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mAinTAining AlignmEnT ovER TimE 315
at least extremely difficult) to imitate, such as unique geographical locations, long-
standing brand reputations, personal client relationships, and so on. Although being
the first mover into a resource/market position is not a guarantee of advantage, in cer-
tain markets it can lead to incredibly sustainable positions.

Standard cycle
Products and services in this class (Toyota’s cars, McDonald’s fast food and Visa
credit card services) exploit less specialised resources and therefore face higher levels
of resource imitation pressure. Firms in this position often face direct competition
over extended periods of time and this encourages a kind of trench warfare between
established rivals (automobiles, banking, branded food, soft drinks, etc.). As a result,
successful companies tend to emphasise discipline (control and coordination) in
operations, and products tend to be standardised for production at high volumes
(pro duct/service line rationalisations are common in this type of firm) and are strongly
market-share orientated. The huge financial and organisational commitments that
derive from such strategies mean that firms tend to tread very carefully over their
competitive territory. Indeed, efforts to streamline these operations and make them
more lean can, if duplicated by rivals (and this is what normally happens!), bring on
even more intense resource-imitation pressures – creating fast-cycle markets that they
are poorly equipped to deal with.

Fast cycle
Products and services in this class (iPods, Intel microprocessors, mobile phones and
corporate financial instruments) face the highest levels of resource imitation pressure.
Such products/services are often idea-driven and their economic half-life (the rate of
product profit margin reduction minus reinvestment expenditure) is typically less than
two years. Once established, these products do not require complex operations to sup-
port them and are increasingly outsourced to low-cost, focused producers. To maintain
sustainable alignment, these firms must master competitive routines associated with
innovation and time to market. In his article, Williams asks ‘How is a 1 Mbyte DRAM chip
like a Cabbage Patch doll?’ The answer: both products derive their value from the idea
that information content is (unless protected by patents) inherently unsustainable.
The implications for management could seem counter-intuitive for operations man-
agers used to emphasising speed and efficiency as key strategic goals. They include the
following:
● Determining the correct speed for innovation – Too much innovation can become dis-
tracting for both the operation and its customers. The correct speed of innovation
should depend upon the sustainability of the firm’s resources. Williams cites the
example of the Campbell Soup Company, which during the 1980s launched 300
products in a five-year period. Only a few were successful and the firm had to, accord-
ing to CEO David Johnson, ‘fight the motherhood of innovation’.
● Resource cycles should influence diversification – Business history is littered with exam-
ples of firms, such as many defence contractors, who attempt to shift from their
own ‘slow cycle’ markets into seemingly attractive ‘medium cycle’ or even ‘fast cycle’
markets. Their lack of understanding and capabilities in dealing with faster resource/
requirement dynamics leaves them with over-engineered products, missed devel-
opment lead-times and exorbitant production costs etc. The key lesson becomes,
‘beware of hidden barriers to entry’.

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