Strategy in the Modular Economy

“Modular economy”? What, the economy now comes in easy-to-assemble pieces from Ikea?

Yes, except for the Ikea part. And it makes a difference in strategy for everyone from entrepreneurs to investors to competitors.

There was a time when vertical integration was in vogue. Ford, for example, could transform raw materials out of the ground into finished vehicles at its gargantuan (1½ square miles!) River Rouge Complex.1 Vertical integration is attractive because you control everything and it’s hard for competitors to duplicate. The downside is that it can be hugely expensive, difficult to modify or update, and hard to manage. Ford found it so. Other than a 3,000-place parking lot for a nearby Ford facility, the old Rouge was gone as of 2008.

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The Most-Absurd Strategies of 2014

Behind every strategy there is competition for something: votes, power, profit, fame, etc.

Behind every strategy there is also a rationale, a reason why someone thinks it will work better than the alternatives.

People succeed (and fail) with wildly different strategies. But some strategies go further. They don’t make you think wow, that’s out of the box. They make you think yikes, you’re out of your mind.

Here is our end-of-year, politically incorrect review of absurd strategies. Remember: you don’t have to agree with us. We don’t even agree with each other, except maybe on a couple.

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Uber: Or, What’s Kosher in Competing?

Part One: The Attacks on Uber are Backfiring

By Ben Gilad

We are trained to think competition means offering customers better product or service than our rivals’. Based on this business-school perspective, we look for companies to use innovation, speed, service and other familiar factors to create competitive advantage.

How 2004 of us. In 2004, Elon Musk showed that using government and riding a favorite cause for the ruling party pays handsomely. (See Best Companies to Work For.) It is not that companies didn’t know that competition involves paying attention to regulators and lawmakers; it is that Elon Musk made it both an art form and a crucial element in his strategy. Without government subsidies, Tesla might have become a modern Tucker for all I know. (Never heard of a Tucker? That’s the point.)

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Camry Wins After Camry Loses

USA Today, MotorWeek, Cars.com, and an actual family tested and ranked family-sized, moderately priced sedans. The resulting article, originally published with the suspense-ruining headline “Winner is Hyundai Sonata Sport,” compared the Hyundai Sonata (who knew?), Chevrolet Malibu, Chrysler 200, Ford Fusion, Honda Accord, Mazda 6, Nissan Altima, Toyota Camry, and Volkswagen Passat.

I rate the results merely semi-interesting. The real story, though, is not about the cars. The real story is about the manufacturers and consumers. So here is what I learned from that riveting story investigating back-seat space and “giant grilles,” among other things of cosmic significance.

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Succeeding without Competing

The success most important to you may come not from comparing yourself to others but from doing what you want. Succeeding without competing is possible when we look inward. 

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Look at your life. What’s the sweetest success you have experienced?

Bring up the memory of that event or feat. Savor it. Think of what you did to achieve it; think of how you worked, struggled, and risked; think of how you felt when your goal was finally in your grasp. Re-experience your glory, pride, and joy. Let your heart swell and your face smile.

I had an experience like that a few weeks ago. It taught me a lesson about competing.

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Why Strategies Fail

No one adopts a strategy expecting it to fail, yet strategies fail. That doesn’t happen on purpose but it also doesn’t happen by accident.

Christele Canard, founder of Switched On Leadership, interviewed Competing.com co-founder Mark Chussil for the cover-story subject why strategies fail. You can read and download their wide-ranging discussion here.

Christele and Mark talk about:

  • Why smart strategists believe their strategy will work and what happens when they find out in business war games that it won’t.
  • What happened when Mark built a strategy decision test technology (patent pending) and his own strategies didn’t work so well. (Hint: first, he looked for a bug in the software. There was no bug.)
  • Why people are so comfortable thinking inside the box and what it takes to get them to go outside.
  • What’s wrong with “I did this and the result was that” reasoning.
  • How people can expand their strategic thinking with a simple question.
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