In 1966, Bruce Henderson, the founder of the Boston Consulting Group, introduced the concept of the experience curve, a pivotal idea in business strategy. This concept was inspired by T. P. Wright’s 1936 paper on airplane production costs, which revealed a link between the cumulative production of a product and the reduction in production costs. The experience curve suggested that as companies produce more of a product, they become more efficient, leading to lower costs. This insight allowed businesses to predict future cost structures more accurately than their competitors, giving them a strategic advantage. However, in today’s digital age, the relevance of the experience curve may be diminishing as the focus shifts from physical goods to digital products and services, where production dynamics differ significantly.
QUESTION: How might the shift from physical goods to digital products impact the strategies businesses use to maintain a competitive edge?
Why we need to rethink scale
