Customer Reviews

The Ultimate Competitive Advantage: Secrets of Continually Developing a More Profitable Business Model

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On an attentive reading of this book I must say it does not live to its rich promise as far as I am concerned. And it promises a lot which even transpires from its elaborate and frankly immodest format of introductions to introductions and forewords to forewords. No assurances of authors that the reader is dealing with a break-through knowledge can - though - replace the hard earned content. And the content shows surprisingly little home work done on the promised in-depth analysis of a hundred successful business entities. Instead one gets a series of real life business stories related. Not a very creative thing to write if you read business press today. Comparing this book to those of Mr.Collins who so meticuosly presents results of his research of the best companies or to such a thorough job on business models as that done by Mr. Slywotzky in his rich and clear "The Profit Zone : How Strategic Business Design Will Lead You to Tomorrow's Profits" leaves one truly unsatisfied.

This book does two things - (1) it describes how to achieve and sustain competitive advantage by examining your current business model and refactoring it to take advantage of emergent opportunities or changing business climates, and (2) it teaches you how to think out of the box.

Thinking out of the box is a prerequisite for refactoring your business model, and unlike the plethora of books on this seemingly ineffable topic, this book will provide you with the knowledge and skills to do just that. Excellent example of thinking out of the box are immediately given in the introduction - each mini study set in text boxes is anchored to one of more factors in business model innovation, and illustrate how thinking out of the box by individuals led to radically new ways of viewing their business, and the successes that came from acting on these insights. Everyone will find at least one inspiring case study in this book that elicits an Eureka! Mine was the GoldCorp case.

However, case studies--no matter how inspiring--are nothing more than interesting reading without knowing the common critical success factors in detail. This is where the book shines, because these details are exposed, analyzed and the reasons why they are important are given in a compelling way. Part One, which addresses value, cost and price is by far the most influential 114 pages I have read in any book. Most of the techniques can be found in any college-level text book, but the manner in which it's presented, and especially the chapter on eliminating costs that reduce customer and end user benefits, will inspire you to think broadly and deeply about these issues. Part Two covers how to provide sustained benefits to all stakeholders. In theory this seems easy, but too many organizations acknowledge the benefits without acting. The authors show you how to transform the theory into action and results. They also tackle the messages in Parts Three (Expand Business Model Innovation) and Four (Pursue Higher-Potential Business Model Improvement) with the same painstaking detail as in the first two parts.

This book has clear, lively writing that will hold your interest from the first page. In fact, it is so well written that you may easily overlook the experience, knowledge and skill that is woven into this excellent book through carefully chosen case studies, key questions that cause you to think, and copious use of text boxes to highlight key points or impart quick pieces of essential information. In that respect not only is this book a valuable addition to any executive's reading list, but it's a masterpiece. It deserves a place alongside the works of Michael Porter, Kaplan & Norton, and Drucker.

Consultants Mitchell and Coles have written an easily approachable business book. The book argues that every business manager should ask how to improve the existing business model. Answer? Expand your business and focus it to the areas where you can gain competitive advantage. But isn't the argument too vague and self-evident? Of course you can make more money if you have a better business model than your competitors do.

Perhaps more interesting than the argument itself is therefore the tips and expreriences Mitchell and Coles share with their readers. Based on extensive interviews with hunders of companies they tell us success stories from diverse fields of businesses ranging from computer industry to airlines and gold mines. They pose practical questions and call for an open mind. Where can you cut cost without compromising value? How could you share benefits with all who contribute? And so on...

All in all, don't take the book's title literally: I didn't find any ultimate solution or secrets in this book. Don't expect anything you wouldn't have read from somewhere else. Don't expect any detailed case analyses either. But do expect good narrative, upbeat tempo and belief in the human values. Expect an American business book par excellence. So get inspired and go create!

Some wag, a few years ago, audaciously claimed that there really was no such thing as a "business model." It is probably true that many businesses aren't so much the realization of a carefully designed model as they are the products of happenstance, survival-driven evolution, and habit. And it's probably also true that many top executives cannot articulate the model upon which their business is based. But, of course, every business is most definitely based upon a model (intentionally crafted or not).

Authors Mitchell and Coles both define what a business model is, and declare that continually tinkering with your business's model gives you the Ultimate Competitive Advantage (which is, in their words, "products and services [that] can be provided in ways that deliver more sales, higher profitability and greater cash flow than would occur if a competitor supplied the same customer"). They proclaim that the "big idea" of their book "is that business model obsolescence is *the* major unperceived opportunity for and threat to all businesses now."

Innovation, the authors argue, belongs not only in the R&D lab but in every facet of your operation. This constant reinvention, the authors argue, truly is a matter of survival: Businesses too easily get trapped by their own traditions inhibiting growth or responsiveness to changing conditions, or they fail to distinguish themselves from equally capable and awfully similar purveyors of goods and services.

Drawing on research spanning more than a decade, the authors tracked companies that performed above their competitors for at least three years under the same CEO. Interviews with CEOs provide many of the "secrets" offered by the book. The topics span pricing, corporate values, financial management, rewards for various stockholders, innovation, and many of the multiple facets that go into creating a distinct and successful business model.

In addition to providing examples from traditional corporations, Mitchell and Coles also draw insights from philosophers, point to a few examples from the not-for-profit world (e.g., Habitat for Humanity), and provide case studies of individual innovators (such as chronicling an enterprising golf caddy, tracing the exemplary evolution of Peter Drucker as a thought leader and consultant, and reviewing the career of the avant garde architect Frank Lloyd Wright). In presenting their concepts, the authors also employ devices and metaphors such as the familiar child's lemonade stand, an orchard, and a (thoroughly tortured) lily pond.

This book doesn't fall prey to the all too common ploy of promising "three easy steps to instant success," but neither does it present a linear, prescribed methodology for a reader who is eager to implement The Ultimate Competitive Advantage.

Yet the book is still process-oriented. There are plenty of insights and relevant inferences waiting to be drawn, and there is considerable practical information available to someone willing to meander through the many diverse examples and case studies while picking up the gems along that path.

My advice is to read this as an executive thought-starter: flipping, skimming and pouncing. That is, flip through the book while skimming each page. There are many helpful subheadings, salient thoughts from the text --- conveniently bolded and boxed, and especially stimulating and useful questions at the end of each chapter.

The content warrants the five-star rating, though I'm less enthusiastic about the structure. (E.g., there are more than 70 pages of preamble and stage-setting with two guest Forewords, a Preface, an Introduction, AND a Prologue all preceding the nuts and bolts. Whew!) But you'll get your time and money's worth from this research-based look at a new way to see what your business is really all about --- especially if you are a CEO, general manager, or a unit or division head (or aspire to be one).

My advice: spend time with this book. Grab it now and then as a source of stimulation for revisiting your own assumptions about your business. Using the many varied and detailed examples, rethink your truths and view them through the lens of the scores of innovative companies and inspiring individuals profiled throughout this unconventional book.

Donald W. Mitchell is Chairman and CEO of Mitchell & Co., a Boston-based management consulting firm. Carol Bruckner Coles is cofounder, president and COO of the same company. They are the authors of 'The 2,000 Percent Solution' (1999) and 'The Irresistible Growth Enterprise' (2000). This book on is split up in four parts, whereby each part consists of 2-to-3 chapters, plus an useful introduction, prologue, and epilogue.

In this book the authors aim to answer one of the ultimate business' questions of all time: "What one thing can most improve a company's growth and profitability?" The authors believe that the answer is: "having the best process in your industry for continuing business model innovation." The improvement tips in book are based on research into 100 CEOs and their companies, who (1) had been publicly held for several years and above a certain market capitalization size; (2) fastest growing stock prices during the previous three years; and (3) the same CEO was in place throughout the three years. Some additional examples were taken from the 'Value Line Investment Survey' between 1989 and fall 2000.

The 'Introduction' discusses business model innovation and the race for leadership and prosperity. "It is that business model obsolescence is THE major unperceived opportunity for and threat to all businesses now." In the 'Prologue' they introduce some great examples of business model innovators, ranging from gold-mining Goldcorp to entertainment giant Disney(land).

In Part I - 'The Most Productive Areas for Business Model Innovation' the pleasure of this book really starts. Mitchell and Coles start discussing the areas where companies can improve their operations. They split these areas up in three. The first is increasing value without raising prices and costs; the second is to adjust pricing to increase sales profitably; and third, reduction of costs that reduce customers benefits. The authors use a wide range of examples to explain their points.

Part II - 'Provide Sustained Benefits for All Stakeholders' discusses the difficult stage after the initial success of a business model innovation: The view that one success can threaten to dismantle the foundation of that success. The authors discuss methods for building a buffer for lean times and establishing a good ethical base for the company. They also discuss how leading business model innovators reward all stakeholders fairly in ways the stakeholders prefer.

In Part III - 'Expand Business Model Innovation', Mitchell and Coles explain that companies should never be satisfied with their current business model and should keep innovating. "Start first and stay focused on adding business model innovations to gain and keep a profitable competitive advantage." There is also advise how to create a culture for nurturing ongoing business model innovation within organizations. These two issues should be seen as one of the highest priority on an executive's agenda.

The final part, 'Pursue Higher-Potential Business Model Improvement', discusses how you can improve a business model innovation. This sounds strange, but by looking closely at areas of high growth and profitability can lead to exceptional results. Another method is by closely looking at the benefits you can provide and share. Especially this last method is overlooked very often by successful companies and can ultimately lead to disastrous times. Finally, the 'Epilogue' provides the five principles which can guide companies to a positive future.

Yes, this is a good book. It is not just about innovation and idea creation, it also discusses the difficult second and further stages which are often overlooked. It fills you up with an enormous amounts of tips and ideas on how to improve your current or future business model. And I do believe that that is probably the strongest point of this book, you can feel the ideas and energy flowing into your body and mind and cannot wait to start implementing them into your organization. The authors have provided a short list of key questions at the of each chapter which you should ask yourself. I have just one minor comment: The term 'business model' could have been discussed in some greater detail - I refer to Joan Magretta's Harvard Business Article 'Why Business Models Matter?' (May 2002). Highly recommended to executives, managers, and, especially, entrepreneurs. The book is written in simple business US-English.

The central message of this book is that you have to continually reinvent the way you do business in order to stay ahead of the competition. Mitchell and Coles call this "continuing business model innovation." It's very much like the experience of the Red Queen in Alice and Wonderland: you have to keep moving just to stay in the same place, and if you want to get ahead, you better start running.

Well, what's new about this? What's new is that everything in our world is now changing so fast that it is no longer enough to simply find a need and fill it, or to discover how to do something better than those who are currently doing it, and for less. You got to do that again and again, year in and year out, and you have to constantly be looking for ways to expand your services and improve your products. In short, it has to be the continuing policy and practice of your company to work toward developing a more profitable business model. This is especially true for successful companies since you WILL be imitated.

Okay, this sounds right, but just how do I go about reinventing my business model? Well, that's what Mitchell and Coles wanted to know, and so beginning in 1992 they went out and studied 100 successful companies and especially their CEOs, including such stalwarts as Clear Channel Communications, EMC, Dell Computers, Paychex, Goldcorp, etc. They asked questions and they listened. They realized that many of the business models that once worked would not work today, and that what worked today would fall behind tomorrow. They learned that gaining a competitive advantage through management effectiveness became more important than ever in the go-go nineties. But the biggest lesson they learned is that "business model obsolescence" is the greatest threat to all businesses now. Of course, they reverse this negative perception and point out that avoiding business model obsolescence is the greatest opportunity now available to your business. This way of thinking is sure to provide excitement in many stagnating businesses today, and is sure to set a fire under somebody's derriere. It might as well be yours, is the message the authors want to get across.

They support this message with a slew of examples from the companies they studied, showing how innovations in pricing, in expanding customer benefits, in creating reductions in costs, in coming up with new ways to increase market share, in adding customer value for the same or a lower price, etc. have worked for others and how they might work for you. They note that "business model innovation usually requires more mental agility than resources..." (p. 218) That's good news to hear since resources are often limited. They give case histories and recount in detail how some of the inventive CEOs took their companies from share prices in the pennies to share prices in the hundreds of dollars(!). Of course some people got lucky and expanded with the bubble, but others didn't, and those that are still successful today have innovated and are continuing to innovate. Mitchell and Coles document this truth.

The densely-packed material in the book is handsomely presented, exceptionally well-edited, and the book's design is first class. There are sidebars highlighting key information and ideas, and subtitles that allow the reader to focus quickly on areas of especial interest. Chapters typically begin with a well-chosen key-note quotation from authorities as diverse as the Bible, Sun-Tzu and Irving Berlin. The style is clear and business-like. The authors are seasoned business strategy consultants who are working on a series of books to help improve your business. This the third in the series, and the one that the authors recommend you read first. There are "Key Questions" at the end of chapters to keep you focused and to highlight and further explain ideas. The authors emphasize looking back objectively at both your company's successes and failures with the time-honored realization that we can often learn more from our failures than from our successes; and indeed the difference between a successful innovation and an unsuccessful one can be as narrow as the razor's edge.

One of the things that most impressed me about this book is the way the authors emphasize the positive aspects of being successful in business, sharing benefits, increasing not just shareholder value, but value to the customer and to those who work for and with you. This kind of enlightened self-interest approach to business is not only a pleasant departure from the Machiavellian model that one so often sees presented, but is a surer way to success, not only to success in business, but to success in life. I know from my experience with Don Mitchell that he is a wise and considerate person who understands the business world and what it takes to get ahead. This book will surely set you in the right direction, and most likely will stimulate you to do even better than you are doing, and especially help you anticipate and indeed create tomorrow's business climate.

I was not specically looking for a book on business models and got my hands on this one by chance. After I read the first ten pages (an example of a caddy, a guy who helps golf players by carrying their clubs, who developed his own business model and become prosperous), my understanding of what business models are and who can use them was turned upside down. In my ignorance, I thought that business models are used primarily by medium to large companies. It turned out to be completely wrong. A business model is a vision, an idea, a concept which distingusihes a business, gives it an edge over the competitors, and ultimately leads to commercial success of their business, be it a huge corporation or a small one-self-employed-person company. We all heard stories of successful enterpreneurs who changed the way how the business is done. With the benefit of hindsight, their ideas appear very simple, straightforward, and even self-evident. And yet, for each great success there are probably hundreds of unsuccessful busness models which led to failures. How can one predict which model will work?

D.Mitchell and C.Coles believe that one can learn from both the good and the bad experience of hundreds of people, ranking from CEOs of major corporation to tiny business. They spent years talking to people who made fortunes on their successful ideas, and to those who tried and failed. They accumulated, distilled, and analyzed in their book what they learned about the business models, the ways how they were developed, and the errors which are commonly made. While I am not in the position to judge whether "The ultimate compeitive advantage" may be of value to professionals (probably it is), I can see two groups of readers which can definitely benefit from reading it. They are owners of small businesses striving to get a greater share of the market or improve their profitability, and curious people who do not run businesses, but want to understand the way how the competitive economy works, and why some companies are doing better than the others. The book contains numerous examples which we all heard about, or even dealt with as customers (although did not necessarily understand WHY it works this way, and how it was related to the business models) - e.g., why GM was consistently loosing its market share and dropped the Oldsmobile line, or why it was good for Disney to introduce multi-day passports to Disneyland, or how Southwest airlines adjusts its destinations and pricing policy to maximize profits and customer satisfaction. The examples are mixed with discussions how to critically review the existing models and develop new ones, how to test the ideas, and how to implement them. Each chapter ends with stimulating questions and suggestions. The book is not an easy reading, be prepared to spend hours reading and thinking, but the information and knowledge gained from it is well worth the effort.

This book's main argument is that business model innovation is the best approach to establishing competitive advantage. As such, they argue that model innovation is more productive, from the perspective of upper management, than focusing on improve the operational efficiency of the existing model.

The most striking feature of this book is the sheer number of examples used. I don't think one could find a business strategy book with more examples; given the often fuzzy nature of strategy books, this is a welcomed change.

I see the book as structured into two parts: first, the authors present what business model innovation is and present a million examples; second, the authors make the case for how an organization can be designed to be flexible enough to adapt to this type of innovation, and ultimately to develop the innovation itself.

I have finished the book a strong believer in the benefits of business model innovation. I especially enjoyed the summaries at the end that help the reader apply the concepts to their own cases. As a practitioner, I look forward to trying to apply the ideas in the book in practice.

Every decade or so businesses have to master an essential new task in order to prosper. Today, business model innovation is that task. The Ultimate Competitive Advantage is the template you need to master this critical challenge. In the language of competitive advantage, continual business model innovation is the source of sustainable competitive advantage. The authors sought to find the simplest, most effective management methods that the most successful companies have used since 1992 to continually outperform competitors. They hope to find these methods by tracking and studying top performing companies while they thought of and made the changes that create these competitive achievements. That kind of real-time measurement and study of creating competitive advantages across many different studies has never been done before. The message of the Ultimate Competitive Advantage is to develop and implement a superior management process that continually improves an organisation's business model - as well as fairly and appropriately rewarding all stakeholders. Recent experience clearly shows that continual business nmodel innovation is the most powerful competitive advantage you can have now. This book is the first strategy and management process guidebook on the successful experiences of continual, industry-leading business model innovators. Mitchell and Coles have created a book which titillates and stimulates the mind into action. The authors provide valuable insights and real world examples of the most important issues separating success from failures in business today. The Ultimate Competitive Advantage is for anyone looking for a new and powerful paradigm for creating success out of the chaos in today's dynamic business climate. The Ultimate Competitive Advantage shows you how to recharging your crerativity, innovation and profit. It challenges existing paradigms and continually reinvesting the competitive landscape to your advantage. For example, rather than do more with less, learn how to do more of what counts. This book sees continual business model innovationb as the source of sustainable competitive advantage. In this, it goes beyond Michael Porter and Jay Barney. This book is superior to "Competitive Advantage" and "Gaining and Sustaining Competitive ADvantage".

John Ruskin, the 19th Century English man of letters, believed that any business deal that isn't beneficial to both parties is not business but trickery. In this book Donald Wayne Mitchell outlines ways to take your business to the top by creating (and subsequently adapting) business models that benefit all stakeholders in the business. His term "stakeholders" includes more than just shareholders and customers. In Mitchell's vision, end users, employees, partners, suppliers, distributors, lenders and communities in which the business operates (so important!) must all be taken into consideration.

You can think of this book as presenting an ecology of the business world, in which your particular "organism" must learn to survive and prosper. And just as in ecosystems competition is one driver of evolution, so also in business. That idea is old hat, and business people have never seemed to tire of the adage "survival of the fittest." However, organisms that can cooperate compete even better than those that work alone. This works for companies as well, where a focus on working with and helping others enhances one's own strength. Furthermore, organisms that cannot adapt will not ultimately survive, as the living world is in constant flux. The same is true in the business world, where using the same business model year after year is a prescription for extinction.

Mitchell effectively shows how to work with both of these concepts. Using many examples from real life businesses, he demonstrates how to build relationships -- but not by focusing on the usual manipulative Dale Carnegie type techniques (many of which were subsequently appropriated by the CIA for use in interrogations, by the way). Rather, Mitchell's way is to put yourself in the other person's shoes in order to figure out what that person needs. For instance, if you can figure out how to help your customers access more customers, you can build more business for yourself as well as for those to whom you sell.

As for continuously adapting your business model to reflect changing conditions, Mitchell warns that this has little to do with simply implementing new technology. Rather, it's about constantly monitoring and changing how you do business. He concedes it's a challenge and can be expensive. Using a detailed list of steps he walks the reader through the necessary phases -- from idea generation to testing to execution -- and then expands on those with excellent examples from businesses which he has studied.

In order to write this book, Mitchell and his associates studied businesses of many types and sizes and interviewed what must have been hundreds of managers and CEOs. The material is well organized and presented in workbook style, with questions for thought at the end of each section. The order of presentation is clear and logical, which makes the reading understandable even for someone (like me) who doesn't have an MBA.

But what I value most about this book are the positive principles it encourages. Especially in the current corporate atmosphere, we need more CEOs and managers who are willing to live by words such as "avoid business models that harm more than help any stakeholder," and "Treat all stakeholders as considerately as you would a customer whom you could not afford to lose." Brilliant! With more teachings like these, perhaps we really will be able to look forward to an era in which prosperity and responsible, mindful business practices help to create a world which meets the needs of all its inhabitants.