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These choices historically conferred advantage – first-mover, scale – but asset-based scale advantages have diminished in recent years, thanks to technology, cheap information, and outsourcing. Assets are important, but they are, increasingly, table stakes in most competitive industries; everyone in the game has them.
For example, a Towers Perrin study conducted in 2007-2008 among 90,000 employees in 18 countries found that companies with the most engaged employees had a 19 percent increase in operating income during the previous year, while those with the lowest levels had a 32 percent decline.
Questions like this involving issues like politics, human rights, or equality often present themselves sooner or later for any business operating in global markets. According to Reuters reporting , until a few years ago the bank operated in Sudan, a country whose government was under U.S. sanctions, like Iran.
For the latter, we measured incumbents’ operational efficiency, commitment to innovation, and defenses against attack. But companies in this state often face increasing pressure to improve efficiency and reduce operating costs in their legacy businesses, and this pressure attracts opportunistic disruptors.
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