Many firms seem to get by without tightly linked systems of value creation. Why should I make it a priority for my business?

The intrinsic value of a well-developed system is perhaps easiest to see when a competitor tries to duplicate a successful firm. If you had the recipe, you could make Coca-Cola, for instance, but you wouldn't be able to duplicate its brand recognition, its supply and distribution lines, or its pricing. These are resources and activities the firm has honed over decades; the fact that they work together in a tightly linked system makes them all that much more difficult to imitate.

Years ago, some American investors tried to copy IKEA with a business called STØR. (Apparently the line through the O was supposed to hint at a Scandinavian connection.) STØR mimicked IKEA's look and products, but, after some initial success, it couldn't hold its own.

STØR and other imitators failed because they could copy only single points of advantage. As Anders Dahlvig, IKEA's group president, said: “Many competitors could try to copy one or two of these things. The difficulty is when you try to create the totality of what we have. You might be able to copy our low prices, but you need our volumes and global sourcing presence. You have to be able to copy our Scandinavian design, which is not easy without a Scandinavian heritage. You have to be able to copy our distribution concept with the flat pack. And you have to be able to copy our interior competence — the way we set out our stores and catalogues.”

Success comes from a compelling purpose, tightly embedded in an interlocking system of value creation, and does so in a way that is difficult for others to imitate.

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