such as Walmart and P&G began to shift toward leveraging information technology to provide services in addition to products. Emphasizing information utilization in addition to product features and functions provides companies with a competitive advantage.
Today, competitive advantage has shifted once more. E-commerce conglomerates such as Amazon and Alibaba are achieving the competitive advantage through access to products rather than ownership of them. The huge size of their customer base and supply base creates a reinforcing, virtuous cycle of network effects. The larger the customer base a company has, the more familiar the product is to the market.
By being the early movers, these companies attained competitive advantage with their value propositions to consumers. The changing nature of competitive advantage has one constant—the trust and comfortability of products and services to consumers garnered by the value propositions that
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