Harvard Business Review

HBR's 10 Must Reads on Strategy

Linus Stieldorf

 For those who argue that competitors can copy any market position, the airline industry is a perfect test case. It would seem that nearly any competitor could imitate any other airline's activi- ties. Any airline can buy the same planes, lease the gates, and match the menus and ticketing and baggage handling services offered by other airlines.

Connsider this simple exercise. The probability that competitors can match any activity is often less than one. The probabilities then quickly compound to make matching the entire system highlv unlikely (.9 x .9 =.81; .9 X .9x.9 x.9 =.66, and so on). Existing com. panies that try to reposition or straddle will be forced to reconfigure many activities. And even new entrants, though they do not con- front the trade-offs facing established rivals, still face formidable barriers to imitation. 

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