Rita McGrath, Columbia Business School professor and author of the article, “Transient Advantage,” discusses several traps that can blind a company to the need for imminent changes to their strategy to preserve competitive advantage. These traps, discussed in the second half of the article, include: the first-mover trap, the superiority trap, the quality trap, the hostage-resources trap, the white space trap, the empire-building trap, and the sporadic-innovation trap.

Locate and post a link to an article in The Wall Street Journal, or another reputable source, about a company that fell victim to one or more of these traps.

• Identify the trap(s) and discuss why you believe the company’s management missed the warning signs.
• What were the impacts that resulted from falling for the trap(s)?
• Drawing on the guidance offered by Sherman in Chapter 6, what could they have done differently to avoid the trap(s)

Answer preview

Blockbuster, a company which for many years had been a household name, fell into the quality trap. According to Peers & Ramachadran (2013), Blockbuster fell into a quality trap when they failed to transition towards a digital model like online streaming and DVD subscription, leading them to file for bankruptcy in 2010. When Netflix hit the market, the situation took place, providing the market with more movies and shows for every occasion, such as unwinding on Sunday afternoon with kids or on Saturday night. The focus on quantity made Blockbuster fall as Netflix introduced its viewers to huge libraries of content. They provided many quality television shows and movies whereby Blockbuster only concentrated on quantity, forgetting that quantity only increases the chances of someone getting something quality. The company’s management could not see the warnings as they owned more than 9000 video rental stores in the united states, which gave them the comfort of losing the market (Peers & Ramachadran, 2013).

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