Industry architecture: shaping the structure of a sector.

The competitive environment facing businesses is rapidly evolving. Companies in many different sectors increasingly face challenges arising from new technological developments. To draw an analogy with military services, companies need to move from “tactical combat”, undertaken in stable sectors with easily identified competitors, to a “guerrilla warfare” mentality, where they must rapidly switch tactics to fight non-traditional competitors. But with much of the existing strategy toolkit built around “tactical combat”, this is a challenging task. Successful, agile companies do not just compete within their own sectors; they seek to actively redefine and reshape those sectors. The most successful companies become the “bottleneck” in their sectors through a strategy of forging alliances, changing the rules of the game, establishing webs of dependencies, and knowing when and where to compete, or not. Identifying the core values that a company brings to its sector is key to this approach. Companies need to identify bottlenecks, use them to create architectural advantages, and finally make architectural thinking a part of their organizational fabric if they are to achieve sustainable success in the new business dynamics.