How Do Enduring Firms Outlive the Environment and the Competition?

Abstract

Leaders of sustainable firms know the external environment of their firms in order to adapt and anticipate its evolution. They analyze the opportunities and threats that arise to better exploit or counterattack them. Six categories of influences shape the environment in which any organization operates: political, economic, socio-cultural, technological, environmental or ethical. They are not independent but are intertwined to make up a complex environment.

Sustainable companies have all survived countless battles with their direct and indirect competitors. They were able to eliminate their major rivals of any kind. To achieve this dominance, they identify and survey various competitors to assess their capacity to inflict harm. They take account the asymmetry of competition and the Doppler Effect which can impact the perception of the competitive situation. As a consequence they may choose the opponents with whom they want to fight at a given time.

Confronted with competition, enduring firms apply the principle of rational audacity, combining boldness and courage with prudence and defense. Their competitive strategy also evolves with time depending on their relative size and influence in the market. When small, they avoid competitors or they apply the principle of concentration. Once they are larger, they go either with flank attack, massive blow to suffocate their smaller contenders, or temporary alliances with very large competitors.