Position or Capability? Competitive Forces Versus Dynamic Capabilities

There are two rival ideas about where a lasting business advantage really comes from, one looking outward and one looking inward. The outward idea focuses on the market. It says firms win by finding a strong, defensible spot in their industry and building walls that rivals cannot easily break through (Porter, 1980, as cited in Teece et al., 1997). In this view, strategy is mostly about studying the competition and grabbing a position they cannot attack.

The key insight: position wins the current contest and adaptability wins the contests still to come — a firm needs both, in that order.

The inward idea looks somewhere quite different. It says a lasting advantage comes from inside the firm, from being unusually good at constantly combining, building, and rearranging its skills as the world changes (Teece et al., 1997). What matters most, in this telling, is not the spot a firm holds today but its ongoing ability to keep reinventing itself for tomorrow. Strategy becomes a question of adaptability, not just placement.

The contrast gets sharper when markets turn turbulent. A strong position can look unbeatable right up until a sudden shift in technology makes it worthless, leaving the well-placed firm stranded. On the other hand, a firm that is great at reinventing itself but holds no strong position today may struggle to make money from its agility right now. Each view seems to leave a dangerous gap that the other fills, which suggests neither one tells the whole story on its own.

These ideas come together not as a contradiction but as a sequence. A strong market position protects the money a firm makes today, while the ability to keep adapting is what lets it hold on to and renew that advantage when technology and markets inevitably shift (Teece et al., 1997). Position guards today's profits, and adaptability secures the power to win again once today's profits fade. The two work on different time horizons and serve different but linked jobs in a firm's long survival.

The practical takeaway is that firms need both, in the right order. Locking down a strong position matters in the near term, but treating it as permanent invites eventual ruin, because no position survives a changing world forever. Building the ability to adapt is what carries a firm from one period of advantage to the next. Position wins the current contest, and adaptability wins the contests still to come.

Where this fits in the SalesEvolution system

A sales organization's "position" — its brand, its key accounts, its proven motion — protects today's revenue, but the teams that endure also build the capability to keep reinventing how they sell as buyers and technology shift. That's the strategic case for treating AI adoption and continuous re-skilling not as one-off projects but as a standing capability, the theme of building a digital sales strategy and unlearning sales habits. Developing that adaptive muscle is what our coaching and training exist to do.

Every claim above links to its peer-reviewed source; browse the full research & sources.