Competitive Design

Competitive strategy is still design, but there are now more parameters--more interactions--to worry about. 

That difficult exercise was design.  But in seeking the best smile per dollar, we took a monopoly view.  Yes, we went beyond product to include manufacturing and distribution in the design, but our strategy was tuned to please the customer, not to deal with competition.  To deal with competition, expand your vision again to include other automobile companies.  Now you are looking for a competitive sweet spot.  You have to adjust the design--the strategy--to put more smile per dollar on a driver's face than she can get from competing products.  That driver might not be the young woman we first envisioned on the Angeles Crest Highway.  Another firm may more easily meet her demands, so a critical issue becomes the identification of the particular set of buyers--our target market--where we have a differential advantage.

Competitive strategy is still design, but there are now more parameters--more interactions--to worry about.  The new interactions are the offerings and strategies of rivals.  Very quickly, you are going to focus on what you, or your company, can do more effectively than others.  It will normally turn out that competition makes you focus on a much smaller subset of car models, manufacturing setups, and customers.

Describing strategy as a design rather than as a plan or as a choice emphasizes the issue of mutual adjustment.  In design problems, where various elements must be arranged, adjusted, and coordinated, there can be sharply peaked gains to getting combinations right and sharp costs to getting them wrong.  A good strategy coordinates policies across activities to focus the competitive punch.

ACTION POINT: A good strategy coordinates policies across activities to focus the competitive punch.