Download Competitive Strategies: Managing the Present, Imagining the by Enrico Valdani, Alessandro Arbore (auth.) PDF

By Enrico Valdani, Alessandro Arbore (auth.)

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Firms are therefore reluctant to change; three different reasons explain why: 1. The first reason is a rational one, deriving from the fear of triggering a process of cannibalization and depletion of the sources of competitive advantages and thus the value of the firm. 2. The second, a more emotional reason, arises from excessive veneration of the customer. This engenders a short-term orientation focused on maximum customer satisfaction, and favors incremental improvement of the current strategy.

A novel example is Visa, the credit card giant. For over thirty years Visa was a non-profit institution connecting 21,000 banks on a global level and offering its customers approximately one billion cards accepted in more than 14 million commercial establishments. Although at the end of 2006 Visa announced it was formally transforming its structure from a “membership association” to a “global public corporation”, the cooperative nature of this immense network remains intact. In the game of cooperative movement, the first mover creatively develops its intuition, generating benefits for all participants in the association who agree to support the new market creation strategy.

Likewise, the same discomfort arises with the idea of discontinuity, the interruption of routine. Firms are therefore reluctant to change; three different reasons explain why: 1. The first reason is a rational one, deriving from the fear of triggering a process of cannibalization and depletion of the sources of competitive advantages and thus the value of the firm. 2. The second, a more emotional reason, arises from excessive veneration of the customer. This engenders a short-term orientation focused on maximum customer satisfaction, and favors incremental improvement of the current strategy.

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