I said:
>> In a non-monopolistic economy, I don't think either is
>> possible for longer than it takes to copy and reproduce whatever is
>> creating the advantage. ... in an environment of freely
>> and instantly available information, this advantage is only fleeting and
>> cannot be sustained.
Iris responded:
>This suggests that competitive advantage only comes in the form of
>explicit information. What about tacit knowledge? Knowing how to do
>something and understanding why it works is sometimes a lot more important
>than knowing what to do. This is why the Japanese have such an edge on us
>when it comes to learning through partnerships. They recognize the
>underlying tacit gems and they exploit them. We don't seem to be as good
>at it.
I'd say that competitive advantage happens when you've connected with your
market in a way that improves your position relative to the competition.
I don't know about explicit vs. tacit information, except that in any
environment where competitors can see what each other are doing they will
know before long what's being done and what they have to compete with. My
point was that advantages aren't sustainable because of the information
available in the system.
Firm A can sustain an advantage over Firm B only as long as B is either
unaware of what A is doing, or is unable to cope with it (as in copy it or
find some other way to compete), in which case Firm B will probably
decline and Firm C will take its place. The net result will be for
*someone* to successfully compete with A.
Iris raises a good point about the Japanese edge. The auto industry is a
case in point. But that has more to do with protective tariffs enabling
the US auto industry to change slowly; if the system were more open, we
would have been scrambling to compete a lot earlier.
-- David E. Birren Phone: (608)267-2442 Wisconsin Dept. of Natural Resources Fax: (608)267-3579 Bureau of Management & Budget Internet: birred@dnr.state.wi.us David E. Birren Phone: (608)267-2442 Wisconsin Dept. of Natural Resources Fax: (608)267-3579 Bureau of Management & Budget Internet: birred@dnr.state.wi.us . . . . . . . . . . . . . . . . . . . "To know, and not to act, is to not know." --Wang Yang Ming, 9th-century Chinese general