Will customers incur any switching costs in moving from one supplier to another?

Second, since accidents were likely, Progressive focused on minimizing their cost once they occurred. The faster claims were settled, for example, the more money Progressive could save. (Less time meant fewer lawsuits.)

If you are a current player, what can you do to raise those barriers? If you are thinking of entering a new industry, can you overcome the barriers that stand in your way?

advantage, it will show up on your P&L. For nonprofits, competitive advantage means you will produce more value for society for every dollar spent (the analogue of higher price), or you will produce the same value using fewer resources (the equivalent of lower cost). Differences in relative prices and relative costs can ultimately be traced to the

In competing to be the best, imitation is easy, and advantages are temporary. The more a company competes on uniqueness, the less susceptible it is to imitation, and advantages can be sustained over long periods of time. Great strategies are like complex systems in which all of the parts fit together seamlessly. Each thing you do amplifies the

Michael Porter has a name for this syndrome. He calls it competition to be the best. It is, he will tell you, absolutely the wrong way to think about competition. If you start out with this flawed idea of how competition works, it will lead you inevitably to a flawed strategy. And that will lead to mediocre performance.

dramatically, an adjuster equipped with a company van and a laptop could go directly to the accident scene and issue a check on the spot.

Strategy is a path, not a fixed point. An effective strategy is dynamic.

Trade-offs are the strategic equivalent of a fork in the road. If you take one path, you cannot simultaneously take the other. Whether the fork in the road is about the characteristics of the product itself or about the configuration of activities in the value chain, a trade-off means that you