Transient Advantage in a Digital Economy

Digital technology is recasting strategy development as it rapidly changes the commercial landscape and business capabilities. The challenge for traditional industries such as manufacturing is to engage with this new technology and recognise that the skill sets relevant in a manufacturing environment are less applicable in a digital age. Having driven value from product manufacturing, the industry is beginning to recognise the value of knowledge. Rapid development of technology means that these businesses are entering an increasingly turbulent environment where a competitive advantage is ever more transient.

This research paper explores the strategic choices and analysis challenges in turbulent markets in the context of a case study of the chemical manufacturer, Albright and Wilson Australia Limited (AWAL).

AWAL’s products are moving into the decline phase of their lifecycle. And so AWAL has developed a strategy underpinned by an e-commerce platform. Given that this is a new business model, AWAL also requires metrics which measure progress of this strategy. Six critical dynamics, of which three are considered primary drivers, have been gleaned. These parameters have been combined into a single rating, termed eSR, to measure overall capability and therefore the likelihood of success of this or subsequent models.

Given the strategy and the eSR model were developed using generative thinking, endorsement can be achieved by applying tools which support rational thinking, creating a hybrid approach. But current rational strategy and business analysis tools, developed in a paradigm of sustainable competitive advantage, are not considered valid in turbulent environments. So using these traditional models as a launching point, each is modified and applied to the strategy having regard for the significant influencing factors of transient advantage theory.

This approach is condensed into three propositions which are examined using academic literature to endorse or critique. Where the literature invalidates a proposition, alternatives are offered for future consideration.

This discourse has largely validated AWAL’s strategic intentions supporting the legitimacy of developing a digital platform. Also, the application of transient theories to existing stable paradigm models proves useful.

This process drew out a number of key areas for attention not otherwise identified in the strategy. In relation to the eSR metric, this analysis identified that some dynamics proved largely irrelevant. However, the process did identify some alternatives worth considering.

So, while new metric should be used when considering innovative new strategic business models the practical development of a measure, and validation of a strategy, requires a hybrid of generative and rational thinking, having regard for turbulence when building competitive advantage.