The End of Competitive Advantage Critique

The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business by Rita Gunther McGrath

Critique

In the book, The End of Competitive Advantage: How to Keep your Strategy Moving as Fast as Your Business, by Rita Gunther McGrath, the author introduces the idea that in the current business environment, simply managing a business is insufficient to remain a leader among competitors. McGrath argues that without significant innovation, the current business environment no longer permits companies to attain a leadership position in an industry and then continue to dominate for years. From a personal standpoint, the book provides valuable insight and key points on weathering the effects of transient advantages when designing a strategy. McGrath reiterates that investing in new advantages and building a business around flexible resources is a fundamental requirement to adjust to the rapidly-changing business environment. When competitive advantages do not last, companies must be active in strategy-building and re-design. The resonating subject in the book is that companies must position themselves in a way that resources are easily re-allocated and quick to react to change. In the book, McGrath mentions that access to assets, instead of ownership, provides flexibility without having to commit valuable resources to acquire or operate these assets. If a company owns its assets, then its capital is tied up, liquidity is compromised, and a change in direction becomes more difficult and time-consuming. McGrath mentions that acquiring flexible assets is part of building an effective “disengagement plan”; consequently, an effective disengagement plan can evolve to become a competitive advantage. Also, McGrath reiterates that companies must have an effective plan of how to compete in a world where advantages are transient and ephemeral. McGrath argues that companies must abandon the traditional model of developing products and services across...