Ultimately, knowledge of how to use the New 7-S’s to disrupt the status quo and seize the initiative with a series of unsustainable advantages may be the only source of advantage that is sustained over time. Through using the New 7-S’s to establish a series of temporary advantages, companies build a sustained advantage.
This advantage does not ignore the short-term advantages based on price, quality, know-how, timing, entry barriers, deep pockets, or any of the other traditional sources of competitive advantage. These sources remain powerful competitive forces and important arenas of competition for temporary advantage. But they are not sustainable. The dynamic process of moving from one short-term advantage to another has become more important than the company’s position at any given point in time. Merely entering a market first is no assurance of advantage. It is the ability to enter, counter the moves of competitors, revitalize the market, exit, and move into a new market that keeps the company out in front.
While temporary advantage will still be achieved by racing up the escalation ladders in each arena of competition, true advantage will be sustained only by using the New 7-S’s to (1) stay ahead of the competition on each ladder, (2) restart the cycles within each arena, or (3) jump to a new arena that was previously not the main focus of attention in the industry.
This new competitive advantage is based on a knowledge of how to manage dynamic strategic interactions. It is based on understanding the new rules of the game—the New 7-S’s—and on the willingness to use them. This knowledge and understanding may be more sustainable than any other source of competitive advantage. It is not eroded by shifts in resources or opportunities in the four traditional arenas of competition. The skillful use of the 7-S’s, in and of itself, may be the most powerful form of sustainable competitive advantage that companies have today, provided that they recognize the need to use the New 7-S’s to disrupt the status quo and to move, as the pendulum swings, to creatively reconfigure the New 7-S’s (as was illustrated for the watch and camera industries).
Will Advantages from Using the New 7-S’s Eventually Erode?
Like all know-how, knowledge of how to use the New 7-S’s might eventually be expected to erode as it becomes widely assimilated. As knowledge of these approaches becomes increasingly widespread and all competitors begin using them—this is already taking place—one might expect that any advantage would be neutralized. In particular, this erosion may be seen in the temporary advantages of a customer focus. As customer focus (a central part of S-l) has been driven through U.S. organizations by the Total Quality movement and other forces, it has become less of an advantage and more of a requisite to succeed in business.
While the impact of the New 7-S’s may be diminished somewhat by their widespread adoption, there are several factors that promise to continue to make them a source of advantage even after they are widely used. First, the New 7-S’s have some inherent flexibility so that different companies using the New 7-S’s can take very different strategies. Unlike the three major generic strategies, the use of simultaneous and sequential strategic thrusts (S-7) presents a wide range of options and variations. There are many other thrusts that can be designed for specific opportunities as there are thousands of ways to skin a cat, making it difficult for firms to exactly replicate a competitor’s use of the New 7″S’s.
Second, the New 7-S’s are dynamic. Companies use them in different ways over time. Stakeholder satisfaction changes, competitive opportunities change, sources of temporary advantage change. The New 7-S’s and their goals of creating disruption and seizing the initiative remain constant, but the methods companies use to achieve these goals constantly change. In this way, even if all competitors in an industry are using the New 7-S’s, their moves will continue to be unpredictable. After all, Kodak outmaneuvered Polaroid by using the New 7-S’s only to find itself out- maneuvered by Canon using its New 7-S’s. At both times the principles of the New 7-S’s remained the same, even though their execution differed.
Third, companies usually cannot use all of the New 7-S’s at once because of inherent tradeoffs among the S’s. Companies perform a balancing act in weighing these tradeoffs. This adds to the unpredictability of competitive moves, because companies can move in any of the four arenas or use any of the New 7-S’s in developing their next strategic move, and the tradeoffs may make it difficult to respond.
As more competitors focus on disrupting the status quo and seizing the initiative, this intent may become fairly predictable. Companies will know that their competitors will be actively working on their next competitive move. But this intent does little to reveal the actual strategies of competi-tors. All it does is make it clear that the company will not pursue one strategy, namely, sustaining its current advantage. This leaves every action other than that one open.
The one certain impact is that as the New 7-S’s become more widespread, competition will become more aggressive. Instead of having one or two competitors seeking to disrupt the status quo, every competitor will be looking for the next source of temporary advantage. With this further intensification of hypercompetition, one might expect an increased interest in alliances and other forms of cooperation to dampen the intensity of competition (as has already been seen). Ultimately, however, the only way out of this dilemma is for companies to become more aggressive in seizing the initiative. Cooperative attempts to end this cycle of aggression will be seen as either (1) illegal (collusive antitrust violations) or (2) futile, since it is like shoveling sand against the tide. Leading firms will be wary of cooperative efforts that ask them to be less aggressive and give up their temporary advantage. Lagging firms with the fire in their bellies to be number one will not be satisfied with their permanent status as second- class citizens. So the New 7-S’s will be used more aggressively and more frequently in the future world of hypercompetition.
While the New 7-S’s will continue to be important, especially with the intensifying competition of the future, there may be even newer S’s that emerge as key to competitive success. Hypercompetitive companies will continue to monitor and define these new strategic approaches in new attempts to provide temporary advantages and sustain momentum with a series of successful short-term advantages.
Source: D’aveni Richard A. (1994), Hypercompetition, Free Press.