The End of Competitive Advantage - Rita Gunther McGrath

[Cigarbutt]

Full title: The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business

https://www.amazon.com/End-Competitive-Advantage-Strategy-Business/dp/1422172813/ref=sr_1_1?ie=UTF8&qid=1526296165&sr=8-1&keywords=mcgrath+competitive+advantage

 

Thought this would be relevant given recent comments made by Mr. Buffett about moats.

The value of the book is limited IMO.

 

The message of the book is that moats are not what they used to be and, going forward, "culture" and innovation will drive results as moats will be more and more transient.

 

A sustainable competitive advantage is dynamic and can be lost suddenly or gradually. In some industries, moats are more structural in nature. Maybe innovation can be seen as a relative component of moat similar to what Philip Fisher describes with companies being able to re-invent themselves.

 

I thought that Pat Dorsey's book (The Little Book That Builds Wealth) had more value in terms of giving a framework to define and identify a lasting competitive advantage in an investment opportunity.

https://www.amazon.com/Little-Book-That-Builds-Wealth-ebook/dp/B008L045N4

 

[netnet]

Harvard Business Review has an article comparing Musk and Buffett on moats and competitive advantage. https://hbr.org/2018/05/a-40-year-debate-over-corporate-strategy-gets-revived-by-elon-musk-and-warren-buffett  McGrath's work is cited.

 

Personally, I think that Musk, though brilliant, is wrong and that the HBR article also is wrong

 

• in positing that Buffett does not realize the transitory nature of moats. He's admonition to his CEO has been keep widening the moat. And per McGrath's view, of course culture is important BRK is evidence of that.
  
• Musk and Buffett are apples and fruit, i.e. Musk's view on moats is a subset of Buffett's