Final post tonight, and perhaps for a few days. After which I want to start addressing strategy in the 21st Century, as it contrasts with traditional or legacy strategies.

Freedman's discussion on competition between businesses has equal merit between nations conducting competitive strategies short of war.

The Japanese managed to combine lower cost and superior quality and then imitated each other, which meant the approach was bound to be subject to diminishing marginal returns as it became harder to squeeze more productivity out of existing factories and others caught up with the efficiency of their operations. Cutting costs and product improvements could be easily emulated and so left the relative competitive position unchanged, In fact, hyper-competition left everyone worse off (except perhaps the consumers). A sustainable position required relating the company to its competitive environment. Outperformance required a difference that could be preserved.

Note our national security documents frequently refer to the eroding U.S. technological competitive advantage due to the rapid proliferation of military related technology. So along comes the Red Queen Effect.

The problems facing companies trying to maintain a competitive advantage when everyone was trying to improve along the same metric was described as the Red Queen Effect. By focusing solely on operational effectiveness the result would be mutual destruction, until somehow, the competition stopped, often through mergers. Hopeless firms were likely to be those competing w/o end in the red oceans, instead of moving out to the blue oceans where they might create new market space. (21st century military implications?)