Evergreen Insight

Competitive strategies for managing the present and imagining the future

This section, to mark 50 years since the founding of SDA Bocconi, presents a selection of the ideas advanced by faculty members representing seminal work in management research: relevance, concreteness, scientific rigor, and impact on the community are the four pillars underpinning the path proposed here. The SDA Insight initiative is part of the broader project, “50 Years of Ideas.”

Organizational life is replete with paradoxes. The biggest is reconciling the ordinary management of daily work with the development of autonomous thoughts and original actions. Another, no doubt, is having to “think global, act local,” as well as striving to grow in a growth-less market context.

Managing the present and imagining the future is another one of the many paradoxes that proactive firms are grappling with, and the title of our 2013 book: Competitive Strategies. Managing the Present, Imagining the Future.

Planning for the future is a process linked to the creativity of strategic thought, the ability to break with convention and shake up the status quo. But managing the present, in contrast, means solving problems that come up in daily routines. Living with this paradox, in the hyper-competitive markets where most businesses operate, is no longer an option. Instead, each company has to learn how to face the present and, at the same time, leave room for “strategic speculation” to shape the future, searching and exploring new sources of competitive advantage and new paths for pursuing its mission.

Our book reminds readers that the way to beat the competition is with the creative power of ideas, and achieving results from every idea requires the disciplined deployment of actions, competencies and resources. Still sound in its basic premises after nearly a decade, our book offers a framework for effectively handling both offensive and defensive marketing strategies, and reinterprets the competitive challenge as a circular path, an endless sequence of three competitive seasons: the Position Game, the Movement Game and the Imitation Game, which together make up a competitive cycle.

Any direct interaction with the market is a Position Game; but sooner or later the status quo will be disrupted by a strategy that changes the rules of play. This stage we call the Movement Game, when companies explore completely new ways to create value. Next, if the new rules actually take hold, the competitive arena shifts gears to enter the third season: the Imitation Game. Ultimately, the pathway will be come full circle when this game becomes the new status quo, and at this point the cycle begins again.

The dynamic succession of the Movement, Imitation, and Position Games is anchored to the concept of the continual evolution and constant change in the markets. Yet we need to remember that many marketing strategies are effective in some contexts, but can be cause for failure in others. This means that the true ability of a company does not lie in the strategies it formulates, but rather how well it understands the context where these strategies can be successfully developed and implemented.

We are now in the second decade of the 21st century, and our already hyper-competitive world has become hyper-connected too. The evolutionary trajectory of any business is incredibly uncertain today, and in addition to competitive and technological uncertainty, there is also uncertainty surrounding public health and socio-political scenarios.

Much has changed in the past few years, but the fundamental principles of competitive games are more valid than ever before as a framework for understanding and driving the dynamics of today’s market. The digital paradigm, in fact, has added moment and velocity to competitive games. On one hand, because digital technologies have generated conditions that facilitate the movement game: just think of all the new ways to create value, the scalability of digital businesses, lower entry barriers to markets and capital. Yet on the other, these same conditions make it more complicated for a company to defend its market, both in terms of imitation from others, and with respect to the next revolution. In contrast, in a few special cases, Movement Games in the digital era can give rise to huge advantages for first movers, with data-driven economies of scale, scope and learning that tend to expand the domain of some leaders, to the point of eliciting the scrutiny of regulators.

In any case, today’s business environments and macro-environments are still incredibly volatile, as we’ve said. So in contexts that are so unpredictable, companies have to manage risk/opportunity trade-offs by judiciously balancing various options: from a portfolio perspective, they have to conduct more strategic games, and juggle several different ones at the same time. At any given moment, there are fronts to reinvent or to build from the ground up, with more or less risky Movement Games. At the same time, there are fronts to join, by playing the right Imitation Games. And there will be consolidated revenue sources to defend and protect, focusing on efficiency, resilience, and perfect execution, essential arms in the Position Game. The key words are still balance, exploration and learning - in other words, companies need to recognize and play all three games at the same time to the best of their ability.