Escaping the Red Queen Effect in Competitive Strategy:: Sense-testing Business Models

Abstract

Most business models are based on traditional ways of strategy formulation and implementation, leading to incremental and not disruptive change in the nature of business and industry practices. The ‘red queen effect’ refers to the red queen’s advice in Lewis Carroll’s Through the Looking Glass in which she says, in order to stay in a (competitive) place you have to run very hard, whereas to get anywhere you have to run even harder. In today’s knowledge and mobile environments we know that businesses cannot survive by just running harder, but rather by running differently and ‘smarter’ than competitors. The article suggests a sense-testing tool for managers to enable disruptive innovation of business models through corporate examples and case study evidence.