COMPETING FOR

THE FUTURE
Breakthrough Strategies For Seizing
Control Of Your Industry And Creating
The Markets Of Tomorrow
GARY HAMEL and C.K. PRAHALAD

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 Competing For The Future - Page 1

MAIN IDEA
The companies and business organizations that will prosper in the future are those that
1. Succeed in improving the quality of life of their customers by creating new products and services that deliver unexpected benefits.
2. Create a viable and meaningful way for employees to contribute personally to the success of the firm.
3. Manage to invent and then dominate new competitive space in consumer markets.
In essence, competing for the future means thinking and acting in new and unconventional ways. It requires identifying how the
future will be different, understanding what these differences will mean to consumers, mobilizing the company to position itself
advantageously in that new environment and getting to the future before any competitors do. Along the way, techniques like
expeditionary marketing and attempting to achieve global preemption will play a role.
The end result? A company can not only imagine the future it wants to enjoy, but actively create it.

The New Paradigm For Competitive Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2

Competing for the future means to identify, create and then dominate emerging market opportunities --
before your competitors have the opportunity to exploit them. In essence, competing for the future requires
you to anticipate and execute before your competitors are even aware of the need.
Initiative #1 -- Identify -- Visualize the ways competition will differ in the future. . . . . . . . . . . . . . . . . . . . . . . . Page 3
To identify the market opportunities of the future, a new vision will be required, incorporating abilities:
1. To unlearn historical processes, and develop the new processes of the future.
2. To lead the industry in a new direction by identifying and exploiting tomorrow’s opportunities.
3. To compete for the right to shape the structure of the markets of the future.
Identifying the future involves creating a vision of where the company should be in the future to succeed.
Initiative #2 -- Understand -- Capture and refine insights into future opportunities. . . . . . . . . . . . . . . . . . . . . . . Page 4
Once the future has been imagined, it must then be translated into reality. That is a strategic architecture:
1. To unlearn what worked in the past, allowing room for creativity about the future.
2. To develop the foresight to see the markets of tomorrow.
3. To build a strategic architecture around which the competencies of the future can be built.
When a company understands the future, it can develop a map for getting from where it currently is to
where it wants to be in the future.
Initiative #3 -- Mobilize -- Energize and unite the company for the journey ahead . . . . . . . . . . . . . . . . . . . . . . Page 5
The race to the future of any market does not go to the company with the greatest resources at the start
of the race. Rather, the winner is invariably the company that is the most resourceful -- that has the clearest
vision of the future around which the energy and efforts of the entire organization are focused. To be
resourceful, a company must utilize a new strategy:
1. To stretch -- by finding ways to achieve targets that seem impossible.
2. To overcome any constraints on resources by creating greater leverage.
In short, stretching and using leverage provides the fuel for the journey the company must go on if it is to
arrive at the intended future circumstances.
Initiative #4 -- Arrive -- Get to the future before your competitors -- without risk. . . . . . . . . . . . . . . . . . . . . . . . Page 6
The payoff occurs when a company converts intellectual leadership into market leadership before its
competitors do. Again, this will require a new strategy with the following elements:
1. Compete for control of the industry’s future direction.
2. Compete for leadership in a core competence.
3. Compete as part of a coalition of businesses working together.
4. Attempt to learn more about where consumer demand will lie in the future.
5. Focus on minimizing the time required to pre-empt competitors in global markets.
Expeditionary Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 7
Expeditionary marketing is all about finding out where the heart of the end-user market actually lies. Being
successful in expeditionary marketing usually requires:
1. Brand name awareness. 2. A strong channel of distribution. 3. The capacity to roll-out products quickly.
The key lies in maximizing the return of learning for investment -- that is, in learning faster than competitors
where the market is headed in the future.
Global Preemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 7
Companies that launch and establish their products first into global markets derive four benefits:
1. They maximize returns. 2. They lock up distribution. 3. They build mind-share. 4. They are positioned.
Thinking and Acting Differently . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 8
If a company aspires to industry leadership, it must differentiate itself by thinking and acting differently
about three key topics:
1. Competitiveness 2. Business strategy 3. The organization of the firm

The New Paradigm For Competitive Strategy
Main Idea
Competing for the future means to identify, create and then
dominate emerging market opportunities -- before your
competitors have the opportunity to exploit them. In essence,
competing for the future requires you to anticipate and execute
before your competitors are even aware of the need.
Supporting Ideas
Companies that compete for the future of their markets are
proactive in anticipating and shaping the future direction of their
markets, rather than simply reacting to the strategic moves of
consumers and their direct competitors. By doing this, the
emerging market opportunities of the future are created and
exploited.
There are four initiatives around which any effort to compete for
the future will be built:
1. Identify
Understand the ways competition
will differ in the future
2. Understand
Capture and refine insights into
future opportunities
Competing for
the Future 3. Mobilize
Energize and unite the company
for the journey ahead
4. Arrive
Get to the future before your
competitors -- without risk
Each of these initiatives will require a new and innovative
strategic framework which will differ from that previously used.
The company or organization that can build and apply the new
strategy first will automatically get to the future ahead of
everyone else.
The race to the future takes place in three phases which, while
distinct, almost always overlap in the real world:
Present
Phase 1 -- Compete for Intellectual Leadership
This is the competition to imagine the benefits customers
will demand and value in the future -- and how those
benefits can be delivered in innovative and original ways.
Phase 2 -- Compete to Manage the Migration Path
This is the competition for industry standards in the
emerging market -- which revolves around the
necessary core competencies and strategic partners.
Phase 3 -- Compete for Market Share and Leadership
Once the market has formed around standards, market
share and market position based around value, cost,
price and service become the key focus area.
Future
Competing For The Future - Page 2
Management attention must, of necessity, vary according to the
current phase. During Phase 1, for example, the focus of
management must be on origination of new ideas. In Phase 2,
negotiation will be the primary activity of managers. And only
during Phase 3 -- around which most current generation
strategic planning focuses -- will the focus shift to the types of
activities which currently engage most managers.
Key Thoughts
‘‘Getting to the future first is not just about outrunning competitors
bent on reaching the same prize. It is also about having one’s
own view of what the prize is. There can be as many prizes as
runners; imagination is the only limiting factor. In business, what
distinguishes leaders from laggards, and greatness from
mediocrity, is the ability to uniquely imagine what could be.’’
-- Gary Hamel and C.K. Prahalad
‘‘The wealth of a firm, and of each nation in which it operates,
largely depends on its role in creating tomorrow’s markets and
its ability to capture a disproportionate share of associated
revenues and profits.’’
-- Gary Hamel and C.K. Prahalad
‘‘Failure to anticipate and participate in the opportunities of the
future impoverishes both firms and nations. The future is not an
extrapolation of the past. New industrial structures will
supersede old industrial structures. Opportunities that at first
blush seem evolutionary will prove to be revolutionary. Today’s
new niche markets will turn out to be tomorrow’s mass markets.’’
-- Gary Hamel and C.K. Prahalad
‘‘If strategy is seen only as a positioning game, it will be difficult
for a company to avoid becoming trapped in an endless game
of catch-up with far-sighted competitors. Conceiving of strategy
as a quest to proactively configure nascent industries, or
fundamentally reconfigure existing industries to one’s own
advantage, is a very different perspective than a view of strategy
as positioning individual businesses and products within today’s
competitive environment.’’
-- Gary Hamel and C.K. Prahalad
‘‘We believe that managers are spending too much time
managing the present and not enough creating the future.’’
-- Gary Hamel and C.K. Prahalad
‘‘Like a grizzled old mechanic who bemoans the complexity of
modern automobiles, incumbents typically have an
understandable incentive to preserve the existing economic
engine. Yet it is hard to imagine any circumstance in which a firm
wouldn’t benefit more from proactively managing industry
evolution, even when the industry is evolving in a way that
undermines the efficiency of the firm’s current profit engine, than
from letting someone else control the pace and direction of
industry evolution.’’
-- Gary Hamel and C.K. Prahalad
‘‘Our emphasis has always been to make something out of
nothing.’’
-- Masaru Ibuka, founder, SONY
‘‘Any company that wants to capture a disproportionate share of
profits from tomorrow’s markets must build the competencies
that will make a disproportionate contribution to future customer
value.’’
-- Gary Hamel and C.K. Prahalad
 Competing For The Future - Page 3

Initiative #1 -- Identify To be able to forget its past, a company must alter its corporate
Visualize the ways competition will differ in the future. genetics -- the set of biases, industry acts, presuppositions,
assumptions, beliefs and preferences carried around in the
Main Idea heads of its management team. The company must also strive
to develop worthwhile industry foresight -- a vision of where the
To identify the market opportunities of the future, a new vision industry is heading in the future.
will be required, incorporating these strategic elements:
To develop industry foresight:
1. Be able to answer three critical questions:
Current Strategy New Strategy • What new benefits should be provided in the future?
• Which competencies are required to deliver the benefits?
To reengineer processes to To unlearn historical
• How will the customer interface vary in the future?
increase competitiveness. processes, and develop the
new processes of the future. These are the three elements from which any vision of the
future will be constructed -- and competed upon.
To transform the To lead the industry in a 2. Look at trends occurring in technology, regulation,
organization to increase new direction by identifying demographics or lifestyle -- and visualize how those trends
competitiveness. and exploiting tomorrow’s may reprioritize industry rules and lead to the creation of new
opportunities. and additional competitive space.
To compete for market To compete for the right to 3. Keep an open mind on what might happen within the
share in the existing shape the structure of the marketplace -- rather than foreordaining winners before the
marketplace. markets of the future. marketplace has spoken.
Identifying the future involves creating a vision of where the 4. Encourage everyone at every level of the organization to
company should be in the future to succeed. focus on foresight -- and to articulate their point of view about
how the future will unfold. Encourage discussion.
Supporting Ideas
5. Start by imagining what could be in the industry. Then work
Quite frequently, the hardest thing for a company to do is to
backwards. Consider what must happen, if that scenario
attempt to unlearn what it currently does in order to allow fresh
actually is realized. Can those intermediate steps be realized
market insights to bubble through to the surface. The traditional
-- bringing about significant long-term changes.
bias, within any organization, tends to be to look at the future in
terms of what worked in the past. This, however, can be quite 6. Look for opportunities to enlarge the company’s opportunity
limiting. horizon -- unexploited business areas where the company’s
current competencies can be successfully applied in the
Therefore, the existing business model must be broken down
development of an entirely new business.
and re-examined, along these lines:
7. Try functional thinking. Instead of simply looking at traditional
services and products, take a functional perspective. What
Current Business Model New Business Model benefits are people deriving from products or services? How
could these benefits be delivered differently, or more
1. Market Concept efficiently? Does that create any new opportunities or
• What is the value proposition? • Which customers are not competitive space?
• How is the market segmented? currently being served, and what 8. Try a child-like approach. Don’t assume anything is
• Which segment is important? are their actual needs? impossible. Evaluate how things should be -- rather than the
• Where are customers located?
way everyone currently accepts they are. Focus on any
2. Margins insights this exercise may suggest.
9. Search for metaphors, analogies and unusual hybrid
• Where are profits taken? • Could more profits be
• Where are margins created? extracted at a different part of the combinations of products and services.
• What determines margin size? value chain? 10. Take every opportunity to be a contrarian -- to challenge
• What drives costs and prices? conventional wisdom and break conventions.
3. Core Competencies 11. Develop empathy and awareness of basic human needs,
combined with an understanding of how consumer react
• What do we do well? • Is there an alternative emotionally to your product or service.
• What infrastructure is in place? configuration of skills and assets
• Which skills are dominant? that would serve the business’s Key Thoughts
• Where does funding go? customers better?
‘‘Any company that drives forward while looking out the rear view
4. Adaptiveness mirror will, sooner or later, run into a brick wall. Similarly, any
company whose stake in the past or present is bigger than its
• Are we alert to new models? • What is our vulnerability to the stake in the future runs the risk of becoming a laggard.’’
• Can investment be redirected? emergence of any new value
-- Gary Hamel and C.K. Prahalad
• Is infrastructure variable? delivery models that may
• Who would resist change? emerge? ‘‘Our plan is to lead the public with new products rather than ask
Most frequently, a company will refuse to consider walking away them what kind of products they want. The public does not know
from its past unless it realizes there is a clear and present danger what is possible, but we do.’’
to its ongoing existence. -- Akio Morita, SONY

Initiative #2 -- Understand
Capture and refine insights into future opportunities.
Main Idea
Once the future has been imagined, it must then be translated
into reality. That requires a robust strategic architecture:
Current Strategy New Strategy
To learn what worked To unlearn what worked in
well in the past. the past, allowing room for
creativity about the future.
To focus on positioning in To develop the foresight to
current markets see the markets of
tomorrow.
To develop detailed To build a strategic
strategic plans. architecture around which
the competencies of the
future can be built.
When a company understands the future, it can develop a map
for getting from where it currently is to where it wants to be in the
future.
Supporting Ideas
Taking a company or organization from where it is today to where
it needs to be in the future requires a migration path -- built
around an underlying framework of a well conceived strategic
architecture. In essence, the strategic architecture is the
high-level blueprint for the new company.
A good strategic architecture:
1. Identifies precisely what the company must start doing
immediately to be well positioned in the future.
2. Serves as a link between the present and the future.
3. Serves an opportunity approach function -- identifying which
competencies should be acquired now for future needs.
4. Details how the interface with consumers will change and
evolve over time.
5. Keeps larger picture issues in focus without so much detail
the essential direction becomes obscured.
6. Focuses on the market-making opportunities of the future.
7. Adds more and greater detail through the process of
successive approximations -- regular updates and
refinements as more details become available.
Some of the practical things a company can do to create a viable
strategic architecture are:
1. Ask the question: ‘‘Given our unique set of competencies,
what can we do better than anyone else in the world -- and
what new business opportunities does that generate?’’ at
every level of the company.
2. Form a strategic architecture council -- drawn from every
division of the company -- to identify new business
opportunities that could be exploited.
3. Organize a company wide event at which people from every
level of the organization can participate in challenging and
rethinking the corporate assumptions, key aspirations and
directions.
Competing For The Future - Page 4
4. Form strategic alliances and other associations with other
organizations with different sets of skills and competencies.
See what kind of hybrid products and services become
possible.
5. Ask senior managers to summarize their answers to the
question, ‘‘How will the future of our industry be different?’’
Evaluate the answers -- even what ‘‘the future’’ means to
different people may be as illuminating as the ideas put
forward. Consider how broad the answers are. Determine
whether the company poses a competitive challenge to any
other organization in the future -- or whether it remains locked
in the past.
6. Encourage ambiguity and avoid making commitments to
large, irreversible allocations of resources. Realize that
flexibility in strategic architecture is not only desirable but
essential.
7. Look for opportunities to develop a set of significant
milestones along the envisaged path. Be flexible about the
specifics of how the move to the future will be realized.
8. Once an emerging opportunity has been decided upon, be
prepared to make tightly targeted investments in
competencies, distribution channels, brands, product
development programs and so forth. Don’t stay uncommitted
-- get into the marketplace.
9. Learn by doing -- get alongside key customers, perform
market testing, undertake projects with potential competitors,
study competing technologies.
Key Thoughts
‘‘An architect must be capable of dreaming of things not yet
created -- a cathedral where there is now a dusty plain, or an
elegant span across a chasm that hasn’t yet been crossed. But
an architect must also be capable of producing a blueprint for
how to turn the dream into reality. An architect is both a dreamer
and a draftsman. An architect marries art with structural
engineering. A strategic architecture must be seen as a work in
progress. As one moves forward and acquires insight into the
most attractive technologies, the best delivery vehicles and the
exact nature of customer needs, investment priorities become
clearer and bets less equivocal. One then adds the wiring
diagrams, the plumbing, the bricks and mortar and the interior
fittings to the broad structural architecture.’’
-- Gary Hamel and C.K. Prahalad
‘‘The goal of competition for industry foresight is, at one level,
simple: to build the best possible assumption base about the
future and thereby develop the prescience needed to proactively
shape industry evolution. Competition for industry foresight is
essentially competition to establish one’s company as the
intellectual leader in terms of influence over the direction and
shape of industry transformation. Industry foresight gives a
company the potential to get to the future first and stake out a
leadership position. Industry foresight allows the company to
control the evolution of its industry and, thereby, its destiny. The
trick is to see the future before it arrives.’’
-- Gary Hamel and C.K. Prahalad

Initiative #3 -- Mobilize
Energize and unite the company for the journey ahead
Main Idea
The race to the future of any market does not go to the company
with the greatest resources at the start of the race. Rather, the
winner is invariably the company that is the most resourceful --
that has the clearest vision of the future around which the energy
and efforts of the entire organization are focused.
To be resourceful, a company must utilize a new strategy:
Current Strategy New Strategy
To align goals and To stretch -- by finding ways
resources as productively to achieve targets that
as possible. seem impossible.
To allocate scarce To overcome any
resources across various constraints on resources by
projects effectively. creating greater leverage.
In short, stretching and using leverage provides the fuel for the
journey the company must go on if it is to arrive at the intended
future circumstances.
Supporting Ideas
Good companies use strategic intent to bring their vision of the
future to life, and to motivate and unite employees. Strategic
intent:
1. Conveys a sense of the direction the company needs to be
heading in order to compete successfully in the future -- and
invites everyone to use their creativity and initiative in the
pursuit of that goal.
2. Has an emotional element -- something employees will relate
to and perceive as worthwhile.
3. Injects a sense of discovery -- that the company is
differentiating itself by staking out new competitive territory
where nobody else has gone before.
4. Implies a sense of destiny -- that by achieving its objective,
the company will make a meaningful difference in the lives
of people.
The company’s strategic intent must then be personalized for
each employee. This is usually achieved by setting concise
challenges or objectives that are milestones towards the
long-term vision. As each milestone is achieved and reported on
-- through the use of whatever statistical measures are
appropriate -- the next milestone is highlighted, and the cycle
repeated until a number of small steps have progressed the
company towards its larger objective.
Since a firm’s strategic intent will always outstretch its current
operating realities, there will always be some underlying
dynamics around the difference. Planning and budgeting
practices, for example, may conspire to let what is immediately
feasible crowd out what is ultimately desirable. The only way to
break this potential impasse is through business leadership -- by
having leaders who view strategy as a stretch of where the
company should be heading rather than as a straight jacket
limiting the company to repeat what it has already done over and
over.
Ultimately, the gap between aspirations and resources must be
bridged. The best way to do that, however, is not by scaling back
aspirations but by creating leverage -- in short, by increasing the
Competing For The Future - Page 5
impact of the company’s resource base combined with a parallel
effort to secure greater resources.
There are five ways resource leverage can be achieved:
1. By concentrating resources on key strategic goals rather
than spreading them over more initiatives. This is done by:
1. Eliminating competing goals.
2. Maintaining consistency over extended periods.
3. Focusing on goals that are the most important.
4. Targeting activities that create the most added value.
2. By being more efficient at accumulating resources.
This includes the ability to learn from experience and extract
valuable lessons for productivity enhancements. It will also
embody strategic alliances, joint venture, licensing
arrangements and other commercial tie-ups under which the
resources of third parties can be borrowed or harnessed. In
this context, the organization’s ability to absorb the insights
gained is an important factor. Resources can also be
accumulated by forming links with suppliers, sharing
development risks with key customers, acquiring resources
on more favorable terms in specific geographical locations
or seeking government funding for research projects or the
like.
3. By combining resources to create synergy and added value.
Resources can be combined to create added value by:
1. Blending -- integrating a number of systems together.
2. Balancing -- combining the results of a host of programs.
3. Recycling -- applying expertise from one area to others.
4. Co-opting -- forming a group to fight a common enemy.
5. Protecting -- picking fights carefully to minimize risk.
4. By finding effective ways to conserve and use resources
more efficiently.
5. By minimizing the time between the application of resources
and payback. The more rapidly a company can begin
generating revenues, the greater the advantage it has over
its competitors.
Key Thoughts
‘‘"If we only had more resources, we could be more strategic, "
is an opinion frequently voiced by managers. Yet with a view of
strategy as stretch and leverage, it is apparent that the real issue
for many of these managers is not a lack of resources, but too
many priorities, too little stretch and too little creative thinking
about how to leverage resources. It’s no wonder many of these
managers feel they are resource-constrained: In a sense, they
are. But showering them with more resources, in the absence of
a fundamental improvement in their capacity to leverage
resources, would provide no more than temporary relief of their
frustrations.’’
-- Gary Hamel and C.K. Prahalad
‘‘Although an abundance of resources, or slack, enables firms to
be strategic in an investment sense, it does nothing to enhance
the wisdom of strategic decisions. resource abundance and the
attendant ability to make multiple bets and to sustain multiple
failures too often substitute for disciplined and creative strategic
thinking. Bigger bets sometimes bring bigger payoffs, but they’re
just as likely to bring bigger disasters. In the absence of an
aspiration that outstrips a firm’s resources and a capacity for
resource leverage, abundance is likely to be little more than a
license for carelessness in strategic decision making.’’
-- Gary Hamel and C.K. Prahalad
 Competing For The Future - Page 6

Initiative #4 -- Arrive 4. Increases in value over time if properly managed rather than
Get to the future before your competitors -- without risk. becoming outmoded and replaceable.
Competition to develop a core competency takes place over four
Main Idea distinct levels:
The payoff occurs when a company converts intellectual 1. Competition to Acquire Various Components
leadership into market leadership before its competitors do. The various skills and technologies at the heart of the
Again, this will require a new strategy with the following competency are built or acquired.
elements: 2. Competition to Synthesize
Skills, technologies and know-how are blended together to
create more added value for that competency.
Current Strategy New Strategy
3. Competition to Supply Core Products or Platforms
Compete for market share Compete for control of the To achieve economies of scale, companies then compete to
of an existing industry. industry’s future direction. provide sub-systems to other original equipment
manufacturers (OEMs) who will brand and market the
Compete for leadership in a Compete for leadership in a products.
product category. core competence.
4. Competition to Maximize End Market Share
Compete as a stand alone Compete as part of a To sell more than anyone else, through a mix of own brands
business organization. coalition of businesses and OEM arrangements.
working together. Viewing a company from a core competency perspective rather
Attempt to maximize the Attempt to learn more about than from a business unit viewpoint is always going to be more
number of new product hits where consumer demand productive and useful from a business strategy perspective.
over failures. will lie in the future. To develop a core competency perspective, a company must:
1. Identify and understand the core competencies currently
Focus on minimizing the Focus on minimizing the
owned by the company or organization. By producing an
time required to take a new time required to pre-empt
inventory of competencies that generate added value (from
product to market. competitors in global
the customer’s perspective), managers increase their
markets.
sensitivity to their most important success drivers.
This initiative focuses on how the company can survive the 2. Develop an acquisition plan and agenda for the addition of
transition from current circumstances to the market conditions new core competencies which will be required to:
of the future. 1. Improve competitiveness in existing markets.
Supporting Ideas 2. Extend the business into unexploited existing markets.
The advantages of getting to the future first are: 3. Create new combination or hybrid products and services.
1. An installed base of users can be created and leveraged. 4. Create entirely new products that target exciting markets.
2. Greater control over the company’s own destiny. 3. Go about building new core competencies systematically
3. Stronger positioning and mindshare with consumers. and thoroughly, with consistency of direction and stability of
4. The ability to learn from actual market experience sooner. leadership.
5. The opportunity to completely dominate the new market. 4. Be willing to reallocate core competency assets to those
6. The opportunity to set standards in the new industry. parts of the business where the greatest future benefits can
7. The opportunity to influence migration paths to the industry. be derived, rather than those areas where traditional results
8. Attractiveness as a coalition partner is enhanced. have been generated. (This will generally require a corporate
Generally speaking, around 10 years is required to build culture than understands and values core competencies
world-class competency in any specific area of business. Also, highly).
interestingly, the route any company takes to get there will be 5. Protect and defend its core competencies by:
quite unique -- what works for one company will not necessarily 1. Appointing internal guardians and stewards.
produce equivalent results for another. 2. Conducting regular benchmark comparative tests.
This is particularly significant in the area of core competencies 3. Building an inner core of competency specialists.
-- the capabilities that lie at the heart of generating and sustaining 4. Watching for erosive practices or habits that may creep in.
competitive commercial advantage. 5. Articulating and highlighting competency priorities.
A core competency: Key Thoughts
1. Is a bundle of integrated skills and technologies rather than
‘‘The core competence perspective is not a natural one in most
one specific or discrete skill or technology.
companies. Typically, the lost basic sense of corporate identity
2. Contributes meaningfully to long-term corporate or is built around market-focused entities, often called "strategic
organizational prosperity by. business units" rather than around core competencies. Whereas
1. Providing customer-perceived added value. it is entirely appropriate to have a strong end-product focus in an
2. Being a unique point of differentiation. organization, this needs to be supplemented by an equally
3. Generating a broad array of new products and services. explicit core competence focus. A company must be viewed not
3. Is not an asset that will show up on a balance sheet -- such only as a portfolio of products and services, but a portfolio of
as a brand, factory, distribution channel or patent. competencies as well.’’
-- Gary Hamel and C.K. Prahalad

Expeditionary Marketing
Main Idea
Expeditionary marketing is all about finding out where the heart
of the end-user market actually lies. Being successful in
expeditionary marketing usually requires:
1. A pre-existing brand name awareness.
2. A strong channel of distribution.
3. The capacity to roll-out products quickly and efficiently
The key lies in maximizing the return of learning for investment
-- that is, in learning faster than competitors where the market is
headed in the future.
Supporting Ideas
Since the objective is to reach the future quicker than a
competitor can, expeditionary marketing is of vital importance --
particularly for emerging markets where no other historical
information exists.
Every new product launch team believes they will hit the bulls
eye in terms of customer demand and requisite product
performance offered, but very few ever do. In fact, the only
worthwhile learning any company ever does is when it places its
product offerings in front of consumers and sees whether or not
they respond.
What counts most in expeditionary marketing is not hitting the
bulls eye first time, but in staying active in the market long
enough to learn how your product offering needs to be altered
to make it more attractive to its intended market.
With that in mind, the amount of time and cost required to launch
each new product offering becomes of paramount interest. The
faster, and more cost effectively, a company can repackage and
relaunch a product package, the better. (And that also requires
the company or organization to have a healthy tolerance for new
product failures as a good way to learn rather than the kiss of
death for a corporate career).
The heart of expeditionary marketing is to get into the
marketplace and learn from customers what works and what
doesn’t work while potential competitors are still fiddling around
in the labs. Of course, that desire to learn must be balanced
against the potential damage to the value of a brand name that
would result from the introduction of products that are only
half-finished or ill equipped to deliver the promised benefits.
Key Thoughts
‘‘Global brands are emerging because the companies that make
and market them are becoming global organizations. The brand
is a by-product of organizational experience and business
systems (which is what we truly leverage rather than some
catchy name). So why do organizations, including my own,
continue to strive for worldwide brands? I believe they are really
rallying points or symbols for the organization itself, for the
experience and knowledge it brings to the marketing of soft
drinks, cigarettes or beer.’’
-- Michael Jordan, CEO, Westinghouse
‘‘Expeditionary marketing represents a practical approach to
reconnoitering the markets of the future only if the arrows are not
gold plated, and if it doesn’t take months or years to recalibrate
one’s aim and shoot again.’’
-- Gary Hamel and C.K. Prahalad
Competing For The Future - Page 7
Global Preemption
Main Idea
Companies that launch and establish their products first into
global markets derive four benefits:
1. They maximize returns on innovation.
2. They lock up national distribution channels.
3. They build mind-share amongst consumers.
4. They are positioned to spread from market to market rapidly.
Supporting Ideas
The first-mover advantage in business can be quite significant
to long-term business prospects. To fully exploit a new product
or technology, a global presence is required. Otherwise, large
and significant commercial opportunities can be lost to
faster-moving competitors.
Most of the world’s most successful commercial enterprises
establish a banner brand under which their global marketing
programs are arranged. This can be conceptualized as:
Consumers Banner Business Core Core
Brand Units Products Competencies
Some companies use a corporate name as the banner brand, a
product family name or something entirely different. The primary
goal of a banner brand is to predispose consumers to try new
products as they become available, thereby securing the
first-mover advantages for the firm and preempting any
competitive moves which may subsequently be made.
The best banner brands:
1. Have recognition and awareness amongst consumers.
2. Have a reputation built on historical performance.
3. Have affinity to the consumer -- they mean something.
4. Are plausible in application to a variety of different areas.
A strong and vibrant banner brand will drive new products or
services quickly into the major consumer markets -- making it
more difficult for competitors to stake out any market share. They
provide a sustainable competitive advantage in the race to the
future, and properly exploited, can be an important element in
the quest to secure the first-mover advantages.

Thinking and Acting Differently
Main Idea
If a company aspires to industry leadership, it must differentiate
itself by thinking and acting differently about three key topics:
1. Competitiveness
2. Business strategy
3. The organization of the firm
Supporting Ideas
Taking each of these three areas in turn:
1. Thinking and acting differently about competitiveness
Most frequently, the search for the underlying drivers of a
sustainable competitive advantage is too narrow (in terms of
time frame and market definition) or too shallow (in terms of
focusing on superficial differences rather than the underlying
strategic framework). As a result, most competitive
advantages can be summarized as:
1. Find an attractive industry segment.
2. Buy low.
3. Sell high.
In other words, the traditional analysis of competitiveness
focuses on the "what" factor (what does the company do
differently?) rather than the more perceptive "why" factor
(why did the current market evolve that way, and where is it
headed in the future?) To compete successfully for the
future, a firm must focus on the "why" more extensively than
on the "what" factors.
In the broader business context, the driving force behind any
company’s development is its corporate genetic code -- the
way the business managers are inclined to act and the way
they think about their product or service offering, their target
market and so forth.
To race to and compete successfully in the future, companies
must:
1. Understand the implicit conventions they use.
2. Understand how these conventions can limit thinking.
3. Consider deliberately any industry discontinuities.
4. Build a framework for gathering industry foresight.
5. Work to build strategic architecture.
2. Thinking and acting differently about business strategy
To be able to compete in the future, a company needs:
1. A view of the future -- industry foresight.
2. A blueprint for getting there -- strategic architecture.
In general, most strategic planning is incremental while
strategic architecture opens up new markets and focuses on
new business opportunities. Strategic planning often focuses
on tactics and operational issues facing business units.
Strategic architecture, by contrast, looks at the way the
industry can be reshaped to the firm’s advantage in the
future, which core competencies will be required in the
marketplace of the future, how to go about securing those
resources or building them now and so forth.
In short, strategic architecture:
1. Has a long-term view of shaping an industry.
2. Uses leverage to achieve corporate aspirations.
3. Integrates the idea of stretching to grow.
4. Encourages consistency and constancy of effort.
© Copyright 1999 All Rights Reserved Summaries.Com
Competing For The Future - Page 8
3. Thinking and acting differently about business organization
Most attention in recent times has focused on the transition
from a centralized, bureaucratic technology-led corporate
organization to a decentralized, empowered consumer-led
organizational style. Yet inevitably, all this achieves is trading
one set of problems for another.
A better approach is to form a hybrid business organization
that contains the best features of both approaches. The
central framework for this type of organization are core
competencies.
A company that is organized around core competencies:
1. Is focused on customer benefits first and foremost.
2. Makes decisions collectively.
3. Encourage original actions on behalf of managers.
4. Develops interlinkages between business units.
5. Drives unity through a shared sense of direction.
6. Allows employees to be activists and not just reactivists.
7. Is positioned to achieve real growth.
Key Thoughts
‘‘Our point of view is one that emphasizes building more than
downsizing, organic growth more than deal-making, industry
redfinement more than process engineering, long-term
possibility more than short-term feasibility, leveraging resources
more than allocating resources and striving more than arriving.’’
-- Gary Hamel and C.K. Prahalad
‘‘If the goal is industry leadership, restructuring and
reengineering are not enough. To build leadership, a company
must be capable of regenerating its core strategies. In this sense,
it is not enough to get smaller and better; a company must also
have the capacity to become different. But to ultimately "be"
different, a company must first "think" differently.’’
-- Gary Hamel and C.K. Prahalad
‘‘In Detroit most product-development dollars are spent on
modest improvements to existing products and most market
research money is spent on studying what customers like among
available products. In 10 years of developing the minivan, we
never once got a letter from a housewife asking us to develop
one. To the skeptics, that proved there wasn’t a market out
there.’’
-- Hal Sperlich, Chrysler
‘‘Developing new competencies and reconnoitering new
competitive space can be the work of a decade or more. Yet
despite the studied pace of competence acquisition and market
exploration, the final dash to the finish line can be an all-out, pell
mell sprint. This is particularly likely when several competitors
have been working in parallel to develop needed competencies
and market insights, and simultaneously come to believe after a
round or two of expeditionary marketing, that the market is finally
"ripe". This last, mad scramble for the finish line is a race to
preempt competitors in key markets, to capture market
leadership in the biggest and fastest growing national markets,
and bank the rewards of pioneering.’’
-- Gary Hamel and C.K. Prahalad