MKC3140 Final:
11 Feb 2019
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MKC3140 Strategy Notes
First Principle #3: All Competitors React
• Competitors are always copying successful strategies and innovating
new ones
o Only one firm remains from the original Dow 30 firms (GE)
o Given enough money and time most strategies can be copied
• Thus, companies need to build a “barrier” to being copied, giving them
time to adapt to innovation by others
• These barriers are termed sustainable competitive advantage (SCA)
and are critical to long-term superior financial performance
• SCAs must meet 3 conditions:
1. Customers care
2. Company does “it” better than competitors
3. Hard to duplicate
• Technology, customers, and business environments keep changing, and
among these changes, a firm’s competitors are constantly trying to create new
ways to satisfy customers’ needs and desires.
• Those efforts have great potential to disrupt the firm’s market position.
• The more successful a firm is, as reflected in its sales, profits, and stock
prices, the more effort its competitors expend to attack its financially
successful position.
