Research indicates that characteristics of individual businesses explain variations in enterprise performance more successfully than characteristics of industry. Moveover, over time risk adjusted returns are remarkably similar across industries (but not firms) as one would expect if capital markets are reasonably efficient. These results call into question (or at minimum put into perspective) well entrenched market positioning approaches which posit the objective of strategy is to locate the enterprise’s products in a market niche that can be insulated from strong competition so as to generate above-average profits. The standard approach is built on frameworks from the field of industrial organization, which unfortunately tends to ignore intangible assets, innovation, firm capabilities, and disequilibrium phenomena.
