What is competitive parity?

Wharton Professor Nicolaj Siggelkow explains what the term "competitive parity" means. " In many industries, what we are seeing is a process we call strategic convergence. Other people might call it competitive parity. And really what happens is that companies that copy each others' best practices, they become more efficient but they're also becoming more and more similar." "And so there's a bit of an irony here. Because all the metrics that companies are looking at, their quality goes up, their cost goes down, look good. At the same time, though, their profits don't go up. And the problem is, because we have the strategic convergence, we're ending up with firms who are very, very efficient but completely identical in the eyes of the customer. That leads to profit pressures and that's really the problem of convergence or competitive parity." Professor Siggelkow is co-academic director of Wharton Executive Education's Strategy and Management for Competitive Advantage program (https://whr.tn/2tMrAGi).