Coronavirus has exposed the vulnerabilities of companies whose competitive advantage is based on the ownership of unique physical assets — such as airlines and cruise lines but also manufacturing and traditional retail. There are a dozen or so companies — from Amazon to Alibaba — who create a strategic advantage by leveraging partnerships, investments, and alliances to continuously adapt their offering to a changing customer base. These companies, which have what authors call an “ecosystem advantage,” are growing during the crisis. They show how Ping An, which is comprised of a number of autonomous business ventures, has pivoted to meet consumer needs.
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Most companies cannot quickly change their business model to open up new revenue streams. Different firm activities are interlocked with one another via standard procedures. There’s a high cost to switching internal operations. The result is like a pyramid: sturdy and impressive, but rigid and brittle.
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