Competition Moves the Marbles
Marketplace competitors are like a bucket full of marbles. Each marble represents a firm and the contact boundaries between the marbles are areas of intense competition. Like marbles shifting in the bucket, as firms move in the marketplace they end up competing with different firms and their movement causes competitive shifts for the others.
Boston Consulting Group (BCG) founder and Vanderbilt Owen Professor Bruce Henderson used this powerful analogy over thirty years ago, noting that firms compete on specific dimensions with many other firms. Last month, I wrote about the legacy of Bruce Henderson, who pioneered the strategic consulting industry. If he were alive today, he would have turned 100 a few months ago. Bruce asked a very fundamental question of the firms he served—what makes you different than your competitors? He argued that competitive advantage was the result of a particular mix of characteristics that made a firm unique. Any particular competitive element may be similar to another firm, but the combination of elements made successful firms unique. If other firms had the same combination, competition would drive them into a deadly dual or merger.
Bruce had a way with simple analogies that made his ideas compelling and memorable. His bucket-full-of-marbles analogy was a classic (you can see him describe the idea in this wonderful three-minute video speaking to the BCG staff in 1980). The touching points of the marbles represent boundaries of competitive characteristics between firms. A particular marble may touch many other marbles on specific boundaries, but some marbles don’t touch at all. And any movement in the bucket can shift the competitive landscape for all firms.
While no analogy is perfect, this one is useful as we plot Owen’s strategy for the future. Over the past year, we have spent a lot of time thinking about Owen’s competitors, the areas where we are in direct competition and our unique advantages. We developed a new mission statement and strategy for the school, identifying seven key characteristics where we are investing to enhance our competitive advantage. Our mission is centered on delivering world-class business education on a personal scale. Of course, there are many other characteristics of Owen that are important and distinctive. For example, we are fortunate to be located in the economically thriving and culturally dynamic city of Nashville.
So thinking of the Owen School like one of Bruce’s marbles, we compete with many other world-class schools that are much larger and, consequently, can’t offer our unique personal experience or famous Owen culture. In my last blog post, I described how we are investing in our personal-scale approach to further our advantage over these formidable competitors. On the other hand, we also compete with other schools that deliver a personalized experience but are not world-class. These competitors don’t have internationally recognized faculty and programs, nor do they benefit from a diverse and global student body. Over the past decade, our MBA program has steadily risen in important national and international rankings. Our young masters programs in finance (MSF) and accounting (MAcc) have quickly achieved national recognition—for example, last week our MAcc program was ranked number one by one of the first MAcc program rankings to appear. Finally, the Owen school is part of a powerful university that is also on an ascent.
Our strategy is to continue investing in characteristics that enhance our world-class reputation. For example, we are attracting and developing world-class faculty and staff. We do this by providing an intellectual environment that attracts and facilitates scholarship. Specifically, we have expanded our postdoctoral program that brings young scholars to Owen to collaborate with our faculty. We are also launching new centers that provide resources to conduct path-breaking research, like support staff, labs and funding to run conferences that bring more scholars to Owen.
The results are readily apparent. Simply look at the media coverage that our faculty has earned over the past few months. Long-time faculty member and Financial Markets Research Center Director Bob Whaley’s work on stock market volatility has been featured in the Wall Street Journal, New York Times and in multiple radio interviews. On the other end of the spectrum, several of our newest faculty members have had their work profiled by high impact media outlets. For example, Fast Company featured Professor Kelly Haws work on learning from your mistakes; Professor Jessie Blocher’s work on exchange traded funds was highlighted in the New York Times; and Professor Jessica Kennedy had her research on ethics and gender featured in articles in the Wall Street Journal, Forbes and Fast Company. And of course there are many others. Forbes featured Professor Jenny Escalas’s work on storytelling; Wall Street Journal highlighted Professor Miguel Palacios’ work on student loans; and CNN profiled Tim Vogus’ insights on physician bedside manner and the Wall Street Journal covered his work on hospital rankings. I could go on and on, but there is no doubt we are hiring and developing world-class faculty.
The same is true for staff. We have brought many new staff to Owen over the past three years, with world-class experience at other top universities like Cornell, University of Virginia, Dartmouth and Georgia Tech. Others came to Owen with impressive corporate experience from companies like Bain, Hilton, Chevron, Lifepoint Health and KPMG. Finally, one look at this year’s incoming classes, from MBA to MSF, shows they are strongest in Owen’s history and among the top business students in the country. Importantly, Owen is truly global, with students from 33 countries in this year’s entering classes.
Throughout the year we will continue highlighting our strategic plan and announcing new initiatives to strengthen Owen’s competitive advantage. We are taking Bruce’s message to heart—continually asking, “what makes me different than my competitor?”
Enhancing our world-class position while fostering our personal-scale approach is at the center of everything we do.