To shift the basis of competition, however, requires new competitive skills, not just the deepening of current ones.

Consider the "beer wars" and how Anheuser-Busch shifted the basis of competition in the beer industry by developing multiple competencies throughout its distribution system. Miller's introduction of Lite beer was a single-factor challenge based on deepening a not-so-unique core competency-brewing beer with fewer calories. An unqualified success, this move helped propel Miller from seventh to second place in the domestic beer industry. Anheuser-Busch not only responded with a trio of low-calorie beers (Natural Light, Michelob Light, and, later, Bud Light), it also developed new, multiple competencies on the distribution side of the business. These competencies included:

1. Hiring a cadre of experienced brand managers from Procter & Gamble who extended each brand (Michelob) into a brand family (Michelob, Michelob Light, Michelob Dark, Michelob Dry), thereby commanding more retail shelf space.

2. Locking in its independent distributors by having them make sizable investments in environmentally controlled warehouses. These state-of-the-art warehouses enabled local distributors to store for longer periods the greater diversity and quantities of beer being "pulled" through the distribution system by the brand-management approach.

3. Changing the sales system from the traditional driver-sell (where drivers peddle beer off their trucks at each stop) to a predominantly presell system (where orders are taken in advance of delivery), thereby enabling more efficient truck loading and delivery while reducing stock-outs at the retailer level.

As a result of these changes, Anheuser-Busch created the strongest beer distribution network in the United States, enabling it to widen its first-place lead by selling nearly twice as much beer as Miller.