McGrath – Last Man Standing

This is the last strategy category for firms to disengage in an area after it is determined that the firm no longer has a competitive advantage. We have already discussed moving core capacities, transferring capacities, and slowly winding down. The last is the “last man standing” option.

This is counter-intuitive because it calls for a firm that has decided its investment in a given field is losing value to invest in it. Why? To get rid of the competition.  You might even buy them out. Risky? Yes. Has it worked? Yes. Consider that if you are the last man standing in a given area, you control the game in that area. Also – consider that you really may have only one other option – to shut down (a fire sale is not possible here).

This is the last post on Chapter 3 of “The End of Competitive Advantage”. We move onto Chapter 4 next — using resources to promote deftness. You want to be deft, right?

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