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Not walls, windows: capturing value in the digital age

Samuel Bodily (Samuel E. Bodily, John Tyler Professor at the Darden Graduate Business School, has published textbooks, cases, and an assortment of practical and scholarly articles on topics ranging from management science, revenue management, forecasting, decision and risk analysis, to strategy. He teaches executive education programs in these areas and has won awards for instruction, cases, and articles (bodilys@virginia.edu).)
Sankaran Venkataraman (Sankaran Venkataraman, Samuel L. Slover Research Professor at the Darden School, University of Virginia, is Director of Research of the Batten Institute and Editor of the Journal of Business Venturing. He teaches entrepreneurship and competitive strategy and has published widely on these topics in leading journals. He has taught in numerous executive education programs and lectured around the world (venkats@virginia.edu).)

Journal of Business Strategy

ISSN: 0275-6668

Article publication date: 1 June 2004

Abstract

Much of strategy has been about defense, building the largest castle with the thickest walls to defend position, and tying down the customer with switching costs, standards, and transaction costs. The digital age changed that, making ineffective the usual competitive advantages of size and scope, infrastructure, and the former capabilities. The metaphor has moved from walls to windows: for transparency, fresh air, connection, and some protection from the harsher elements. A proactive windows strategy assembles scale and scope collaboratively, creates relationships that make switching unattractive, develops intangible resources all along the value chain, and builds co‐specialized capabilities. Illustrative examples come from three companies that have thrived in the digital age: eBay (a new company and industry), Lending Tree (new in an old industry), and Charles Schwab (old in an old industry).

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Citation

Bodily, S. and Venkataraman, S. (2004), "Not walls, windows: capturing value in the digital age", Journal of Business Strategy, Vol. 25 No. 3, pp. 15-25. https://doi.org/10.1108/02756660410536964

Publisher

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Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited