The recurring themes at the World Economic Forum, which concluded in Davos, Switzerland, early last month, clearly illustrated the extent to which the tectonic plates of business are shifting in unimaginable ways. 

Can the Internet and its far-reaching consequences be stopped or slowed?  No.  Can globalization and its ramifications like the Asian crisis be stifled or controlled?  Again, no.   Will the euro, the common European currency whose survival was in serious doubt only a year ago, become a reality?  Inevitably. 

Indeed, the consequences of change are already being felt by many companies.  From 1990 to 1995, a full 40 percent of the Fortune 500 disappeared from the list.  As the rate of change mounts, the rate of decline is rising for many older companies. 

At the top of the list for companies hoping to thrive in this new reality is the need to redefine the key building blocks of corporate strategy.  Managers who continue to focus solely on extending their current expertise, on beating the competition and on better satisfying their existing customers are missing the point. 

Consider Compaq Computer's transformation from a personal computer company on the brink of collapse in 1991 to the second-largest computer company in the world today.  In six years, the chief executive, Eckhard Pfeiffer, has driven Compaq's sales from $3 billion up to $25 billion and the company from a high-end PC maker to a low-end PC maker to the world's No.1 desktop maker with world-class status in portables, servers and workstations. 

Although the computer maker is experiencing some short-term set-backs, its plans to acquire Digital Equipment have positioned it to shake up the computer industry. 

Compaq's agility and forward-thinking - and the tremendous profits and growth that go with them - are traceable to a redefined view of strategy.  Following are three important considerations for companies that have accepted the challenge of reframing their strategic thinking. 

START FRESH.  In a fast changing world, today's assets and capabilities are often tomorrow's noose.  Focusing on extending them not only makes companies prisoners of the past but significantly reduces their opportunities. Instead, companies must clean the slate and ask themselves:  What would we do if we were starting anew? 

When Compaq asked this in 1991, it saw the tremendous opportunity of the low-end PC market.  Seeing that its high-value-added resellers had neither the cost dynamics nor distribution reach to capture this burgeoning market, Compaq reinvented its distribution system.  In several months, it moved from 3,000 value-added resellers to more than 30,000 dealers, including mass-market merchandisers like Wal-Mart and Circuit City. 

Companies that seize the future willingly tear down and completely rebuild.  They see numerous possibilities, and they build on the strengths of others when they themselves are short of what it takes to capture emerging opportunities. 

FORGET RIVALS.  Most companies focus on outpacing the competition.  They benchmark it and strive to build advantages over one another.  The result is imitation, not innovation. 

But forward-looking companies perpetually drive their organizations to create new markets and reinvent old ones.  Instead of competing, they strive to make the competition irrelevant by offering buyers a huge leap in value, moving ahead of the discovery curve of their industries. 

Take Bloomberg L.P.  While Reuters and Dow Jones's Telerate were competing on offering price information to traders and analysts, Bloomberg redefined the industry's boundaries.  Good-bye calculators and No.2 pencils;  Bloomberg terminals leapfrogged the competition by providing users with built-in analytics that guaranteed speed, simplicity and fewer errors in trading and investment decisions. 

As Michael Bloomberg, the founder and president, said:  "We never look at our competitors' products.  Why should we assume they know what they are doing?" 

To push managers to be creative, challenge them not to beat the competition, but to rewrite the rules. 

EXPAND MARKETS.  It's common for companies to focus on retaining and satisfying their existing customers.  That's fine in a static world.  But it is not so good in a dynamic one, where it makes companies hesitant to challenge the status quo and restrains them from taking a big leap as fundamental changes emerge in the environment. 

When this happens, companies must focus on capturing the mass of buyers, even if that means letting some existing customers go.  It's important for companies to keep their eyes on customers, but it's more important for them to pay attention to noncustomers as well. 

SAP of Germany, a global leader in business-application software, has continuously renewed its customer base by moving aggressively from mainframe users to client-server users to midsize and small companies to capitalize on the opportunities of radically shifting technologies.  Hasso Plattner, a co-founder of SAP, says, "Noncustomers often offer the greatest insights into where the market is moving and what we should be doing fundamentally differently." 

A new reality demands new responses, or established companies will be made irrelevant. 

The question is not whether it is necessary for companies to reorient their strategic thinking.  The question is, will they? 
 
 

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