New definitions of value.

Keeping up with best practices may not be enough, according to CK Prahalad, a leading thinker on strategy. He claims that companies can catch up using best practices, but they can not become the leader. Since strategy is not an extrapolation of the past, companies must create Next Practices, by drawing on what is happening on the periphery. They will also discover that many of the old, established ways of creating value no longer apply.

One common set of assumptions is that value is created by the firm, is held in products and services, and is exchanged between customer and firm. Others are that the value chain is sequential and linear, innovation is about products …