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In any thriving economy, healthy business competition plays a crucial role. It is widely acknowledged that when companies compete for customers, it leads to lower prices, higher quality goods and services, greater choices, and an inevitable increase in innovation.

 Over the years, we have witnessed five distinct movements in the way companies compete, and as we look ahead, we can anticipate a new movement through the continuing exciting saga in generative artificial intelligence (AI) race that has already begun.

“Those who cannot remember the past are condemned to repeat it.”

George Santayana

As a matter of interest and fun-fact for Millennials and Gen Z, the chronicle of strategic business focus over the many decades historically may be of some interest how business management and philosophy began, and how and where present technological innovation will lead us in 2023 and beyond.

1. Efficiency: The Foundation of Competitive Advantage

The first movement that revolutionized competition was efficiency. With the formation of corporations, the focus shifted to streamlining the production process, minimizing wasted time, materials, and labour. This approach, often referred to as “Taylorism,” turned business into a science of efficiency. Even today, many companies continue to compete on this front, employing strategies such as business process reengineering and lean production. However, as technology advances, efficiency alone is no longer sufficient for sustainable competitive advantage.

2. Scale: Leveraging Economies of Scale

Closely linked to efficiency, the second movement is scale. Companies leverage economies of scale to achieve lower unit costs, enabling them to offer competitive pricing for their products and services. The concept gained significant traction during the 1970s when the Experience Curve was adopted as a strategy tool in corporate boardrooms. Scale drove industry consolidation and globalization throughout the mid-twentieth century and remains prevalent today in sectors like steel, airlines, pharmaceuticals, and telecommunications. However, with the rise of digital disruption, scale alone may not guarantee long-term success.

3. Quality: Shifting Focus to Product Excellence

The early 1980s saw the rise of the quality movement. W. Edwards Deming championed quality as a way of life for Japanese companies, playing a pivotal role in Japan’s economic ascension. The emphasis on quality led to a shift to “Made in in Japan” as a symbol of superiority. Concepts like Six Sigma quality control gained popularity, particularly after their adoption by companies like GE. Today, quality, efficiency, and scale, particularly, in the manufacturing sector, coexist as competitive strategies, with companies differentiating themselves through superior product and service offerings.

4. Network: Competing through Connectivity

The fourth movement, born in the 1990s, was the network way of competing. Rather than competing based on cost or quality alone, companies started vying for customers based on the number of people or businesses using their products or services. This movement paved the way for the success of companies like Google, Facebook, and LinkedIn, which were built on the foundation of network competition. However, the network approach also has limitations in terms of sustaining a competitive advantage in rapidly evolving markets.

5. Ecosystem: Collaborating for Customer Value

Building upon the network movement, the fifth movement emerged: the ecosystem way of competing. This approach involves collaborating with third parties to expand and enhance the utility of products and services, benefiting customers. The number of partners working with or on top of a company’s offerings becomes a key advantage. Industries like newspapers, magazines, railroads, telecoms, and professional sports leagues have long utilized subsidized networks to enhance customer service and experience. However, effective ecosystem collaboration requires careful management and alignment of interests among participants.

The Future of Business Competition

As we look ahead, the question arises whether a sixth movement will shape the corporate world. Several postulation are worthy of proof and evidence.

1. Agility

Originating from the world of software development, agility is making its way into the broader business concept of business digitalization and transformation. Gaining a competitive edge by being faster to adapt and change becomes increasingly crucial in dynamic markets.

2. Disruption

Reimagining established business models in specific industries has become a commonly cited approach to competition. Companies that challenge the status quo and embrace disruptive innovations may gain a significant advantage when speed to market gives rise to first mover advantage.

3. Data Analytics

Companies heavily investing in data and analytics to drive operational efficiencies, exploit scale, and create high-quality, tailored products, services for better customer engagement experience outcome. The growing demand for data analytics and data scientists signifies the growing significance of data to augment marketing functions in organizations to make informed decisions for successful business outcomes with their target audience.

4. Integration

An old-fashioned derivative of efficiency and scale, integration is experiencing a resurgence. Some companies are expanding “upstream” or “downstream” to secure their supply chains or enhance customer experiences. The “Full Stack” business model coined in Silicon Valley describes vertical integration in the digital movement across distribution channels and digital platforms to optimize impressions and familiarity.

Way Forward

As we witness a bevy of competitive strategies, it is that clear business competition in the present and not too distant future has become increasingly complex. Business leaders must rely on their corporate strategies as constant guiding compass to overcome the overwhelming speed of change in the business landscape they compete in.

It is essential not to succumb to a specific way of competing merely because others are adopting it. Unique strategies tailored to specific circumstances are vital for sustainable success, incorporating a mix of movements that align with organizational goals and aspirations.

The seventh movement in the race on generative artificial intelligence adoption, in my opinion, will be a prominent feature in business competition and in the landscape they compete in over the next five years, opening both new possibilities and challenges for business leaders. By embracing the right competitive movements and leveraging emerging technologies, companies can position themselves for success in the dynamic and evolving marketplace of the future.

Whether or not the present generation is conscious of the new movement that is already in motion, access to generative artificial intelligence is already accessible from the handheld device we conveniently use daily in the palm of our hands. The future is now here. Don’t leave home without it!