A third thing to consider is that the valuable capabilities you have today
may simply be obsolete tomorrow.
We've discussed Kodak before.
Manufactures, leading manufactures of film then find themselves in a digital world,
and those capabilities are no longer valued as they were.
We can go back to the Swiss watch industry in the 1960s.
Swiss watch makers, the best in the world at making mechanized watches here,
the old wind up type of watches.
What happened?
The advent of Quartz technology caused a major disruption in the industry.
You had entry by Japanese manufacturers, such as Casio, and suddenly, the Swiss
manufacturers found themselves on the ropes in terms of global market demand and
market share.
Now, as you can imagine, they've made a big comeback in terms of styling and
the like, but for a while there,
their core capability of mechanization wasn't relevant in a digital world.
Fourth, some assets may be more valuable to others and thus are worth selling.
Now, this is somewhat counter-intuitive to a lot of people here.
If I have a valuable asset, shouldn't I just hold on to that?
Maybe yes.
Maybe no.
Look at professional soccer.
Futball, as we call it.
There are those players who are, in essence, traded or rented out for
a while to another team.
The argument here is that those players might be worth more to that other team,
at least in the short run, than they are to the team that owns them.
Perhaps it’s because the rest of the players on the team aren’t very good and
that team isn’t going anywhere, so they'll rent that player out to a team who has
a better shot of winning the playoffs and winning a championship.
So this idea that an asset, even if it provides competitive advantage, might not
be durable because you would actually be willing to sell it to another player here.
So again, durability is a critical factor when thinking about the sustainability of
competitive advantage, and you have to ask yourself whether these capabilities we've
identified can persist moving in to the future.
