Three important truths about the nature of industries and competition today became evident after Elon Musk, founder and CEO of Tesla Motors, announced that the company would share its technology with competitors. They are:
1. Industries are increasingly irrelevant; it’s now the ecosystem that matters.
2. Successful companies don’t play a role; they excel at an activity.
3. “Activity focus” is the new strategic focus.
Furthermore, for a company to succeed in today’s ecosystem, it must choose one of four essential market activities – inventor, producer, assembler or designer.
Tesla, an electric vehicle manufacturer, is actually a cell company that aims to excel as an inventor in the center of the broader battery storage and charging ecosystem.
The full blog post, “Elon Musk’s Patent Decision Reflects Three Strategic Truths,” is available on the Harvard Business Review Blog Network. Paul Nunes, global managing director of research at the Accenture Institute for High Performance, and Joshua Bellin, research fellow for the Institute, co-authored the post.
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