It’s Official! Sustainable Competitive Advantage is Dead: Rethink Your ‘Edge’, It Ain’t What It Used To Be…

Competitive advantage is what separates organizations from the rest of the herd. It’s what keeps organizations alive and growing. In short, it’s the end game that counts– it’s continuously creating new competitive edges… Organizations that sustain edges are continuously looking for ways to achieve and secure enduring value. They focus on the things that can really make a positive impact or difference… They hone competencies through long-term sustainability– vision and innovation… They maintain an organizational culture based on values by investing, engaging– employees, suppliers, partners… continuously creating new competitive advantages realizing that traditional ways of sustaining competitive advantage are dead…

The ‘holy grail’ of strategy for many years was by creating a sustainable competitive advantage, i.e.; you find an opportunity, you throw up entry barriers like crazy and presumably you get to enjoy it for long period of time… But increasingly this no longer works or even makes sense due to– globalization, digital disruptions, social behavior… In response to shifts, organizations must create temporary or transient competitive edges where they– seize opportunities, develop them, learn and rethink the next stage of their competitiveness... According to Rita Gunther McGrath; organizations need to think differently about competitive strategy... they need to shift thinking from long-term, to transient competitive advantages when targeting markets…

In the article Finding Your Competitive Advantage by Jaynie Smith writes: The list of once-storied organizations that are gone or are no longer relevant is a long one. Their downfall is predictable outcome that are designed around the concept of sustainable competitive advantage… The problem is that deeply ingrained in most organization are structures and systems designed to extract maximum value from a competitive advantage when, in fact, a constantly changing market environment requires instead the capacity to surf through waves of short-lived opportunities… To compete in these volatile and uncertain environments, organizations need to do things differently… Bear in mind the following:

  • Competitive advantage is objective, not subjective: How many times do you hear a company say; You should do business with us because we deliver good quality and great customer service? Well, your idea of quality and my idea of quality may be galaxies apart. This kind of boast is subjective and tells you nothing. In fact, words like– quality, reputation, trust… when used to describe competitive advantage are so hackneyed you tune them out…
  • Competitive advantage is quantifiable, not arbitrary: Which statement is more compelling; We have great customer service, or Ninety-five percent of our business comes from referrals? When an organization makes objective, quantifiable statements such as these, the customer is more likely to believe your claims. Your company may be trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, rave, clean, reverent… And your customers may appreciate those traits. But they don’t buy from you for your ‘Boy Scout’ traits. In fact, in today’s marketplace, they have come to expect them as given…
  • Competitive advantage is not a cliché: It’s not good idea to boost that your organization ‘exceed your customer’s expectations’… How do you know what their expectations are? Your customers expect good service. How do they define good service, and how do you? These definitions are not the same. After all, who would admit to providing bad service? Again, be specific; if you provide service twenty-four hours a day, seven days a week– and the others guys don’t– say so…

In the article Rethinking Competitive Advantage by David Goldsmith writes: One of the deadliest enemies organizations will have to face is that the larger they become the greater the hidden gravity pull to stay the same, not take risks… The reality is sitting tight, not making a move, waiting to see what happens, not admitting they are losing the ‘edge’ that set them apart from the competition… has destroyed many organizations and well established brands… When everything around is changing except your organization, then trouble is not far behind…

Think about it; the presumption of stability creates all the wrong reflexes… It allows for inertia and power to build up along lines of an existing business model. It allows people to fall into routines, habits of mind. It creates the conditions for organizational rigidity. It inhibits innovation… A competitive advantage is transient, not sustainable… Organizations must constantly reassess their assumptions about how the world works, and rethink their playbook to compete and succeed…

In the article Creation Of Competitive Advantage by Jay Deragon  writes: In a world of rapid change, what matters is not what your competitors are doing but more importantly what you are doing for the customer, and how well are you doing it… Management far too often think the heart of strategy is beating the competition: Not so. Yes, being better than competition is critical to be sure, but finding and filling customers need better than anyone else is real challenge. 

When you measure against current competition you are measuring against the wrong thing.  If a competitor is currently better than you then simply copying what they do, and how they do it won’t give you an advantage… Management teams must dig deep to identify their true competitive advantage. Too often organizations create a generic version of what they perceive to be the competitive advantage… Creating the ‘right’ competitive advantage must match what the organization can realistically deliver and relevant to the markets it serves…

Achieving sustainable competitive advantage requires the constant monitoring of the competitive landscape, and management’s openness to rethinking current advantages, especially when things appear to be moving in the right direction… The business graveyard is full of once highly successful companies whose competitive advantages became obsolete and no longer effective, and still they refused to rethink the changes that were needed to keep them competitive…

According to Leslie Back; organizations must accept the reality that many of their original– ideas, beliefs, assumptions… may now very well be obsolete. They must shift thinking and focus-on anticipated future market realities, and re-imagine the competitive advantages that are required to shift, adapt… to changing markets and consumer behavior and expectations…

Collusion is Ubiquitous– It Forms a Basis of Most Business, Government… Relationships: Illegal, Immoral, or Way of Life?

Collusion is a word we’ve all come to hear on a regular basis these days… But what is collusion? According to Black’s Law Dictionary: Collusion, n: Where two persons (or business entities through their officers or other employees) enter into a deceitful agreement, usually secret, to defraud and/or gain an unfair advantage over a third-party, competitors, consumers, those with whom they are negotiating. It can range from small shopkeepers, to multinational companies, to major league sports team owners… 

Most common forms of collusion include; price fix, limit production, divide markets, limit opportunities, wage fix, kickbacks… Collusion is progressive drug; participates need to lie and collude more and more to maintain the false feeling of emotional safety. When they collude, they are ever fearful that they will be ‘found out’… Colluding is exhausting, requiring inordinate amount of– physical, emotional, psychic energy… continually shoring-up relationships that have no true foundation built on trust or truth…

In the article Is Collusion Illegal? by Lee Lofland writes: The crime of collusion (assuming it can be proven) falls under heading of antitrust law (also called competition law)… and it’s used to protect consumers from shady business practices, ensuring that fairness in competition exists in marketplaces, and is enforced in U.S. under Sherman Act… However, now days the act of collusion is being applied to political issues. But is it relevant or crime when it involves political activities? Consider the following:

  • Taking advantage of what another person or group does during an election is not illegal. It’s maybe a bit of political ‘not-so-nice’, but it’s not a federal crime to do so…
  • Asking someone to release information about political opponents is not illegal unless parties asking obtained information illegally, i.e.; wiretaps, illegally recorded conversations, etc.). Still, the act of asking to release information is not in itself a crime…
  • A person or group of people supporting a political candidate is not a federal crime, even if that person(s) releases potentially damaging information about politicians running for office, e.g.; favoring one above the other: Not illegal = no crime…

In the article Collusion Between Companies by Ronald Kimmons writes: Collusion results when companies get together to make secret agreements that are possibly unethical or illegal because they operate to the detriment of a third-party. While laws and regulations exists to help deter collusion between businesses, such activities are common practices, either overtly or covertly… Also, a practice known as ‘conscious parallelism’ also produces the same effect as outright collusion…

The practice of ‘conscious parallelism’ may not be strictly collusion because it does not come as result of an actual agreement between firms but it produces same results. For example; when one petroleum company raises prices due to increased production costs, then other petroleum companies may follow suit even if they don’t face increased production costs… This allows them to stay price competitive and increase their profit margin without fear of being undercut by the competitor…

In the article Collusion, and Bad Management by Peter Vajda writes: In everyday working world, there are various forms of collusion… Collusion is ubiquitous they are things like; ‘giving to get’, ‘scratch my back and I scratch yours’, ‘going along to get along’, ‘one hand washing the other’… Others include;

  • Collude is when you support an unethical or incompetent leader, manager, supervisor, direct report or co-worker so you both can feel emotionally safe with each other…
  • Collude is when you share insider information with only a select few so you’ll be viewed as caring about them and they will feel they’re special. You become duplicitous and inappropriate in your actions of giving and receiving…
  • Collude s when you verbally gang-up on a third-party through bullying, sarcasm, or gossiping, experiencing a false sense of connection and camaraderie with your co-colluder at the expense of the third-party…
  • Collude is when you withhold honest and forthright comments about inappropriate behavior for fear of alienating another whose work you respect…

In the article Collusion Between Business and Government by Eric Banfield writes: Much political rhetoric centers over whether a particular policy is ‘favorable to business’, or whether a candidate is ‘pro-business’. When politicians speak about being ‘pro-business’, they try to create the impression they will do things to benefit the business climate; that help can come in two forms: One form is the promise of deregulation, or promise to fight new regulations, or taxes that will potentially harm the economy, or industry, or firm… This is generally ‘negative’ help, i.e.; the politician will focus on what the government should not do regarding a business’s activity…

The second form of ‘pro-business’ help is ‘positive’, i.e.; the government takes some action that specifically helps business or industry, usually at expense of others, e.g.; government creates some law or regulation that allows business to do, or have something it could not otherwise do, or have in a true free market… Hence it grants what amounts to privileges– bailouts, subsidies, trade protection… All  privileges are perfectly legal, as business lobbyists and activists quickly point out; but legal doesn’t mean moral…

Many in business, organizations, government, politics… see the process of collusion, as simply– ‘the way things are done’ or’ that’s how to play the game’… Collusion is a fact of the real world it allows greedy groups to empower themselves at others’ expense. It’s a ‘gray area’ but knowing what is morally right is not…

Cartels– Sinister-Side of Dominating $3.5 Trillion Markets: Slippery Subject, Dicey Business Strategy…

Cartels are silent extortions that undermines the efficient functioning of markets– they monopolize industries, markets… globally. And it’s the collusion side of cartels that’s the most serious form of anti-competitive behavior. According to aliakber; cartels are formed to exploit markets, industries… to control, enhance profitability… they eliminate, manipulate competition to achieve their goals… Without competition they can– fix prices, limit supply, rig contract bids… these anti-competitive strategies can be extremely profitable but long-term most fail…

 A survey of hundreds of published economic studies and legal decisions of antitrust authorities found that the median price increase achieved by cartels in the last 200 years is 25%… Private international cartels (those with participants from two or more nations) had an average price increase of 28%, whereas domestic cartels averaged 18%…

However, cartels are economically unstable there is an incentive for members to cheat by selling at below the agreed-on price or selling more than the agreed-on production quotas… According to Jeffery Fear; there is no mystery as to their objective– their aim is to dominate industries, but research suggests that over the long-term they fail more often than not, due to greed…

In the article Businesses Ruled By Cartels by Rakesh Sharma writes: A cartel is an association whose members typically control commodity pricing in targets market by controlling supply, demand… members span the value chain and monopolize an industry… And history is rife with examples of major players in an industry colluding to set prices and control supply… This is because some nations and organizations look to circumvent competition, which negatively affect them by driving down prices and reducing margins… In some industries, e.g.; diamonds… cartels are result of individual players that collude to protect their economic interests, and slow-down the pace at which an industry moves toward commoditization…

In the article Business Cartels by Pauline Yu writes: Businesses that form cartels usually trade in prime commodities, e.g.; basic minerals, sugar, rice… They start by hoarding a commodity causing a fake shortage in the market. By doing so, the demand for the commodity increases due to shortage and after a period of time these businesses will start to release the commodity into the market bit-by-bit at much higher prices… There are many documented cases of such activities in many countries around the world, e.g.;

The Philippines had once fallen prey to rice hoarders who would store the rice in large warehouses and they would keep it stored until prices go up before they start releasing their products to the market. Even criminal elements form cartels to capture and control markets, e.g.; drug traffickers… Essentially, forming such arrangement  manipulates the market by controlling the availability of supply… While this is an effective way to control markets, maximize profit… they are illegal in many countries…

In the article Cartels and Collusion by David A. Mayer writes: Cartels go through periods of cooperation, competition. When prices and profits are low, the members have an incentive to cooperate and limit production… But when the cartel is successful it gives individual member an incentive to cheat. Under these circumstances individual membersdriven by self-interest (greed), begin to exceed quota, rise prices… and in effect break the cartel’s code of conduct…

The incentive to break the agreed code of condition is contiguous, once one member cheats then others usually follow and eventually prices fall as they collectively cheat… However cartels do find ways to discourage members from cheating, e.g.; drug cartels use assassination, kidnapping… whereas, OPEC uses something a little more civilized… But generally cartels contain seeds of their own destruction… Most are unstable and eventually disbanded, and allowing industry to return to a more normal competitive environment…

Cartels are a surprisingly slippery subject; there is no mystery as to their dynamics, yet those dynamics are not sufficient to explain any given formation… According to Jeffrey Fear; the weight of research stresses why cartels fail, rather than why they endure… Research shows how difficult it is to maintain them in face of market forces, innovation, technology advances… For example; following World War II several agreements were struck to govern trade in commodities, e.g.; wheat, sugar, tin, coffee, olive oil… During these times several nations and organizations negotiated deals to stabilize commodity price levels, but all of the agreements eventually collapsed with the notable exception of OPEC, which itself is now slowly unraveling…

The cartel question highlights the trade-offs between costs of stop-go, boom-and-bust volatility under capitalism and the benefits of moderate stability and risk management, between price and quality, between consumer and producers– trade-offs not easily answered. According to Graham and Richardson; while competition is familiar to most organizations, few reflect deeply on cooperation, e.g.; strategic partnerships, alliances, joint-ventures… Cartels provide one forum for reflecting on how and when cooperation can be efficient, innovative…      

Power of Purpose, Most Organizations Know How, What, When: But Very Few Know ‘Why’ They Exist…

Why does your organization exist? This may sound a bit existential but it’s a powerful and important exercise… What would happen if your organization just went away; it simply vanished? What would the world be missing? The ‘why’ questions are fascinating; some of the most powerful outcomes are a result of asking questions that start with– ‘why’ or ‘why not’… Every human being, every single organization on the planet knows ‘what’ they do, and many know ‘how’ they do it… But very, very few organizations know ‘why’ they do what they do… According to Simon Sinek; to make a profit is not a ‘why’ it’s a result… ‘Why’ is the deep seeded purpose of the organization… ‘Why’ is driving force behind the messaging… It reflects the importance people attach to an organization and the reasons for its existence beyond just making money…

There’s power in breaking something down to its core, to its essence and very heart of ‘why’ it exists; it means getting clear definition of purpose. Knowing the ‘why’ lays the foundation for organizations to move forward in developing– strategies, decision-making… According to Ron Goerz; most organizations give little thought to the ‘why’ question and so operate in short-sighted, reactive mode, often lose their way by getting involved in random pursuits… According to Jeph Maystruck; once an organization understand ‘why’ they exists, then it’s much easier for it to understand– ‘what’ to sell, ‘how’ to sell… To succeed business must first know ‘why’, then know ‘what’, then know ‘how’– in that order… 

In the article Why Does Your Company Exist? by Simon Sinek writes: The mistake many organizations make is that they talk about ‘what’ they do, and ‘how’ they think they are better… but there no mention of; ‘why’ they exists in the first place… It’s the ‘why’ that differentiates organizations… The most successful organizations start their messaging with ‘why’ they exist, their purpose. Then they move on to ‘what’ they do, ‘how’ they do it… According to Mr. Sinek; the relationship between why, what, how…  is known as ‘the golden circle’…

In the article Why Does an Organization Matter? by Sitima Fowler write: Not many managers and employees know the ‘why’ of their organization. Every organization knows ‘what’ they do: They know the product or service they deliver. Most organizations know ‘how’ they do it: It’s the process and workflow they follow… However, if you ask most management or employees in an organization; if they know ‘why’ they do what they do, you may get a blank stare…

Organizations that really know the ‘why’ of their business (purpose, reason for exiting) are the ones that win… An organization ‘without’ purpose will ‘manage’ people, resources… while an organization ‘with’ purpose will ‘mobilize’ people, resources… According to Alexis Dada del Hierro; knowing purpose is key for a strong, sustainable and creative culture. It’s an unseen-yet-ever-present element that drives an organization: It’s the strategic starting point, the differentiator, and the organic attractor for management, employees, customers...

In the article Does Your Business Have a Reason To Exist? by John Morgan writes: The reason many organizations fail to differentiate themselves is because being different is very hard… Developing a unique purpose or innovation that will changes an entire industry is very difficult, but in many cases its not actually necessary… You don’t have to flip an industry on it’s head to stand out, but you must offer something different; bring something new to the table; do something of value that’s worth people’s attention… That means have a compelling ‘reason to exist’, or you’re just taking-up space… According to Allan Dib; many organizations just exist without a reason

Most organization have much ‘know-how’ but very little ‘know why’. According to Ralph Waldo Emerson; the man who knows ‘how’ will always have a job, the man who also knows ‘why’ will always be the boss– there must be a balance of– ‘know why’, ‘know how’ in order to generate positive results According to Wisdom Chitedze; problem is we get so caught up in the nitty-gritty of implementation that we forget ‘why’ we are here in the first place… Without knowing the ‘why’ of an organization it’s a pursuit of an existence that doesn’t matter…

In the article Purpose-driven Business: Mission Matters by Jan Bruce writes: Success isn’t just the sum of all you do in any given day or even in a given year, and excellence isn’t a list of to-do’s… The way to success is the degree to which you are purpose-driven, i.e., the ‘why’ matters more than just the ‘what’… Purpose is the thing that will keep you afloat; when you have it, you can get through just about anything. According to Lisa Earle McLeod; people want to make money but they also want to make a difference– creating culture of purpose is how you do both…

Simply put, the purpose-driven concept is based on the principal that when given a purpose– employees strive to do more because they feel more valued… Many organizations do not lack strategy, they lack a reason for existence– they lack the ‘why’, they lack ‘purpose’… According to Charles Prabakar; just strategy without purpose is like kicking the ball to the goal post, without knowing where the goal post is. In other words, strategy is a compass and purpose is a guiding light.

Purpose must be clearly defined, authentic, meaningful and aligned with an organization’s strategy… The predominant characteristics of an organization with purpose are; focus, clarity, motivation, passion, fulfillment… However, many organizations resemble boats lost at sea and the few that are successful– follow the light coming from a well-defined purpose…

Golden Rule of Capital Structure for Business– Right Mix of Debt, Equity, Risk: Cost of Capital Does Matter…

The primary goal of management is to maximize ‘value’ of the business. Business value is driven by two factors: First, ability of business assets  to generate cash flow… Second, minimize the business’s cost of capital by developing appropriate capital structure… Businesses need capital (money) to function– its the life-blood of any enterprise… Capital structure is the business mix of financing methods. It’s characterized by a trade-off between risk and return… The term capital structure refers to percentage of capital at work in a business…

Broadly speaking, there are two forms of capital: equity capital and debt capital. Each type of capital has both benefits and drawbacks and a substantial part of business stewardship and management is to find the perfect capital structure in terms of risk/reward payoff… Setting the right capital structure is a balance between maintaining financial strength of the business and provide sufficient opportunities to create growth opportunities… Get it wrong and a bad decision on capital structure can result in a company losing control of strategy. But get it right and business can grow with the confidence that it has sufficient financial flexibility to take advantage of opportunities as they arise as well as providing protection in tough times… 

In the article Capital Structure: What it is; Why it Matters by Kateri Zhu writes:  A business’s capital structure is arguably one of its most important choices. From a technical perspective, capital structure is defined as a careful balance between equity and debt that a business uses to finance its assets, day-to-day operations, future growth… From tactical perspective however, it influences everything from– the business’s risk profile, how easy it is to get funding, how expensive that funding is, the return its investors and lenders expect, and degree of protection from bad business decisions and economic downturns…

A business capital structure serves several key purposes: First and foremost, it’s effectively an overview of all the claims that different players have on the business, e.g.; the debt owners hold claims in the form of a lump-sum of cash owed to them, and the equity owners hold claims in the form of access to certain percentage of business’s future profit… Secondly, it’s heavily analyzed when determining how risky it is to invest in business, and also how expensive the financing should be. Consequently all else being equal, negotiating funding for a business with debt-heavy capital structure is more expensive, than getting that same funding for a business with an equity-heavy capital structure…

In the article Determining Ideal Capital Structure by Philip J. Isom writes: In today’s business uncertain climate, it’s critical for most businesses to optimize capital structure and make sure that they retain access to capital. The challenge is to create a structure that is workable through multiple business cycles, and determining optimal capital structure is an important step. In simplest terms, business debt capacity comes down to ability to repay debt, and support ongoing working capital. However, it’s not always easy to predict cash flows, especially in a volatile economic climate…

A business must have a comprehensive understanding of its financial position before it can determine what its capital structure should look like. It’s not uncommon for two businesses in the same industry to have identical debt-to-equity ratios… however, these same businesses may have very different cash flow capabilities due to differences in growth rate, cost structure, profitability… Further, the more volatile and uncertain a business’s cash flow; the more uncertainty there is in its ability to meet their debt obligations. Business with extremely unpredictable cash flows should usually assume that less debt is more advisable…

In the article How Strategy Shapes Capital Structure by W. Chan Kim and Renee Mauborgne write: When executives develop a business strategy, they nearly always begin by analyzing the market/industry in which they operate. They then assess the strengths/weaknesses of competition and with these analyses in mind, they set out to carve a distinctive strategic position where they can outperform rivals by building a competitive advantage…

Although all these analyses are necessary, they are not sufficient for business success… In order to make the right decisions, businesses must also fully understand their specific macro- and micro-economic risks that can affect their competitiveness… In addition, the appropriate capital structure is critical decision for business… The decision is important not only because of the need to maximize returns to various business constituencies, but also because of the impact such a decision has on a business’s ability to deal with its competitive environment…

The first duty of management is to ensure the long-term survival of the business… In a world devoted to quick fixes and short-term thinking, it’s difficult for many executives to take the time to think through all the serious challenges... Unfortunately for many business’s their capital structure seem to be an issue that is often left until there are serious financial problems… Capital structure differs from business-to-business and each business must consider the specific factors that impact their financial health… The aim of optimizing capital structure is quite simple– apply various forms of debt and equity to fund growth initiatives, while minimizing the average cost of capital…

There is no one set formula to determine the best capital structure for a business; each must take into account its own business issues, initiatives, employee skills, risk tolerance, industry regulation… The key lesson and real difference between business success and failure is the alignment of business strategy and its financial structure. Learning this lesson can save business billions of dollars that are being wasted on market-creating innovations that fall short, due to lack of appropriate capital balance…

ISIS Terror Business Model Has Failed– Lost Land, Lost People, Lost Funding– But Not Dead: Adapt to Fight Other Ways…

A business model is the conceptual structure supporting the viability of an enterprise, which includes; its purpose, goals… and its ongoing plans for achieving them… At its simplest, a business model is a specification describing how an organization fulfills its mission… In essence, the ISIS business model can be described as: establishing a Islamic caliphate across Middle-East and taking over responsibility for, and control of, the whole Muslim population, and eventually spreading across the whole world… An integral part of the ISIS business model is a carefully designed military strategy, including; terrorism, population disruption, panic, violence… Implied in this business model is the eradication of the Sykes-Picot Agreement that shaped the Middle-East’s territorial boundaries for the nations of the region…

However running an enterprise, whether it’s ISIS or anyone else, is a very risky endeavor– estimated 49% of enterprises fail within first five years and approximately 30% of enterprises don’t even make it through first two years, while others have even higher failure rates. Most fail due to– lack of direction, poor planning, poor leadership, lack of funding, flawed expectations, poor execution… In the case of ISIS, its ideology is so extreme and its strategy of terror and intimidation so inhuman that its business model is not sustainable…

Hence, it’s now losing territory, people, funding and according to studies; amount of territory controlled by ISIS has shrunk by over 75%, and as territory shrinks, so does its people influence and revenues, and the predatory economy of exploitation no longer works… The group’s budget was roughly halved in two years, from between $970 million to $1.89 billion to currently less than $520 million… According to Professor Peter Neumann; there is good reason to believe that ISIS‘s funding will continue to decline but it’s far too early to declare its total demise..

In the article ISIS Business Model is Failing by Christopher Reuter writes: ISIS is in deep financial trouble. A study by King’s College in London provides the first in-depth look at ISIS’s revenue structure and why its business model is now failing… Where does ISIS actually get its money? How does the ‘wealthiest terror organization in the world’ finance itself? Researchers from King’s College together with auditing firm Ernst & Young, have sought to systematically analyze ISIS finances.

In their report titled ‘Caliphate in Decline’, they used media reports, ISIS documents, publicly available government papers and their own research to examine how ISIS finances itself and how healthy their finances currently are. The study jettisons the cliché which holds that clandestine backers are behind the ISIS group, noting that there is no proof of such donors… also claims that kidnappings for ransom and the smuggling of antiquities are not significant revenue streams. Rather, most of group’s money comes from ‘taxes and fees’ that are imposed in the areas under the group’s control. Oil revenues come in second, followed by ‘looting, confiscations and fines’… Few key findings from the report:

  • Estimates vary widely. It remains impossible to say exactly how much money ISIS has at its disposal…
  • ISIS’s most significant sources of revenue are closely tied to its territory. They are: (1) taxes, fees; (2) oil reserves; (3) looting, confiscations, fines… There is no evidence that foreign donations are significant. Similarly, revenues from the sale of antiquities and kidnap for ransom, while difficult to quantify, are unlikely to have been major sources of income…
  • In years since 2014, ISIS’s annual revenue has more than halved: from up to $1.9 Billion in 2014 to a maximum of $870 Million in 2016. There are no signs that the group has created significant new funding streams that would make up for recent losses. With current trends continuing, the ISIS’s ‘business model’ will soon fail…

In the article Is ISIS Business Model Sustainable? by Paul D. Shinkman writes: In long-term, ISIS business model as currently conceived is not sustainable; although ISIS-like or al-Qaeda- like enterprises will continue to evolve… According to Peter Neumann; this is especially true for ISIS inspired terror attacks, which rely on the ‘mentoring’ of lone attackers via personal messenger apps… While ISIS finances are certainly hurting and they have lost over two-thirds of its territory, they and their surrogates will continue to terrorize the region and the world,.. According to Andrew Byers and Tara Mooney; the world must be prepared for two future threats: ISIS post-caliphate evolution, and groups that will inevitably follow ISIS and perhaps pose greater threats to regional and global security…

Even without territory, ISIS will likely maintain its expansive online propaganda machines and continue to spin its messages of– hate, destruction, world domination… For zealots, loss of territory is no longer as important as continuing to fight, and defeats are simply tests to determine who is a true believer… According to Luay al-Khatteeb; if nations are to marginalize ISIS type terrorism, they must first degrade and destroy the ideology… Wars on radical ideologies are not fought only by guns, but by education and stopping all financing efforts that lead to radicalism…

The ISIS business model is highly flexible and they have demonstrated a fair amount of agility… When the caliphate didn’t work ISIS adjusted the business model and adopted guerrilla and insurgency strategies… It’s relatively easy to make transition from conventional to guerrilla forces. As ISIS evolves insurgency ‘business model’ it will continue to prove a challenging fight… Groups inspired by radicalism inevitably will follow ISIS’s lessons and emerge in a power vacuum left behind by ISIS as it continues to retreat… Terrorist groups have learned from ISIS’s failure and success; just as al-Qaeda served as a model for ISIS, so too, ISIS will serve as business model for future terrorist groups…

Dead-End Strategy– The Road to Nowhere: Stuck-in-the-Middle, Caught-Between-Rock-and-Hard-Place…

Business is damned if they do and damned if they don’t, especially when it’s — stuck-in-the-middle, caught-in-the-middle, being-between-rock-and-hard-place… In a book published by Michael E. Porter, several decades ago, he defined a central premise of competitive business positioning… In it he said– business strategy provides a unique way of creating sustainable competitive advantage, consequently companies must make a decision between one of three generic strategies– cost-leadership, differentiation, niche focus… or the business will get ‘stuck-in-the middle’ without a coherent strategy...

This notion of generic strategies has shaped thinking on strategic positioning ever since… However, this theory has been plagued by one inconvenient fact; the real world is full of business that do succeed from the ‘middle’… But according to many experts; the real issue is not the ‘middle’, it’s the fact that businesses are just getting ‘stuck’ without viable strategy… For businesses to succeed they must be the– ‘most’ or ‘best’ in something, e.g.; most affordable, most performance, best value… Just being ‘ordinary’ and ‘middle-of-the-road’ in age of hyper-competition and non-stop innovation– is the road to nowhere. As they say in Texas; only thing in ‘middle-of-the-road’ are yellow lines and dead armadillos… To which you might add; and that’s where many once-great businesses go to slowly die…

In the book Competitive Strategy by Michael Porter writes: Business can secure a sustainable competitive advantage by adopting only ‘one’ of three generic strategies, i.e.; cost leadership, differentiation, niche focus… and when a business attempts to adopts more than one or combination of these three strategies, then the business becomes ‘stuck in the middle’, which is a losing proposition… That is to say; a business that is ‘stuck in the middle’ has no clear business strategy and is at serious risk for failure…

However, according to John Kay; Porter’s strategy is embarrassingly simple, i.e.; it’s true that a business that fails to develop strategy in at least one of these three directions is in a very poor strategic situation, but the notion that business cannot pursue a hybrid strategy, e.g.; both cost leadership, differentiation… at same time is clearly false. However, there are differing options on this ‘stuck-in-the-middle’ theory, e.g.; business must understand that customers, markets, competition… are not static and for them to survive, grow, prosper… they  must be flexible, nimble, innovative… and avoid getting ‘stuck’ at all…

In the article Stuck-In-The-Middle by Paul Simister writes: Being stuck-in-the-middle comes from trying to compromise in developing a strategy– it creates ‘muddle’ and muddle is bad, muddle confuses customers– they don’t really know what a business stand for, or what to expect from a business… Muddle confuses employees– they don’t understand priorities and that impacts work performance…

A stuck-in-the-middle position can happen when a business, e.g.; that was created to be ‘low cost’ provider starts adding extra frills, which don’t add corresponding value to customers; and that results in additional cost to the business, without additional value to the customer… Or, when a business strategy based on ‘differentiation’ comes under pressure on price– perhaps due to market disruption from new technology or low-priced competitor… and in reaction business starts panicking and cutting costs in areas which damages their original competitive advantage…

If  a business is ‘stuck-in-the-middle’, or heading in that direction– they must critically review and adjust, or complete rethink their strategy going forward: They must decide; what the business mission and purpose is, and what it isn’t. They must decide; what the target market is, and what it isn’t. They must decide who the customers are, and who they are not. They must decide what the value proposition is, and what it isn’t… Strategy is about making wise choices and then having the courage, conviction to follow through– it’s commitment to turning– words, ideas, plans… into action…

In the article Stuck-In-The-Middle by Bob Bruner writes: The issue is not being in the ‘middle’; it’s allowing a business to get– stuck, in the first place. There is much research on business strategy suggesting the ‘middle’ should be avoided for fear of being ‘stuck’ with limited options to compete… The conventional wisdom is to view the ‘middle’ or ‘caught between two competitors’ as a no-win situation… But the challenge for business leaders is not to avoid being in the ‘middle’, but rather to avoid an inability to respond to different competitive conditions… 

But days of muddling along without a clear strategy are numbered in this fast pace, highly competitive age of technology, e.g.; internet, smart phones, social media, big data, cloud… These are the nightmare of many organizations that are just ‘muddling along’, ‘stuck somewhere’ without a well-crafted strategy… These are organizations that have long relied on customer confusion, or ignorance, or apathy… However in this age of technology competitive rules are different and organizations must choose a coherent, winning strategy, or they will be on a dead-end road to nowhere…

Subtle Shifts in Business, Leadership, Management, Organization, Strategy, Innovation– Bring Big Results…

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