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Competitive strategy played out in capabilities space has the same form as that in product/segment space. The major difference is that because this mode of competition in much less mature, the predominant forms are the Identification of White Space and the Pre-emption of Disputed Space, rather than the endless blocking and tackling for minor strategic gain so characteristic of the (largely stalemated) confrontations in product/segment space. This revives old fashioned strategy concepts, not least of which is the Experience Curve. The difference is simply that the curve now applies to capabilities, rather than unit costs (and, as we shall see, to platforms, rather than to products). Note that the dimensions of this graph are arbitrary. Any two (groups of) capabilities will do. Can (should?) this analogy be elaborated upon? Are there others? -*- Icon Standardization THE CONCEPT OF STRATEGY HENDERSONS CENTRAL IDEAS . . . . . . . . . . Real Unit Cost Cumulative Experience (85% slope) . . . . . Profit Market Share The Experience Curve The Value of Market Share The Corporate Portfolio Relative Market Share Market Growth PORTERS CENTRAL IDEAS Entry Barriers Economies of scale Proprietary product differences Brand identity Switching costs Capital requirements Access to distribution Absolute cost differences: Proprietary learning curve Access to inputs Product design Government policy Expected retaliation Supplier Power Input differentiation Seller switching costs Presence of substitutes Supplier concentration Importance of volume Cost relative to total purchases Threat of forward integration Industry Rivalry Industry growth Fixed cost / value added Intermittent overcapacity Product differences Brand identity Switching costs Concentration balance Information complexity Diversity Corporate stakes Exit barriers Buyer Power Bargaining leverage Buyer concentration Buyer volume Buyer switching costs Buyer information Ability to backward integrate Substitute produ
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