ANALYSIS: Why best practice isn’t the best strategy — McKinsey

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Why best practice isn’t the best strategy

Spurious frameworks and torrents of data often obscure the basic principles of good strategy. To beat the market, companies must exploit imperfections that stop (or at least slow) its workings. Such competitive advantages are scarce and fleeting because markets drive a reversion to mean performance as middling companies emulate the best and the worst exit or undergo significant reform. Good strategies therefore emphasize difference—versus direct competitors, potential substitutes, and potential entrants—not industry-wide best practices. To learn more, read “Have you tested your strategy lately?” (January 2011).