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Imitating great companies can fail to make yours any better – here’s why
Strategic decisions are fraught with uncertainty. Where to locate a new plant, when to enter a particular foreign market, what process management system to adopt – making these decisions is no mean feat. That’s because they can influence a firm’s performance for years, if not decades, to come – yet we don’t know what the future holds or what our industry will look like 10 years from now.
Events like Brexit or Trump are difficult to predict and gauge in terms of their long-term impact, but so are competitive and technological developments. Before we have even had a chance to get our heads around what the internet of things and big data really imply, all the talk has moved on to artificial intelligence and machine learning.
We do know one thing about how firms respond when making strategic decisions under extensive uncertainty: they imitate other firms. When we are not sure what the future holds or what the best course of actions is, firms look around them and then do what others are doing.