Competitive Advantage Today Relies on Ecosystem Advantage

Competitive advantage no longer comes from lower costs or product differentiation. Today, the advantage lies in building an ecosystem of complementary, connected products that deliver network effects while increasing switching costs.

Many organizations considering digital transformation fear channel conflict—the idea that some of their channels will compete with one another as substitutes. Organizations need to instead seek complementarity between channels by understanding how each one aligns with the product, service, and audience.

This is contrary to the historical understanding of competitive advantage, but part and parcel with the notion that Digital transformation requires fundamentally revising the business model.

See: Digital transformation


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Citations

Gupta, Sunil. Driving Digital Strategy: A Guide to Reimagining Your Business. Boston, Massachusetts: Harvard Business Review Press, 2018.


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